Technological Capabilities and Local Firms Upgrading within Global Value Chains

From current literature on global value chains (GVCs), the firm is explicitly regarded as the central actor, but it is invariably treated as a black box and most of researchers have neglected what happened inside the firm. In fact, what goes in inside the firm matters a lot. This paper aims to introduce technological capability (TC) approach into the framework of global value chain theory to open the black box of firms and analyze the relationship between technological capabilities and local firms upgrading. Moreover it presents a new classification of technological capabilities from the perspective of knowledge and proposes a new framework for analyzing the mechanism of local firms upgrading within GVCs.