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Local Firms in Latecomer Developing Countries amidst China's Rise -The case of Vietnam's motorcycle industry-

Discussion Papers

No.097

March 2007

ABSTRACT

This paper examines the impact of China’s recent rise on the development of local firms in latecomer developing countries. Based on a detailed analysis of Vietnam’s motorcycle industry, the paper argues that China’s impact may go beyond what a trade analysis suggests. Indeed, China’s rise induced a dynamic transformation in the structure of value chains within Vietnam’s motorcycle industry, bringing about far-reaching consequences on the development and upgrading trajectories of local firms. The implications of the case study for the wider “global value chain” approach is also discussed.

Keywords: global value chain, motorcycle industry, Vietnam, China, upgrading
JEL classification: F23, L22, L62

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