Upgrading and Technical Efficiency in Kenya Garment Firms
Does Insertion in Global Value Chains Matter?
In Kenya, the garment industry is earmarked for industrial development due to its role in employment creation especially for low skilled workers, low capital outlay, and its forward and backward linkages.
In value chains discourse, a widely held proposition is that upgrading occurs when local fims participate in global value chains (GVCs) where they are put on a potentially dynamic learning curve.
This book explores the effect of incorporation of Kenyan garment firms into GVCs.
It shows that insertion in GVCs facilitates mainly process but not product or functional upgrading, due to the nature of governance in GVCs.
Further, firms in multiple value chains exhibit higher potential for upgrading than those specializing in GVCs only.
On technical efficiency, the book shows that Kenyan garment manufacturing firms are technically efficient with a mean score of 83% and demystifying the need for efficiency to survive the buffeting effects of the MFA termination.
Exporting, larger firms, and those in multiple value chains on average exhibited higher technical effieciency than the others.
There is need to support local firms to grow and export.
Paul Kamau is a Research Fellow at the Institute for Development Studies (IDS) University of Nairobi, Kenya.
He holds a PhD in Development Studies-UoN, MSc in Economics-UZ and BA Economics-UoN.
His research interests are on international trade and industrial development in Africa with particular emphasis on the textile and clothing.