Global Value Chain Literature Research Articles

Working like Machines: Technological Upgrading and Labour in the Dutch Agri-food Chain

This article engages with the role of technological upgrading for work in agriculture, a sector commonly disregarded in debates about the future of work. Foregrounding migrant work in Dutch horticulture, it explores how technological innovation is connected to the scope and security of employment. Besides, it proposes a heuristic that connects workers’ experience to sectoral dynamics and the wider agri-food chain. Our analysis reads data from a small-scale qualitative study with different actors in the Dutch agri-food sector through the lens of the global value chain literature. Nuancing pessimistic predictions of widespread technological unemployment, we find product upgrading into high value-added products, and process upgrading, such as through climate control in greenhouses, to offer the potential for more and secure employment. However, higher work intensity and the dismantling of entitlements for rest and reproduction to ‘make people work like machines’ represent the underbelly of these dynamics.

Why Economic Growth Stimulates More Growth in Some Countries Rather than Others

Leontief multipliers are an important component of economic growth. However, input–output analysis is generally treated as a methodological tool for studying other questions in development. The size of multipliers themselves is of interest, as they determine how much nations benefit economically from the growth of base industries. Of the three types of multipliers—industrial supply purchases by firms, consumer goods purchases by workers, and growth derived from all sources—only the first has attracted attention in the global value chain literature; the other two have been neglected. We use OECD data on a large sample of nations in 2005, 2010, and 2015 to show that significant cross-national and inter-industrial differences exist in the size of multipliers. Contrary to expectations, higher-income countries can sometimes have lower multipliers than lower-income countries. The largest multipliers tend to be in the global South. We then provide a model explaining the differences in multipliers in terms of the domesticity of purchases, the wage intensity of production, the geographical size of the country, and the changing roles of GDP per capita and education as societies develop. The significance of these findings for development policy is discussed.

Unproductive Labor and the Smile Curve

A production boundary consistent with Marx’s theory of value may be drawn around labor that is quantitatively predicated by output at the point of exchange, as opposed to being merely causally predicated. The key difference between that production boundary and received Marxist doctrine on unproductive labor is that all other labor is excluded, rather than only such other labor that also falls to be treated as forming part of the “sphere of circulation.” Alternatively put, both sides of the “smile curve” are unproductive of value, rather than just the right-hand side. This conclusion substantiates the analytical nexus as between material production and global inequality to be found in critical global value chain literature. JEL Classification: B51, D43, D46, F66, O34

What Can GVC Literature Learn from Stratification Economics?1

The SE approach can be extended to the Global Value Chain (GVC) case. Given recurring evidence that low value-added activities tend to take place in low-income nations while high value-added activities take place in high-income nations, much of the Global Value Chain literature advocates for firm-level economic upgrading as a national development strategy. The key observations of SE extend to the GVC case. As such, SE provides GVC literature with a more appropriate social and political context and explains the inconsistent outcomes of economic upgrading strategies. Furthermore, the SE lens allows us to conclude that ahistorical analysis may be favored among economists to, consciously or not, generate an illusion of legitimacy to inequality between the so-called ‘Global North’ and ‘Global South’. Ultimately, standard conclusions from SE suggest a wealth distributive policy approach, indicating that a move toward reparations and loan forgiveness may be a more effective strategy for national development.

Bioeconomy as a promise of development? The cases of Argentina and Malaysia

All bioeconomy strategies contain certain claims and promises, though these differ from one world region to another. Proceeding from an analysis of bioeconomy debates and the appropriation of the concept by key actors in Argentina and Malaysia, we argue that both countries regard the bioeconomy as a development strategy primarily geared towards the industrial upgrading of agricultural value chains. Its aim is to increase value added in the soy (Argentina) and palm oil (Malaysia) commodity chains by adding further domestic processing steps and developing new branches of industry. This is to lead to social and environmental upgrading and enable the countries to outgrow their subordinate role as biomass exporters. Referring to the world-systems approach and the global value chain literature, we argue that such upgrading strategies must be understood in the context of the hierarchical global division of labour and the position of individual countries in global markets. We show that the promises of industrial, social and environmental upgrading associated with hegemonic bioeconomy visions in Argentina and Malaysia have failed to materialise. Very few new jobs were created, while soybean and palm oil production continue to rely on environmentally harmful techniques. The socioecological long-term costs of the current production model remain unaddressed and unresolved, primarily because property relations and the underlying profit-oriented production model based on mechanisation, monocropping and a greater use of pesticides are never questioned. Should Argentina and Malaysia continue on their current paths, their chances of attaining the bioeconomy’s purported socioeconomic and environmental goals are very slim.

