@TechReport{iza:izadps:dp14858, author={Verhoogen, Eric}, title={Firm-Level Upgrading in Developing Countries}, year={2021}, month={Nov}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={14858}, url={https://www.iza.org/publications/dp14858}, abstract={In principle, firms in developing countries benefit from the fact that advanced technologies and products have already been developed in industrialized countries and can simply be adopted, a process often referred to as industrial upgrading. But for many firms this advantage remains elusive. What is getting in the way? This paper reviews recent firm-level empirical research on the determinants of upgrading in developing countries. The first part focuses on how to define and measure various dimensions of upgrading - learning, quality upgrading, technology adoption, and product innovation. The second part takes stock of recent micro-empirical evidence on the drivers of upgrading, classifying them as output-side drivers, input-side drivers, or drivers of know-how. The review concludes with some thoughts about promising directions for research in the area.}, keywords={developing countries;upgrading;firms}, }