Global Production Networks Research Articles

Innovation systems and global value chains: A Co-citation analysis of established linkages and possible future trends

This study draws a historical picture of conceptual linkages of innovation systems (IS) and global value chains (GVC). We used a co-citation technique to map the evolution of these two fields since 1990. We highlighted the connecting nodes over the past three decades. The first decade witnessed a connection between national innovation systems (NIS) and GVC, mediated by regional studies related to industrial clusters and district-based innovation. The tradeoff between tacit sticky local and codified transferable global knowledge and innovation and learning's importance in upgrading in GVC generated two new routes in the second decade. In the last decade, although these routes are retained, their mediating nodes have changed with the literature on technology and sustainable transition from IS and the path dependency role in the evolution of districts in global production networks. Recent trends indicate that evolutionary views on economic geography and catch-up may open new opportunities to link the two, and some lessons highlight the need for more structured interactions in the future.

Regional and Urban Development Under the Signs of Globalization: The Soybean Complex and the City of Agribusiness in Mato Grosso

Since the 1960s, the integration of local economic activities into global structures has fostered a continuous increase in the production of cash crops in Brazil. This has led to a far-reaching transformation of formerly peripheral regions. Given their wide range of uses, soybeans are a prime example of flex crops, which are becoming ever more important in global agribusiness. Soybean cultivation stands out as the main cause of widespread land use changes in many South American regions. The Brazilian state of Mato Grosso is one of the world's most important soy-growing regions, leading to controversial socioeconomic and environmental impacts. Drawing on the case of Sinop, the "City of Agribusiness," and its surrounding region, this article analyzes the complex territorial manifestations of global soybean production networks. We illustrate both the actor networks of agro-industrial soy production, as well as their functional interconnectedness and institutional embeddedness. Finally, we point out growing social-ecological problems caused by the ongoing soy boom. In doing so, the global production network approach offers great explanatory power for understanding global-local interdependencies and interactions.

GLOBAL ECONOMIC DECOUPLING: CASE OF CHINA

The relationship between economic growth and economic decoupling has always been the focus of academic attention. The achievements of China’s economy in the past 30 years have attracted worldwide attention, but with the rapid growth of the total economic volume, it has also paid a huge price in terms of resources and the environment. This paper discusses China’s economic decoupling against the background of globalization based on the review of scientific literature from the perspective of the decoupling of economic growth and resources and environment, combined with the decoupling theory from the perspectives of energy, environment, resource efficiency and economic and industrial remodeling. Temporal and spatial evolution trends of decoupling development in the case of China are considered. The world is changing, and the way and form of China’s integration into the world is also changing with science. Current environment of geopolitical tension between Russia and the United States affect how China can grasp the new trend of globalization, play the pivotal role of the «Belt and Road» in global production networks, and actively respond to the demand of global industry in this turbulent era. This necessitates a re-formulation and evaluation of China’s economic development experience and related policy measures based on decoupling development of the global economy.

Deglobalisierung, Rekonfiguration oder Business as Usual? COVID-19 und die Grenzen der Rückverlagerung globalisierter Produktion

ZusammenfassungDie wirtschaftlichen Erschütterungen infolge der COVID-19-Pandemie scheinen die Notwendigkeit einer geografischen Restrukturierung und Rückverlagerung der Produktion zu bestärken, führten sie doch die Verwundbarkeit der globalisierten Produktionsstrukturen vor Augen. Der Beitrag geht den Auswirkungen von COVID-19 auf die Geografie globaler Produktionsnetzwerke nach. In Abgrenzung zu unterkomplexen Perspektiven auf die Globalisierung wird deren multiskalarer und politisch gestalteter Charakter hervorgehoben. Basierend auf diesen theoretischen Überlegungen und Fallstudien zur Automobil‑, Elektronik- und Bekleidungsindustrie wird gefolgert, dass die COVID-19-Pandemie nicht als Auslöser für einen allgemeinen Rückbau der globalen Fertigung interpretiert werden kann, wohl aber bereits länger anhaltende Verschiebungen hin zu multipolaren Produktions- und Konsumstrukturen verstärkt. Zwar hat das Thema der Resilienz globaler Produktionsnetzwerke eine größere Aufmerksamkeit in der strategischen Planung von Unternehmen und der Industriepolitik von Staaten erhalten. Eine verstärkte Lokalisierung und Regionalisierung von Produktionsnetzwerken ist jedoch nur eine Strategie von mehreren und wurde bis jetzt kaum implementiert. Anhaltende Störungen der Lieferketten, steigende Transportkosten und vor allem geo- und umweltpolitisch motivierte Politiken könnten aber durchaus zu einem stärkeren Re- oder Nearshoring führen. Politische Bestrebungen in diese Richtung werden jedoch limitiert durch gewachsene weltwirtschaftliche Entwicklungspfade und die mit ihnen verbundenen Kräfteverhältnisse. Im Ausblick betont der Beitrag die Notwendigkeit einer umfassenden politisch motivierten Restrukturierung globaler Produktionsnetzwerke im Kontext der dringend gebotenen sozial-ökologischen Transformation.