Supplying lead firms, intangible assets and power in global value chains: Explaining governance in the fertilizer chain

AbstractGlobal suppliers of agricultural inputs such as seeds, fertilizers and agrochemicals exert increasing degrees of power in global value chains (GVCs). Although the GVC literature has explained how global buyers govern GVCs from the buying‐end, the question of how global suppliers achieve governance from the supplying‐end remains underexplored. We address this gap by combining a multidimensional typology of power with literature on intangible assets. We argue that intangible assets are crucial resources for global suppliers to morph otherwise ungovernable supply chains for undifferentiated input commodities into more sophisticated and governable GVCs. We illustrate our argument with the case of the global fertilizer supplier, YARA International. YARA's intangible asset investments were instrumental in governing the value chain integration of Tanzanian smallholder farmers. They allowed YARA to exert more than bargaining power (demonstrative, institutional and constitutive power) and to effectively position itself as supplying lead firm in Tanzania's agro‐industrial GVC.

Regional Dynamics in Global Production Sharing: Evidence from "Factory South America".

The global valuechain (GVC) literature has recognized the regional linkages of global production sharing while overlooking some regions across the globe. This gap may leave unanswered the question of how South American countries' regional trade linkages have changed amid the acceleration of globalization. This study, thus, investigates the regional linkages of global production sharing of South America by relying on value-added trade measures. Additionally, we develop a pioneering value-added hubness measure to illustrate the degree of relative market dependence between countries. The findings suggest that intra-regional forward linkages in South America have increased over time, but there are signs of a re-orientation towards Asia. China's influence extended beyond Asia, and together with the United States, China became an important hub-nation for South America. Brazil appears as a potential regional hub, mainly through its domestic market and not domestic production. Therefore, the study adds to GVC literature with insights about a missing region, reveals signs of changes in the interconnections between regional blocs, and enriches the research on the hub-and-spoke trade systems.

Linking business strategies with upgrading pathways in global value chains: Insights from the Kenyan solar market

SummaryMotivationResearch on global value chains (GVCs) has tended to overlook the agency of the local firm when it comes to processes of upgrading.PurposeWe attend to this knowledge gap by exploring the relationship between the business strategies and upgrading pathways of 14 firms operating in the value chain for solar systems in Kenya.Methods and approachThe article draws on in‐depth fieldwork carried out in Kenya, which included 30 semi‐structured interviews with firm representatives and industry informants.FindingsWe find that local firms pursue different upgrading pathways in order to be competitive and we show the underlying business strategies whereby firms pursue different upgrading pathways.Policy implicationsThe article contributes to overcoming the prevailing black‐boxing in the GVC literature on local firms undergoing processes of upgrading.

The interplay of entrepreneurial ecosystems and global value chains: Insights from the cultivated meat entrepreneurial ecosystem of Singapore

Despite the growing interest in the concept of entrepreneurial ecosystem (EE), the structure of value-adding activities within ecosystems remains overlooked. Therefore, in this paper we explore a possible conceptual interplay between the EE and the global value chain (GVC) literature. We do so by analyzing the case of the cultivated meat (CM) innovation EE of Singapore. Through secondary data and in-depth interviews, it was possible to describe major framework and systemic conditions of the CM Singaporean EE. Such EE conditions were discussed in relation to the evolving cultivated meat chain, in terms of input-output structure, geographic scope, upgrading activity, and chain governance. This, in turn, provided insights that allowed for the conception of a set of seven propositions, which open new avenues for understanding EEs, GVCs, and their interplay in emerging high-tech industries. Moreover, by bringing light to such interplays, our work may contribute to entrepreneurs' and policymakers' activity, so that the transition in the way we produce food contributes to improving social conditions for all.

