Global Value Chain Governance Research Articles

Critical perspectives on GVC theory: uncovering GVC resilience through non-lead power

Purpose In international business (IB), the discussion of COVID-19-related global value chain (GVC) models driving resilience has taken momentum since May 2020. The purpose of this study is to uncover insights that the pandemic provided as a unique research opportunity, holistically, revealing the significant role of non-lead firms in GVC outcomes and resilience. This allows to extend theory as the authors critically identify impact criteria and assess interdependence and valence, thus progressing the traditional (pre-pandemic) IB view of GVC governance and orchestration. Design/methodology/approach This study opts for an integrative review to help create a much-needed extension of IB theory by means of a critical perspective on GVC theory. The authors examine the extant body of IB literature as the relevant stock of collective IB knowledge prompted by the COVID-19 pandemic, uncovering contributions – with a focus on the role of non-lead firms in orchestration and resilience – that allows to clarify what was not evident pre-pandemic. With this, the authors move the theory from its efficiency focus to a better recognition of the interdependencies of power and profit outcomes stemming from asymmetries of interrelationships. By design, the authors focus on the unique research period of the pandemic and orchestration complexities along the development of configurational arguments beyond simple correlations (Fiss, 2011), revealing key dependencies as key themes. The authors highlight further research avenues following Snyder (2019) that are called upon to strengthen that understanding and that helps extend theory. Findings This research provides a critical perspective on the application of the traditional IB views for GVC governance (designed for efficiency, cost and proximity to markets with pre-dominance for just in time), which has shifted during the pandemic to accommodate for adaptation and adjustment to resilience and just in case considerations. The holistic review reveals not only the key country- and multinational enterprise (MNE)-dependencies with residual impact determining the balance between just-in-time and just-in-case. Also, the authors advance the understanding of the (un)balance of the traditional GVC – focused on just-in-case rather than just-in-time through a lead and non-lead GVC participation and power lens yet rarely observed. The authors find that governance should not be construed as “management” such that it resolves into decisions undertaken in lead firms for execution in subordinate GVC participants. Autonomy allows to subsidiary units by MNE lead firms and/or exercised by (mainly, innovative) non-subsidiary GVC participant firms, is uncovered as a key driver in this. Greater delegation capacity appears to help provide resilience to loss in profit, with a recognition that there may be a dynamic trade-off between power and profit. In addition, the authors are able to identify correlations with innovation, demand elasticity, digital uptake, investment and other, that the authors trust will set the scene for additional research deepening and extending the findings. Research limitations/implications Integrative literature reviews include a problem formulation (i.e. that is limited to published topics around an emerging theme) and are hence very focused in nature and approach. This applies to this paper. Data analysis in this method is not typically using statistical methods in contrast to meta-analyses. Also, the authors limit the sample to a relatively short time period with 33 publications analysed, purposefully focusing on the most prompt and “acute” insights into GVCs during the pandemic. Practical implications The traditional GVC governance model is designed for efficiency, cost and proximity to markets with pre-dominance for just in time. The authors reveal dependencies that are instrumental to better understand lead and non-lead interaction and relative autonomy, with a focus on residual impact determining the balance between just-in-time and just-in-case that, if in the sought equilibrium and agile, can allow alignment with context and this resilience. This paper specifically provides practical insights and visualization that highlights stages/“ripple” effects and their impact and the questions to ask as stakeholders look for GVC resilience. This includes, int.al., firms and their role as strategic agents, prompting participants through the learnings from exogenous shock to realign their strategies, redistributed manufacturing of production across subsidiary and non-subsidiary non-lead firms, greater competition and hence power for suppliers leveraging resilience and innovation, greater understanding of localization and regionalization of production of essential supplies, interaction with governments, and of investment impacts abroad especially to secure GVC participation. Social implications The insights provided through this extension of theory with its literature review reveal the importance of aligning IB research into GVCs to factors that became visible through alternative or unusual settings, as they have the power to reveal the limitations of traditional views. In this case, a mainly efficiency-led, just-in-time focused GVC governance model is reviewed through the literature that emanated during the pandemic, with a critical perspective, which helped uncover and underline the complexities and evolution of GVC governance, providing fundamental support to solutioning the continuing global supply chain challenges that started as a result of the pandemic and are yet again accelerated by the Ukraine and Middle Eastern wars and its impact with, int.al., concerns over possible severe global food, labour/migration and resources crises. IB holds a social responsibility to help identify critical challenges from the disciplinary perspective and help advance resilience for social benefit. Originality/value This paper supports the original IB theory development by extending GVC theory into the lead – non-lead dynamics that may, under certain conditions, provide a “Resilience wall” for GVCs. The value created through insights stemming from a unique period of time for GVC is significant. It allows us thus also to pave the way to an emerging and critical research adaption looking into equilibrium, nuancing demand elasticity, better understanding trade and investment impacts along GVCs and more. By examining views on the sources of pandemic risks in a possibly unique setting, the authors offer added value from extant IB research insights by combining them, revealing the importance for GVCs to investigate not only key dependencies between the exogenous shock, i.e. context, and the impacts assessed through this literature but to further use their inherent value to create a framework for further conceptualization and extension of the traditional IB view on GVC governance. This work illustrates the urgency and importance for IB to take a timely and possibly more critical approach to the investigation of governance models that have, to date, shown some significant limitations.

