New CAE working paper on Export-Driven Industrialisation and the Mozambican Cashew Industry

How does politics shape the promotion of Mozambique's cashew industry and firm-level upgrading among cashew processors?

This working paper by Dr. Christina Saulich explores why the Mozambican Government supported the cashew processing industry and how Mozambican politics shaped the governance of the local cashew value chain and the upgrading paths of local value chain actors.

She argues that the Mozambican Government supported the cashew processing industry because it became important for the Government’s political survival at the end of the 1990s. By adopting a protectionist law it not only facilitated the re-emergence of the cashew processing industry after its breakdown. The law and active state involvement also affected the governance of the local cashew value chain, thwarted the creation of backward linkages, and shaped the upgrading paths of cashew processors. The paper reveals that the learning channels of firms in GVCs with market-based or modular governance that operate in countries where industrial policies are not enforced effectively may be limited. Local firms therefore mainly depend on costly learning channels at firm level and/or on technical assistance from donors to build the technological capabilities needed to access GVCs and to remain competitive. 

Read the paper here.