SMEs and the regionalization of global value chains: an untold story from the Italian industrial districts

PurposeWithin the theoretical framework of global value chains (GVCs), much importance has been given to industrial districts (IDs) and their role as localized manufacturing systems. The regionalization of GVC has opened new questions on the location of manufacturing activities and the potential consequences at the ID level. The reshoring phenomenon challenges internationalization processes, changing the configuration in trade dynamics for IDs. This paper aims to investigate which are the main internationalization patterns followed by district small and medium enterprises (SMEs) under the perspective of the regionalization of GVCs. This will help both practitioners and policymakers to better understand internationalization trajectories aimed at sustaining the economic development of district firms and territories.Design/methodology/approachThe analysis has been conducted using a survey carried out on 210 ID SMEs in the furniture, mechanics and fashion industries located in Veneto and Friuli Venezia Giulia regions, in northeastern Italy. Moreover, data released from the Italian Customs Agency have been merged to detect the trends of interviewed firms’ internationalization between 2005 and 2019.FindingsThe results highlight how the geography of internationalization has changed over time, in particular following the regionalization of the GVCs. There are also differences among the industry specializations of IDs. This could be attributable to the strategy pursued by each firm to control the competition both in the domestic market and abroad, also in relation to GVC lead firms’ location strategies.Originality/valueThis paper applies new data on the analysis of ID SMEs related to international transactions over a long period of time. In doing this, this paper adds new insights to the GVC literature and future policies to be implemented to foster the participation of district firms in the global scenario.

Does green growth foster green policies? Value chain upgrading and feedback mechanisms on renewable energy policies

The expansion of renewable energies not only lowers carbon emissions, it also redistributes resources among actors. This article argues that green industrialization – specifically, manufacturing and the development of renewable energy technologies — creates economic gains that impact political processes and increase renewable energy policy ambition. Building on a combined framework of policy feedback and global value chain literature, we see domestic value creation as a key determinant of coalition strength and learning effects for policymakers. We analyze the relationship of value chain involvement to policy ambition using panel data on countries’ manufacturing and innovation activities in the wind and solar industry from 2010 to 2018. The results show a positive technology policy feedback mechanism, implying that higher local value creation leads to more ambitious renewable energy policies. These first large-N findings support previous case studies on the importance of green growth for raising policy ambition; it implies that transformative policies fostering value creation could create a virtuous cycle for policy ambition. We further propose an interdisciplinary research agenda to shed light on the role of value chain dynamics for policy feedback mechanisms across different political economies.

Global value chains from an evolutionary economic geography perspective: a research agenda

ABSTRACT The research agendas of evolutionary economic geography (EEG) and global value chains (GVCs) have developed more or less independently from each other, with little interaction so far. This is unfortunate because both streams of literature have a lot to offer each other. This paper explores how, looking at four strands in the GVC literature. Promising crossovers between EEG and the GVC literature are identified, but also some missing links that need to be taken up in future research. These new research avenues, promoting the adoption of an evolutionary perspective on GVCs, are expected to enrich both literatures in mutual ways.

Eco‐environmental footprint and value chains of technology multinational enterprises operating in emerging economies

AbstractDrawing from signaling theory and the multinational global value chain (GVC) literature, this study examines a critical question “does the adoption of eco‐friendly technology improve firm value?”. In addressing this question, we test a panel dataset for 633 technology multinational enterprises (TMNEs) operating in 15 emerging economies and covering 10 years from 2009 to 2019. This paper provides new insight into the increasing CO2 emission concerns, especially from the emerging economies and household consumption perspectives. Our study reveals that the adoption of eco‐friendly technology by TMNE's GVC operations will increase firm value and increase total environmental spending. Consequently, CO2 footprints in emerging countries will be reduced. Our findings are robust, controlling for several firm‐level and country‐level variables in our analysis. The practical, managerial, and policy implications of our study are discussed.

Broadening the Perspective of Zero-Deforestation Interventions in Peru by Incorporating Concepts from the Global Value Chain Literature

Global narratives around the links between deforestation and agricultural commodity production have led to the application of voluntary zero-deforestation agreements between companies, governments, and civil society. The continued tropical deforestation warrants a re-examination of this approach in order to customize its application for a particular location. Our paper contributes to this by exploring the spatial associations between deforestation and the production of cacao, coffee, and oil palm in the Amazon region in Peru. The geographical overlaps between deforestation, and the distribution of these commodity crops, indicate four types of spatial associations: (1) a high degree of deforestation and a high degree of commodity production (high-high); (2) a high degree of deforestation and a low degree of commodity production (high-low); (3) a low degree of deforestation and a high degree of commodity production (low-high); and (4) a low degree of deforestation and a low degree of commodity production (low-low). On the basis of these associations, we present four scenarios in which zero-deforestation supply chain interventions may operate in Peru and argue that broadening the perspective of such interventions by adopting a global value chain lens can improve the use of previously deforested lands, prevent unintended or future deforestation and, in turn, ensure that no forest area is left behind.