Cross‐country evidence on the relationship between global value chain position and the tail risk of insurers

AbstractThis study investigates the relationship between insurance sectors' global value chain (GVC) positions and insurance firms' tail risk. Using a sample of 208 insurers from 25 countries between 2000 and 2015, we find that insurers' tail risk (i.e., expected shortfall, downside beta, and marginal expected shortfall) increases when an insurance sector's GVC upstreamness indices increase. This result suggests that when an insurance sector becomes more upstream in the global production network, the comovement between insurers' stock returns and the market returns become stronger and insurers become more exposed to market tail risk. By testing over a subsample of non‐US insurers and a sample period excluding the 2008 Global Financial Crisis, we show that our main results remain unchanged. We also use 2SLS with instrumental variables to address the potential endogeneity problem. Using the nonfinancial sectors' GVC positions as the instrumental variable, we find that the main results are robust to the bias associated with any endogeneity problem. This paper provides the first empirical evidence that highlights the role of GVC linkages in tail risk spillover among insurers around the globe. Our findings have important policy implications for the regulation of insurance firms.

Business interest in human rights regulation: shaping actors’ duties and rights

ABSTRACT Business actors create and operate in global production networks that bring them in contact with regulatory frameworks across multiple levels and domains. Importantly, they also participate in shaping those regulatory frameworks. But what are the specific interests they pursue in their involvement in regulation? Traditionally, scholars tended to assume that the focus of business actors is primarily on avoiding (stringent) public regulation. Recent developments have highlighted a broader range of business interests, however. Accordingly, this paper investigates business positions on the ascription of duties and rights in regulation, specifically in the fields of due diligence, supply chain liability, and extraterritorial jurisdiction. The paper explores these issues in the context of business regulation in the field of Human Rights, looking at the United Nations Guiding Principles on human rights, their German implementation in the ‘Nationaler Aktionsplan Wirtschaft und Menschenrechte’ and the associated processes, in particular.

Environmental Upgrading and Downgrading in Global Value Chains: A Framework for Analysis

A key concern of the global value chain (GVC) and global production network (GPN) literature relates to whether and how actors, especially in the Global South, upgrade by generating and capturing more value. To date, such research has predominantly focused on the economic and social aspects of upgrading. In this article, we leverage selected insights from economic geography to advance our understanding of the environmental dimensions of upgrading and downgrading in GVCs and GPNs. We develop an analytical framework that distinguishes the processes of environmental upgrading, in terms of value creation and appropriation, from the resultant outcomes (biophysical manifestations, impacts on market access, and reputation). Furthermore, the framework is considered from the upgrading perspectives of multiple actors instead of focusing only on lead firms and other powerful actors. We illustrate how to apply this framework through a case study of the Kenya–UK horticulture value chains. We show that despite the uptake of environmental upgrading practices, as required by UK supermarkets and transmitted by Kenyan export firms with the facilitation of government agencies, Kenyan farmers have mostly experienced environmental downgrading, with some negative effects also affecting farmers and other resource users beyond the value chain.

