Industrialization and Global Value Chain Participation: An Examination of Constraints Faced by the Private Sector in Nepal
Basnett, Yurendra; Pandey, Posh Raj | October 2014
Abstract
The world’s trade landscape is being shaped by global value chains, which present new opportunities as
well as challenges to developing countries. While large developing countries are leveraging the benefits
of global value chains, smaller economies have been less successful. In this paper we examine the
constraints faced by Nepal, a land-locked least developed country, in participating in global value
chains. We find that weak and ineffective industrial policy has led to de-industrialization, which in turn
has reduced productive capacity. The high cost of transport and energy, inadequate provision of public
goods and low levels of investment reduce the country’s ability to participate in global value chains. As
a land-locked country, Nepal is dependent on regional neighbors for access to global markets. Shallow
regional integration, the prevalence of non-tariff barriers, and inefficient transit trade further
disadvantage Nepal.
Citation
Basnett, Yurendra; Pandey, Posh Raj. 2014. Industrialization and Global Value Chain Participation: An Examination of Constraints Faced by the Private Sector in Nepal. © Asian Development Bank. http://hdl.handle.net/11540/1615.ISSN
2313-6537
2313-6545
Keywords
Commerce and Industry
Intra-Industry Trade
Large Scale Industry
Labor
Industrialization
Industrial Economics
Industrial Development
Industrial Policy
Capital market
Developing countries
Market share
Labor
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Citable URI
http://hdl.handle.net/11540/1615Metadata
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