Improving global value chain governance: Empowering women through third-party interventions within institutionally fragile contexts

Promoting women's empowerment in institutionally fragile contexts has been overlooked in global value chain (GVC) analysis, despite the recognition of its importance by UN SDG 5. Building on GVC governance and feminist institutional theories, we evaluate three aspects of an intervention led by an international non-governmental organization to empower women within socially and economically fragile environments. Using a unique dataset collected between 2018 and 2020 from 2,143 individuals in artisanal mining communities, our findings show that the intervention that promotes economic incentives and facilitates female leadership is positively related to women's inclusion and some empowerment indicators, yet its self-sustainability remains difficult within these challenging contexts.

Adaptive governance and resilience of global value chains: A framework for sustaining the performance of developing-country suppliers during exogenous shocks

We draw from the composition-based view of firms to develop and test a framework of the influence of adaptive governance and resilience on the performance of a sample (n = 292) of Bangladeshi suppliers embedded in apparel global value chains (GVCs) at the height of the COVID-19 pandemic. Results confirm that adaptive governance provides the necessary conditions for suppliers to strengthen their resilience and sustain their performance during exogenous shocks. Results also show that suppliers disruption orientation and resource reconfiguration capabilities play important contingency roles on the extent to which resilience transforms adaptive governance into performance. The implications of our findings and directions for future research on GVC governance and performance in the context of exogenous shocks are fully discussed.

Global Value Chain Governance Dynamics: A Co-Evolutionary Perspective on the Transition from Relational to Modular Governance in Construction

Global value chain (GVC) governance theory explains how GVCs are controlled and organised. A large body of research examines how GVC governance varies across industries, however, GVC governance dynamics within industries receive less attention. This study bridges the gap between GVC and international business theories to focus on GVC governance heterogeneity as a source of competitive advantage. Through mixed-methods including grounded theory, structural equation modelling, and comparative case studies, the research reveals the interplay between network-orchestration and network-dependence as lead firms shape GVC governance transitions. Insights can help managers optimise complex GVC governance structures, particularly in the context of digitalisation.

Responsibility boundaries and the governance of global value chains: The interplay of efficiency, ethical, and institutional pressures in global strategy

AbstractResearch SummaryI explore the relationship of firm global strategy and global value chain (GVC) governance, within a context of expanding responsibility boundaries for unethical practices in the value chain. Specifically, focusing on the tantalum supply chain within the digital electronics GVC, I conduct a case‐based process study that contextualizes the different strategic responses of three manufacturers of tantalum capacitors when faced with similar efficiency, ethical, and institutional pressures. Integrating the GVC and global strategy literatures, I find that structural inertia in GVCs limits the efficacy of strategies that preserve, rather than alter, the governance structure, instead requiring a strategic restructuring carried out by individual firms, whose internalization of responsibility boundaries is encouraged by the institutionalization of these boundaries through public policy.Managerial SummaryUnethical practices within global value chains are increasingly becoming the responsibility of firms with no direct control over such practices, leading to growing pressures for firms to alter their global strategies to meet social and institutional demands. Research has focused on strategies that preserve the structure of the value chain, despite questions about the efficacy of these approaches. By looking at the case of “conflict minerals” within the digital electronics value chain, this study finds that inherent flaws in value chain structures, which managers can identify, require individual firms to implement strategies that change the structure of the value chain, specifically by increasing ownership and control over the linkages where unethical practices occur and encouraging public policies that add value to these strategies.