Practice-oriented methodology for increasing production ramp-up efficiency in global production networks of SME

An increasingly uncertain, customer-centric, and dynamic environment nowadays challenges manufacturing companies on a global scale. To handle this challenge, enterprises are distributing their production in global production networks. To deal with the growing demand for individualization, companies need to diversify their product portfolio. This leads to a growing number of production ramp-ups. Large companies are used to production ramp-ups on a global scale and have developed established tools and methods to optimize ramp-ups. Small and medium-sized enterprises (SME), however lack a consistent and efficient methodology to deal with global production ramp-ups. For this reason, this article presents a practice-oriented methodology for efficiently managing the production ramp-up at different production sites. The methodology consists of three elementary phases: the analysis of the target system and relevant influencing factors, the planning of different phases in the production ramp-up, and the integration of a disruption management model to robustly control ongoing production ramp-ups. For testing its practical suitability, the procedure is exemplarily applied to the production ramp-up of a device for engine management in the automotive supplier market at different sites worldwide.

Ecological Impacts of Agribusiness Transformation in a Spanish Mediterranean Enclave: Impacts on the Mar Menor Coastal Lagoon

SummaryIn recent decades, most Spanish Mediterranean agricultural regions have been transformed to meet global food demands and have joined global agricultural production networks: a convergence process that has granted them steady economic growth. In certain cases, however, this transformation has led to a process of ecological degradation. This article focuses on the Torre‐Pacheco case, in the Campo de Cartagena region (southeast Spain, Murcia), to reconstruct the events that have led the region to become a global production enclave in agribusiness and to determine the connections between agribusiness transformation and ecological degradation. To this end, a water transfer project is first addressed as the turning point for the local agricultural sector from which the transformation of agribusiness is described regarding land use, technical adaptations, employment/recruitment changes, etc. A documented result of these agribusiness transformations is subsequently presented: a significant contribution to the ecological degradation of the Mar Menor coastal lagoon, whose natural site will remain endangered if ‘business as usual’ continues.

Product allocation and network configuration in global production networks

Driven by an increasing demand for individualized products and shorter product life-cycles, companies continuously extend their product portfolio. Simultaneously, companies expand into new markets to reach customers and to exploit varying location factors to reduce costs. Global production networks (GPNs) have to be adapted constantly to react to new circumstances and changes in the demand of products. To remain competitive, product allocation and production network configuration are essential. At the same time, companies face an increasing complexity while handling these tasks. This poses a challenge particularly for small and medium sized companies, which have limited planning capacities and management resources. Current literature describes optimization-based approaches for the integrated product allocation and network configuration of production networks. Yet, multi-objective models lack transparency of results and user friendliness. Therefore, this paper presents a multi-objective optimization model that incorporates flexibility and reconfiguration aspects to determine an optimal product allocation and network configuration of a GPN over a given planning horizon. The preemptive goal programming approach is used to identify Pareto-optimal solutions and to increase user friendliness. The subsequent verification, validation and post-optimality analysis combined in a structured process enables a wide range of companies to apply the approach. The model is successfully applied in the GPN of a special machine manufacturer, which produces high precision metrology machines. Due to its transparent approach for complex planning problems, the developed method provides a solid base for well-founded, objective decisions. Hence, the risk of costly errors in the planning phase is reduced.

Financial discipline through inter-sectoral mergers and acquisitions: Exploring the convergence of Global Production Networks and the Global Financial Network

Financial discipline and financialization are transforming Global Production Networks through growing pressures related to shareholder value, short-termism and new financial products and services. However, little focus has been devoted to exploring whether these processes are accelerating rates of sectoral convergence. As financialization creates new challenges and opportunities for non-financial firms, are we seeing greater levels of convergence between the financial and other sectors? If so, which sectors, in which countries and why? We explore these questions by analysing the structure and geographies of inter-sectoral mergers and acquisitions in and out of the financial sector. Drawing from a sample of 25,079 deals between 2001 and 2020, we reveal which sectors are buying and being bought by financial firms, the geographies of this process, trends over time and the key factors driving inter-sectoral activity. Analysed through the Global Production Networks 2.0 framework, and contributing to debates around financial discipline, our findings uncover the growing convergence of finance with other sectors through an increasing share of inward (non-financial firms acquiring financial firms) and outward (financial firms acquiring non-financial firms) merger and acquisition deals. However, far from homogenous, this process of convergence is shown to be temporally, sectorally and spatially uneven. This allows us to make two novel contributions. First, we provide fresh insights into the role of financial discipline in reconfiguring Global Production Networks at country-level. Second, we advance contemporary debates on convergence by revealing how, where and why the boundaries between the financial and other sectors are becoming increasingly blurred.

