Governance and Upgrading in GVCs: Why does Embeddedness Matter

Paulo Fortes,Marcelo Okano,Caio Stettiner

doi:10.7819/rbgn.v21i4.4015

Abstract

Purpose – [This study’s primary objective is to propose actors embeddeness as a source for governance and upgrading within the GVC (Global Value Chain) framework.] Design/methodology/approach – [This study uses co-word analysis to study GVC scientific production. The analysis is conducted using the controversies mapping from the Theory of Scientific and Technological Change (TSTC)] Findings – [Two theoretical gaps were pointed due to GVC theory evolvement. First, that governance and upgrading have more than one definition and second that value and network are upgrading strategies. This article proposes the use of Montenegro e Bulgacov (2014) framework to translate governance and upgrading respectively as network governance and strategic outcomes. Embeddedness matters because is a stable theoretical concept (Granovetter, 1985) that can be a link between network governance and strategic results.] Originality/value – [The study main contribution is to propose a relativist embeddeness sourcing governance and upgrading. The second contribution is to present a framework, ANT based, modeled to study governance and its strategic results.]

Highlights

Embeddedness refers to the process by which social relations influence economic activity; it is a network effect (Granovetter, 1992; Uzzi, 1996)
The framework uses the work of Jones, Hersterly, and Borgatti (1997) to provide network governance parameters
Development, industr y, suppliers, production, cluster, countries, buyers, and local are words used to set the context of the 15+GVC-framework and its participants

Summary

Introduction

Embeddedness refers to the process by which social relations influence economic activity; it is a network effect (Granovetter, 1992; Uzzi, 1996). Social actors’ embeddedness interferes as a source of governance (Jones et al, 1997) and shapes positive and negative network outcomes (Uzzi, 1997). The concept of embeddedness, as a network effect, is present in two pillars of the Global Value Chain framework: Transaction Cost Economics (TCE) and Network of Governance theory (Humphrey & Schmitz, 2002a). The framework uses the work of Jones, Hersterly, and Borgatti (1997) to provide network governance parameters. For Jones et al (1997), structural embeddedness provides the foundations for social mechanisms to coordinate and safeguard exchanges in network governance. Economic action and its outcomes are affected by actors’ relations and by the structures of the overall network relations (Granovetter, 1992)

Methods

Results

Discussion

Conclusion