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Rich Consumers and Poor Producers: Quality and Rent Distribution in Global Value Chains
1University of Leuven and Stanford University
2University of Leuven
Citation Information: Journal of Globalization and Development. Volume 2, Issue 2, ISSN (Online) 1948-1837, DOI: 10.1515/1948-1837.1036, January 2012
- Published Online:
Quality standards are rapidly gaining importance as a result of increasingly globalized trade. Rich country quality requirements are said to have detrimental effects on poor producers in developing countries because they would introduce new trade barriers, prevent small and poor producers from participating in high quality supply chains, and allow multinationals to extract rents. We analyze under which conditions the introduction of quality standards in global value chains may benefit poor producers in developing countries, taking explicitly into account key characteristics of these value chains. We investigate the effects of competition and development and discuss a series of policy implications.