Technology legitimation and strategic coupling: A cross-national study of floating wind power in Norway and Scotland

Building upon recent work in sustainability transitions studies and economic geography, this paper is concerned with the process of legitimation by which emerging technologies are aligned with broader societal rules and norms. Challenging the assumption of earlier research that legitimation occurs within regional and national borders, the paper views legitimation as set of transregional processes whereby the actors behind emerging technologies seek support from different regional and national organizations on an international basis. Inspired by the Global Production Networks (GPN) approach, the paper argues that technology legitimation can be understood as a trans-regional process of strategic coupling between the strategic needs of the industrial actors advancing new technologies and the efforts of national and regional organizations to promote their territories as leading nodes in emerging production networks. Empirically, the paper adopts a micro-level focus on the legitimation of a particular renewable energy technology: the Hywind floating wind power (FWP) technology, developed by the Norwegian energy firm, Equinor. The paper shows that the FWP technology was gradually legitimated in a pragmatic sense over the three stages of Hywind. The demonstration phase generated a temporary and conditional form of legitimacy at an intra-national scale, while the next phase, Hywind Scotland, generated a stronger and more durable form of legitimacy as the world’s first floating wind farm. This led to the internalisation of legitimacy from outside into the Norwegian energy regime (absorption) in the third stage of Hywind Tampen.

Digital transformation and value chains: Introduction

AbstractNew digital technologies based on the internet of things and artificial intelligence play centre stage in contemporary discussions about the prospects for economic development and the future of work. This article summarizes theoretical and empirical contributions on how these technologies affect global value chains (GVCs). We argue that the leading paradigms that analyse global production – the GVC framework and the related global production networks (GPNs) approach – are in need of some ‘technological uprading’ themselves. The GVC/GPN approaches acknowledge that technology is constitutive for the emergence of geographically fragmented production, but rarely address directly how technological change affects interfirm relations. The authors provide a framework that acknowledges the key role of technology while situating digital tools and systems in their social embeddedness, that is the role of human agency and institutions in shaping their development and impact. A research agenda is outlined focusing on three topics: the varieties of digitalization approaches in different world regions, the role of data as a specific form of intangible resource and the role of platform business models for industrial ecosystems. These topics are addressed in the special issue of Global Networks on ‘Digitalization and Value Chains’ introduced by this contribution.

Global Production Networks and Rural Development: Southeast Asia as a Fruit Supplier to China edited by Bill Pritchard, Cheltenham, Edward Elgar, 2021, vii + 184 pp.

Global Production Networks and Rural Development: Southeast Asia as a Fruit Supplier to China edited by Bill Pritchard, Cheltenham, Edward Elgar, 2021, vii + 184 pp.

Juridical Ontologies of Production and the Ricardian Machine

Abstract This article uses doctrinal analysis of UK tax law to address the question in political economy of where the ‘production boundary’ around value creation lies. It concludes that the ‘classical’ production boundary around material production may be encountered as an emergent feature of forensic investigations of the ontology of surplus in real world commercial contexts. This is particularly important for political economists of the global production network because of the contrasting structural phenomenon whereby value is predominantly added in immaterial production processes.

Global Value Chain Participation and Green Innovation: Evidence from Chinese Listed Firms.

