TAILIEUCHUNG - An analysis of vietnamese footwear manufacturers’ participation in the global value chain where they are and where they should proceed?
This paper analyzes the competitiveness of these firms and the ability to capture more added-values from GVCs. The paper reveals that the comparative advantage of low-cost labor is not sustainable. Thus, for sustain growth and prosperity, Vietnamese footwear manufacturers should find other advantages in manufacturing. | VNU Journal of Science: Education Research, Vol. 32, No. 5E (2016) 55-65 An Analysis of Vietnamese Footwear Manufacturers’ Participation in the Global Value Chain Where They Are and Where They Should Proceed? Hoang Thi Phuong Lan1, Pham Thi Thanh Hong2,* 1 Faculty of International Finance - Academy of Finance, Duc Thang, Tu Liem Dist., Hanoi, Vietnam 2 School of Economics and Management, Hanoi University of Science and Technology, 1 Dai Co Viet, Hai Ba Trung Dist., Hanoi, Vietnam Received 22 November 2016 Revised 05 December 2016, Accepted 22 December 2016 Abstract: Recently, Global Value Chain (GVC) is considered as a key factor impacting on strategies of international firms of all sizes. As firms are considering international trade as an opportunity to increase their sales abroad, some companies actually participate in a GVC in order to gain more added value. In the state of world top 3 footwear manufacturers, Vietnamese footwear producers still face difficulties in capturing more value from GVCs. This paper analyzes the competitiveness of these firms and the ability to capture more added-values from GVCs. The paper reveals that the comparative advantage of low-cost labor is not sustainable. Thus, for sustain growth and prosperity, Vietnamese footwear manufacturers should find other advantages in manufacturing. Keywords: Global value chain, upgrading, value added, comparative advantage. 1. Introduction * fragmentation. Instead of producing a product in a single factory, a company establishes a network of suppliers and contributors in different locations. Each supplier or contributor is in charge of a specific manufacturing phase. In other words, GVCs allow countries to specialize on specific segments of the value chain, instead of having to build a complete value chain locally. Resources can therefore be assigned more effectively to tasks in which the country has a comparative advantage. Technology advances and trade facilitation have allowed companies to .
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