Is sustainability governance abetting inequality? Reflections from the South African wine value chain

Private and public governance instruments seeking to ensure sustainability in agro-food value chains have become ubiquitous in the past three decades. Virtually all major retailers, agro-food processors and international commodity traders have been involved in one or another sustainability initiative or multistakeholder engagement. An emerging critical literature shows that achieving sustainability goals along value chains often comes at the cost of profitability at the production level. While some hope has been placed on South-driven sustainability standards to better reflect local needs and contexts, their record in doing so has been mixed. In this article, we examine how different kinds of sustainability governance affect inequality within and along the South African wine value chain. We show that sustainability governance is not paying off for many grape growers and wine producers in South Africa, nor is it supporting entry and ownership of historically disadvantaged persons (HDPs) – despite the government’s stated transformation objectives. We conclude that sustainability governance is abetting existing inequalities and question the ability of current initiatives to shape more just, equitable and environmentally-friendly value chains. We also argue that any future discussion of sustainability and its governance in global value chains should also be a discussion of inequality.

Intellectual property strategy and the governance of technological platform-driven global value chains: The case of Qualcomm

This study investigates the impact of intellectual property (IP) strategy on the governance of technological platform-driven global value chains (GVCs) using a case study of the collaboration between Qualcomm and Chinese smartphone manufacturers. Our findings are twofold. First, even when IP protection is inadequate or technological capabilities of IP users are weak, a well-designed IP strategy can allow a technological platform vendor (Qualcomm) to transfer knowledge to users in developing countries while still protecting their own IPs. Second, by reducing the platform and value chain’s modularity, a good IP strategy can encourage platform vendors to offer more innovation and learning opportunities along GVCs. We show there can be a significant mutual reinforcement mechanism included in an IP strategy that supports the co-evolution of platform vendors and a few selected users (OPPO, VIVO, and Xiaomi) with great potential for learning and innovation in GVCs.

Assessing the social sustainability impact on suppliers: the role of global value chains governance strategies.

Stakeholder awareness of social sustainability issues is growing, but few recognize what motivates companies to implement social sustainability in their supply chain management or return on investment in developing countries, where cultural norms might vary widely. We address this question by broadening stakeholder and institutional perspectives to investigate how customers, sustainability culture, management, and external stakeholders influence companies' acceptance of social sustainability in their supply chains. We collected information on 356 apparel and footwear manufacturers from 5 South Asian countries that sell to customers in Western Europe and North America. Our findings highlight the interdependence of organizational and institutional structures and define the boundaries of GVC governance mechanisms within a social sustainability framework. Our research shows that the success of examining social sustainability interventions applied by leading firms or the effects of collaboration-based global value chains depend on the supplier's local institutional framework. Social sustainability organizational practices influence supplier perceptions and responses to key corporate needs in the supplier's country. We demonstrate that GVC governance models are most conducive to suppliers' social sustainability implementation when contextualized with the local institutional needs for social sustainability in the supplier's country.

Retracted: Global Value Chain Governance of the Apparel Design Industry under the Background of Global Sustainable Economic Development.

[This retracts the article DOI: 10.1155/2022/5178301.].

Letter from the Editor: More Geopolitics, Global Value Chains, Mature MNE Subsidiaries and an Interview with Deepak Ohri

Further recognizing the high uncertainty and volatility faced by multinational corporations (MNCs) in the current geopolitical environment, this AIB Insights issue continues our prior issue’s theme with three geopolitics-focused articles on stay or exit decisions in geopolitical crises, geopolitical resilience, and managing disengagement during political disruptions. It also contains articles on building inclusive governance of global value chains and mature subsidiaries in emerging markets, along with an interview with lebua Hotels & Resorts CEO Deepak Ohri. A brief update on the journal’s progress is also provided.

Articles: Making global value chains visible: Transnational corporations versus domestically owned firms

This paper aims to advance research on transnational corporations (TNCs) and international business policy by identifying the role and influence of foreign-owned TNCs in global value chains (GVCs) compared with those of domestically owned firms. We do this by dividing the topology of trade in value added (TiVA) into three networks composed, respectively, of traditional trade, simple GVC trade and complex GVC trade, based on the OECD intercountry input-output data for 2005–2016. Our empirical results show that China’s domestically owned firms have not only been supply centres of manufacturing value added, but have also risen as new regional centres of both supply and demand for services through simple GVC networks. Domestically owned firms of the United States dominate GVCs in services as a global center for both demand and supply, especially in complex GVC networks. TNCs located in Germany and the United Kingdom have a dominant presence in providing value added in manufacturing and services, respectively, through complex GVC networks. By making GVCs visible through TiVA-based network analyses, this paper significantly extends the understanding of who dominates what types of GVC. This will help policymakers better monitor and enhance their GVC governance and competitiveness strategies in more flexible and diversified ways.