Green innovation is one of the most important approaches to prevent environmental pollution and foster sustainable development. Embedded in the global production networks, manufacturing firms have been found not only to be the main drivers of innovation but also the main polluters in developing countries. However, relatively few studies have systematically considered the effect of global value chain (GVC) participation on green innovation in the context of developing countries. By using a panel dataset of Chinese listed manufacturing firms, this study conducts panel data fixed-effect analyses and uses the instrumental variable two-stage least square model to investigate the effect of GVC participation on firms’ green innovation performance. The results show that increased GVC participation leads to improved green innovation performance of Chinese firms. Meanwhile, further heterogeneity analyses show that the impact of GVC participation on green innovation is more pronounced for firms with greater financial constraints, state-owned firms and firms in labor- or pollution-intensive industries, located in the eastern regions of China. Therefore, this study sheds light on the implication that actively participating in GVC is the key to promoting sustainable growth when facing the need for transformation in developing countries.

Conceptualizing the Regulator‐Buyer State in the European Union for the Exercise of Socially Responsible Public Procurement in Global Production Networks

Conceptualizing the Regulator‐Buyer State in the European Union for the Exercise of Socially Responsible Public Procurement in Global Production Networks

Reading Mozambique’s mega-project developmentalism through the workplace: evidence from Chinese and Brazilian investments

ABSTRACT Propelled by a commodities boom and expanding South–South investment, mega-projects have reshaped the politics of labour in many African settings. Reflecting on such dynamics, this article critically engages with questions of employment, skills development, and contestation re-configuring capital–labour encounters in the ‘Chinese’ and ‘Brazilian’ workplace in Mozambique. We analyse two mega-projects: the Maputo Ring Road, implemented by the China Road and Bridge Corporation, and the Moatize Coal Project, led by the Brazilian mining company, Vale SA. Engaging with the complex realities at project ground level, the article unpacks how workplace regimes and outcomes reflect an intricate, multi-scalar array of spatial encounters, sector-specific characteristics, and national political economies. For both cases, this is associated with common promises of development and prosperity for Mozambique. While such promises take on different ideational guises, we show that the Chinese and Brazilian workplaces expose, nonetheless, overlapping patterns of inequality, contention, and hostility, reinforced by broader vulnerabilities and imbalances in global production networks and the Mozambican political economy. By providing a ground-level reading of the multi-scalar forces at play in the workplace, this article sheds light on the relationship between emerging South–South global encounters, national political realities, and labour geographies in African contexts shaped by mega-projects.

THE RELATIONSHIP BETWEEN PARTICIPATION IN GLOBAL PRODUCTION NETWORKS AND ENVIRONMENTAL POLLUTION ORIGINATING FROM THE LOGISTICS INDUSTRY

Determining environmental pollution and the factors causing this pollution is important for the sustainability of economic activities. While this study deals with the environment within the framework of the logistics sector, it tries to understand logistics by placing it within the framework of production networks theory. So, this study examined the environmental pollution caused by the logistics industry, which mediates participation in global production networks. The sample of the study consists of 38 Islamic countries and time range of the data covers 2000-2018. The research method is panel cointegration. The results show that the participation of Islamic countries in global production networks is not environmentally friendly. A linear relationship has been determined in the long run between participation in global production networks and gases that are harmful to the environment originating from the logistics industry. Accordingly, the results show that CO2 and GHG arising from logistics industry and imports of intermediate goods, which represent participation in global production networks, move together in the long run. This result indicates that participation in global production networks for economic development may harm the sustainability of Islamic countries and hinder their development in the long run.

Consumer Social Responsibility (CnSR) in the Circular Economy of Global Value Chains

What does it mean for global consumers to be 'socially responsible' in the context of sustainable supply chains? Why should Consumer Social Responsibility (CnSR) in the sustainable value chains matter? In this paper, we examine global consumers' responsibilities in the context of the United Nations' Sustainable Agenda 2030, Goal 12. Goal 12 addresses sustainable production and consumption. We explore CnSR from normative and descriptive standpoints. We look explicitly at the consumers' duties and responsibilities to influence global production and supply networks. To accomplish this purpose, we apply philosophical theories to the importance of sustainable value chains, especially to the meaning of 'value' in a sustainable supply chain. Consumers can and should influence corporations with global supply chains to produce goods sustainably while still meeting consumers' needs worldwide. We also look at why consumers should be willing to live up to these responsibilities in the context of sustainable supply chains.