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Trade, Global Value Chains and Development – What Role for National Development Banks?

Trade, Global Value Chains and Development – What Role for National Development Banks?
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Year:    2020

Author:    Dünhaupt, Petra, Herr, Hansjörg

Vierteljahrshefte zur Wirtschaftsforschung, Vol. 89 (2020), Iss. 3 : pp. 9–33

Abstract

Summary: In this article we discuss the need for industrial policy and role of development banks for economic development. The catching-up of countries in the Global South to productivity levels and living standards of the Global North is the exception. There are two main economic explanations for this observation. First, developing countries are pushed to low-tech and labor-intensive productions and tasks in global value chains. This offers the advantage of easier industrialisation, but it does not automatically lead to productivity levels comparable with the Global North. Foreign direct investments only partially help to overcome this problem. Second, low trust in national currencies in the Global South leads to distorted financial markets which do not provide sufficient credit for investment. National development banks play a key role in facilitating the economic catching-up of the Global South as part of needed industrial policies. They can alleviate distortions in the financial system and at the same time support the transformation of the economy towards higher productivity and ecological transformation. We explain development bank policies by using the KfW as an example of an effective industrial policy.

Journal Article Details

Publisher Name:    Global Science Press

Language:    English

DOI:    https://doi.org/10.3790/vjh.89.3.9

Vierteljahrshefte zur Wirtschaftsforschung, Vol. 89 (2020), Iss. 3 : pp. 9–33

Published online:    2020-07

AMS Subject Headings:    Duncker & Humblot, Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    25

Keywords:    E44 F10 F63 Trade theory economic development global value chains industrial policy financial systems dollarisation development banks

Author Details

Dünhaupt, Petra

Herr, Hansjörg

  1. Economic and Social Upgrading in Global Value Chains

    Global Value Chains—A Panacea for Development?

    Dünhaupt, Petra | Herr, Hansjörg

    2022

    https://doi.org/10.1007/978-3-030-87320-2_3 [Citations: 0]

  2. Nullwachstum

    Heine, Michael | Herr, Hansjörg

    PROKLA. Zeitschrift für kritische Sozialwissenschaft, Vol. 53 (2023), Iss. 210 P.171

    https://doi.org/10.32387/prokla.v53i210.2035 [Citations: 0]
  3. Economic and Social Upgrading in Global Value Chains

    Comparing National and Industry-Specific Trajectories of Economic and Social Upgrading as Well as Various Strategic Solutions

    Dünhaupt, Petra | Herr, Hansjörg | Mehl, Fabian | Teipen, Christina

    2022

    https://doi.org/10.1007/978-3-030-87320-2_20 [Citations: 1]

  4. THE INFLUENCE OF SYSTEMICALLY IMPORTANT BANKS ON ENSURING THE FINANCIAL STABILITY OF KAZAKHSTAN

    Dalke, A. Yu. | Svyatov, S. A. | Ruziyeva, E. A.

    Central Asian Economic Review, Vol. (2023), Iss. 1 P.122

    https://doi.org/10.52821/2789-4401-2023-1-122-136 [Citations: 0]

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