Should I stay or should I go? Understanding stakeholder dis/engagement for deforestation‐free palm oil

AbstractAddressing tropical deforestation in the palm oil sector involves a diverse range of stakeholders who engage or disengage with each other. Palm oil global value chain (GVC) firms (plantation companies, traders and processors, and consumer goods manufacturers and retailers), as well as nongovernmental organisations, financial institutions, consultancies and certification bodies, pursue their respective organisations' agendas through engagement practices, including through coalitions, in a palm oil sustainability network (POSN). Building on interviews with different stakeholder groups, this qualitative study characterises and critically analyses ‘stakeholder engagement’ by examining (1) the priority targets for engagement among different POSN stakeholders, (2) how mechanisms and tools are used in POSN stakeholder engagement or disengagement for addressing deforestation, and (3) the implications of stakeholder engagement or disengagement for addressing deforestation. Engagement and disengagement practices are shaped by and reshape GVC governance, with powerful stakeholders emerging as knowledge brokers and norm setters, raising important challenges for how deforestation is addressed.

What Does It Take to Build an Inclusive Governance of Global Value Chains? A Framework for Intervention

As important actors in global value chains (GVCs), multinational enterprises exercise coordination and control over worldwide commodity, production, service, workforce and knowledge mobility. A level playing field for all GVC stakeholders remains absent. We argue for empowering subordinated stakeholders in the design of inclusive GVC governance, as a necessary condition, to harness the power of GVCs that enable many firms to internationalise in the first place. We propose a Framework for Intervention at the level of civil society and five actions, using a revived form of multilateralism, to empower the economic “South” and fundamentally anchor change for human development.

ERRATUM: Governance in agrifood global value chain: the scientific field in the recent 15 years

ERRATUM: Governance in agrifood global value chain: the scientific field in the recent 15 years

Governança na cadeia global de valor agroalimentar: o campo científico nos últimos 15 anos

Abstract: Sustainable agrifood global value chains depend on chain governance by the lead firm and transaction governance. However, the link between them is still unclear. We therefore investigated the scientific field on “governance in agrifood global value chain” over 15 years in the Scopus and Web of Science databases through two analyses: a descriptive bibliometric and a keywords co-occurrence analysis. Our descriptive results show that the research on the theme has increased over the years, with a concentration of the papers published in countries such as the United States, the United Kingdom and the Netherlands, with emphasis on Wageningen University. The network graph showed a multidisciplinary theoreticomplcal field and four axes: chain governance; transaction governance; horizontal relationships; political and structural elements. The chain and the transaction governance are indirectly linked by the concept of upgrading, compromising sustainability’s holistic view. Although the sustainability of the chain depends on both levels of governance, this bibliometric study showed that there is a gap to be filled in this topic. We propose a study in the light of both concepts, considering upgrading, vertical and horizontal relationships, as well as public policies.

The EU's COVID‐19 policy response and the restructuring of global value chains

AbstractThe COVID pandemic highlighted the interdependence which the expansion of global value chains (GVCs) has fostered across the world economy. Perceived fragilities in the supply of key products led to a growing global debate about the wisdom of high levels of reliance on overseas sources, with several commentators suggesting that the pandemic will foster ‘de‐globalisation’. Russia's invasion of Ukraine and the economic disruption which accompanied it, have only served to strengthen concerns about interdependence, especially in Europe. In this paper, we draw on analysis of EU policy responses and GVC governance theory to inform the question of whether it is likely that there will be a major reduction in the geographical reach of GVCs due to the COVID‐19 pandemic. We argue that, although changes in certain GVCs are likely to be fostered (and reinforced) by the response to the pandemic, it does not make widespread ‘de‐globalisation’ inevitable. Some GVCs will likely reduce in geographic scope, becoming more regional or national, especially in industries which are considered ‘strategic’. However, pressures to de‐globalise and their practical impacts will vary significantly across countries and industrial sectors, depending not only on public policy responses, but on variations in the governance of GVCs themselves.

