The impacts of value chain upgrading on the export of processed food. (May 2020)

• Record Type: Journal Article
• Authors: Tanrattanaphong, Borworn; Hu, Baiding; Gan, Christopher
• Is Part Of: Food policy. Volume 93(2020)
• Publication Date: 2020-05
• Subjects: Global value chains -- Economic and social upgrading -- Thai processed food exports -- Gravity model; Food supply -- Periodicals; Food security -- Periodicals; Food -- Quality -- Periodicals; Food Supply -- Periodicals; Alimentation -- Périodiques; Electronic journals; 338.1905
• DOI: 10.1016/j.foodpol.2020.101906
• Languages: English
• ISSNs: 0306-9192

Abstract

Highlights: Economic and social upgrading types affect Thai processed food exports. Upgrading types are crucial for Thai processed food exports to developed countries. Upgrading types are vital for the export of sophisticated processed food products. Process upgrading has a concurrent negative impact on Thai processed food exports. Process upgrading exhibits a lagged positive effect on Thai processed food exports. Abstract: Upgrading in global value chains (GVCs) is an important path for developing countries to move along to capture higher benefits. Several qualitative studies of GVCs have identified two main upgrading types: economic (product, process, functional, and inter-sectoral) and social upgrading. The upgrading concept is widespread in productive sectors such as processed food, which has become a key export for developing countries. However, they have confronted multiple product standards required by global buyers. This study uses a case study of Thailand's processed food exports (TPFEs). Although Thailand is a leading exporter of processed food, the country needs to upgrade in many areas related to production to meet global product standards and requirements. If Thailand fails to comply with global product standards, it will lose its export competitiveness. This study uses a gravity model to evaluate the impact of economic and social upgrading (EUP and SUP) on TPFEs. Our results show that upgrading types are significant in TPFEs, particularly for exports to developed countries. Process upgrading has a negative impact on TPFEs because of increased production costs to comply with product standards. However, process upgrading can lead to increased producers' and exporters' knowledge about how to comply with international standards. Consequently, process upgrading exhibits a lagged positive effect on TPFEs.