Endogenisation or enclave formation ? The development of the Ethiopian cut £ower industry
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This paper examines the evolution of the Ethiopian cut flower industry, illustrating how rapidly a potential comparative advantage can be realised. But the question is to what extent a country benefits from this in the long run, if foreign direct investment is the principal driving force. Will the new industry become an enclave, or will it be accompanied by a process of building local capabilities, a process which we denominate endogenisation? A value chain framework is used to analyse the industry and to develop a number of indicators on the development direction. The cut flower industry in Ethiopia is characterised by a dominant role of Dutch foreign investors, Dutch trade auctions which dominate the export trade, and the Dutch development cooperation which plays an important role in the development of the sector. This raises the question to what extent this triple role of the Dutch contributes to endogenisation or to enclave formation.
- ﬁ rms
- ﬂ owers
- dutch fdi