Calling multinational enterprises to account: CSOs, supranational institutions and business practices in the global south

AbstractHow do civil society organizations (CSOs) use state‐backed supranational institutions to call multinational enterprises (MNEs) to account? There are few studies of precisely how CSOs—union and other—use institutional power in global value chain (GVC) governance or the impact of institutional change on actor behaviour. To address this gap, we assess the impact of changes in the OECD Guidelines for Multinational Enterprises on CSO engagement with MNEs, comparing complaints lodged by CSOs before and after the Guidelines were revised in June 2011 to accommodate the rise in global prominence of the human rights and business frame. In our analysis, we focus on how constitutive and institutional power plays out in GVC governance, with special attention to the impact of institutional change on actor behaviour. Our analysis reveals that this state‐backed mechanism provides CSOs with a structure through which to address human rights violations in some MNEs’ supply chains but also that, despite its high degree of reflexivity, ongoing design flaws limit its capacity to address the uneven distribution of power not only between CSOs and MNEs, but among CSOs themselves. In doing so, we draw attention to the need for further research on the dynamic multilevel interactions between the configuration and adjustment of supranational institutions and how these mediate CSO and MNE interactions.

Knowledge Mapping Analysis of Intelligent Ports: Research Facing Global Value Chain Challenges

Integrated technology management in building smart ports or intelligent ports is a crucial concern for global sustainable development, especially when human societies are facing increasing risks from climate change, sea-levels rising, and supply chain disruptions. By mapping the knowledge base of 103 papers on intelligent ports, retrieved in late December 2022 from the Web of Science, this study conducted a roadmapping exercise using knowledge mapping findings, assisted by Bibliometrix, VoSviewer, and customized Python scripts. The three structural (intellectual, social, and conceptual) aspects of knowledge structure reveal the significance of the internet of things (IoT), the fourth industrial revolution (Industry 4.0), digitalization and supply chains, and the need for digital transformation alignment across various stakeholders with Industry 4.0 practices. Furthermore, an even geographical distribution and institutional representation was observed across major continents. The results of the analysis of the conceptual structure demonstrated the existence of several established and emerging clusters of research, namely (1) industry data, IoT, and ICT, (2) industry 4.0, (3) smart airports, (4) automation; and (5) protocol and security. The overall empirical findings revealed the underlying technology and innovation management issues of digital transformation alignment across stakeholders in IoT, Industry 4.0, 5G, Big Data, and AI integrated solutions. In relation to roadmapping, this study proposed a socio-technical transition framework for prototyping ecosystem innovations surrounding smart sustainable ports, focusing on contributing to valuable carbon or greenhouse gas emission data governance, management, and services in global value chains.

A bibliometric analysis of the global value chains research field

This paper presents a bibliometric analysis of the global value chains (GVC) research field. To identify the most influential authors and contributions, potential collaboration networks, most discussed topics, and areas of further research opportunities within or related to the GVCresearch field, we applied the five most common bibliometric methods, namely citation, co-citation, co-author, and co-word analysis, and bibliometric coupling method. Our dataset for quantitative analysis of available articles, authors, and publication outlets in the GVC research field includes 2,506 articles, book chapters, books, and conference papers from 1,047 different sources in the Web of Science database published between the years 1999 and 2021. Our analysis provided a structured and thorough bibliometric overview of the GVC research field, including the years of the COVID -19 pandemic. The results show that the most frequently researched topics include GVC governance, trade, innovation, and production networks. We also identified future GVC-related bibliometric research streams, such as linking GVCs to international sourcing, corporate functions, and firm performance.

Global Value Chain Governance of the Apparel Design Industry under the Background of Global Sustainable Economic Development.

In recent years, there has been a significant rise in the importance of sustainability in business and personal life. Unsustainable techniques are used throughout the whole lifecycle of the clothing and textiles business, from the time it is made to the time it is recycled or thrown away. The garment sector and its customers must be ready for a more sustainable future as the government, corporations, and society turn their focus toward it. An investigation of how the apparel design industry (ADI) might adhere to the global value chain (GVC) in light of sustainable economic development (SED) and their relevance in China. This study analyzes the ADI moves up from one functional level to another within the global apparel value chain and what factors allow them to break into the global market. Researchers demonstrate that the existing sustainable operations in the AD industry are a long way from attaining the aims of economic development going hand in hand with the goals of economic sustainability by studying both the relevant literature and the industrial practices in the sector. This study relies on various case studies, proposes the "apparel global value chain" of governance-based sustainability, explores the implications of these models for areas with very varied degrees of development and diverse AD structures, and considers their implications for regional development and sustainability. As a development of a better knowledge of how fashion design contributes to economic sustainability. The study aims to examine how ADI uses economically sustainable techniques and how designers contribute to the creation of environmentally friendly goods.