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Capability Matrix: A Framework for Analyzing Capabilities in Value Chains

Discussion Papers

No.219

December 2009

ABSTRACT

This paper develops a Capability Matrix for analyzing capabilities of developing country firms that participate in global and national value chains. This is a generic framework to capture firm-level knowledge accumulation in the context of global and local industrial constellations, by integrating key elements of the global value chain (GVC) and technological capabilities (TC) approaches. The framework can visually portray characteristics of firms’ capabilities, and highlight a relatively overlooked factor in the GVC approach: local firms’ endogenous learning efforts in varieties of relationship with lead firms.

Keywords: Capability Matrix, capabilities, value chains, lead firms, local firms
JEL classification: B41, L22, L60, O31

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