Vertical specialisation, trade .tTheories and the firm: analysing the impact on Botswana’s attempt at industrial diversification

The aim of this paper is to analyse trade theories and flnn theories and through this get elucidations on the effects that vertical specialisation may have on Botswana's attempt to diversify its industrial and manufacturing sector. If a consensus has emerged surrounding the belief that 'productive diversiflcation is a key correlate of economic development' (Dani Rodrik, 2006: 3), knowledge as to how to follow this path, given the present state of trade and production networks-characterised by the hierarchical discipline imposed by multinational corporations-remains largely elusive. Indeed, the on-going trend of flnns spreading their production through contractors and subsidiaries abroad, a phenomenon coined 'vertical specialisation' (Hummels et al., 1998: 80) has led to a shift in international production patterns, which has blurred our understanding of trade.