Local innovation and global value chains in developing countries

Based on a critical review of the existing empirical literature, in this paper we aim at investigating how relevant are different learning channels, internal and external to the GVCs, in terms of development of indigenous innovation capabilities in the firms involved in GVCs. We seek to reconcile GVC and innovation frameworks reviewing empirical studies that have so far focused on innovation processes in GVCs to investigate whether there is evidence of innovation occurring at the local level when firms participate in GVCs and, if so, to understand what have been the main channels through which innovation has been accomplished. We focus on developing economies, where the building up of local technological capabilities is a policy object of utmost importance, and where the participation in GVCs has traditionally played an important role.