A multidimensional perspective on child labor in the value chain: The case of the cocoa value chain in West Africa

The International Labor Organization (ILO) states that most agricultural work carried out by children occurs within the family unit, is generally unpaid and often hazardous in its nature and/or in the circumstances in which it is carried out. At the same time, some scholars nuance this view by positing that children who work in agriculture in the spheres of their own household are not necessarily exploited. Making progress in addressing (worst forms of) child labor by value chain actors necessitates unpacking the complex dynamics, context and interlinkages that connect firms and farms at the local community level. This study responds to this call by proposing a new multidimensional perspective on child labor based on comparing and contrasting Global Value Chain (GVC) literature and the Sustainable Livelihood Approach (SLA). Adopting such a perspective allows for an explanation of both vertical dynamics, including global inter-firm linkages and power distribution, as well as horizontal dynamics, such as local norms and values, access to capitals and livelihood trajectories that contribute to the occurrence of child labor. This framework is illustrated by a case study on child labor in the cocoa value chain in Ghana and Côte d’Ivoire, based on information obtained from a variety of sources, including 38 key informant interviews, 12 focus group discussions and structural observations. This study shows that children are not only factors of production, but are socially embedded in family structures and local communities. Children participate in a wider range of rural and agricultural activities as part of rural upbringing and learning a livelihood, in which not only harms but also benefits can occur. These findings advance the discussion by moving away from a dichotomy on child labor as a good or bad practice and putting the development opportunities of children center stage.

Testing predictions on supplier governance from the global value chains literature

Abstract A vast empirical literature analyzes the determinants of the make-or-buy decision. How to organize supplier relationships when the buy option is chosen has received much less attention. The global value chains framework provides testable predictions on the nature of buyer–supplier collaboration. We use a unique transaction-level dataset of outsourced automotive components to study carmakers’ choices between four distinct types of supplier governance: market, captive, relational, or modular. The theory formulates predictions based on three characteristics: the complexity or contractibility of a transaction, the capabilities in the supply base, and how objectively codifiable performance requirements are. Our results illustrate that sourcing relationships vary systematically and that the effects of proxies for the three characteristics are in line with the theory.

Global value chains, private governance and multiple end-markets: insights from Kenyan leather

AbstractThis article analyses how the private governance of global value chains (GVCs) varies across multiple end-markets. This is explored through a two-stage mixed-methods analysis of Kenya’s participation in leather value chains serving Europe, China, India and the COMESA region. We first draw on transaction-level customs data to analyse private governance in terms of the stability of buyer–supplier interactions and presence of intermediaries. We then interrogate these results through supplier interviews. Our article highlights the combined role of product specifications and trust in shaping private governance, and heterogeneity of GVCs across the global North and South, as well as within the South. It further questions commonly held assumptions that lower quality products (generally characterising Southern end-markets) are necessarily governed by market-based coordination mechanisms. We therefore challenge links established in the GVC literature between product standards and private governance.

State policies and upgrading in global value chains: A systematic literature review

This paper examines the role of state policymaking in a context of global value chains (GVCs). While the literature acknowledges that states matter in GVCs, there is little understanding of how they matter from a policy perspective. We address this tension between theory and practice by first delineating the state’s facilitator, regulator, producer and buyer roles. We then explore the extent to which corresponding state policies enable or constrain the following policy objectives: GVC participation; value capture; and social and environmental upgrading. We do so via a systematic review of academic GVC literature, combined with analysis of seminal policy publications by International Organizations. Our findings indicate that state policymakers leverage facilitative strategies to achieve GVC participation and enhanced value capture; with regulatory and public procurement mechanisms adopted to address social and environmental goals. Mixed results also emerged, highlighting tensions between policies geared towards economic upgrading on the one hand, and social and environmental upgrading on the other. Finally, we suggest that effective state policies require a multi-scalar appreciation of GVC dynamics, working with multiple and sometimes competing stakeholders to achieve their developmental objectives.

Digital power: Value chain upgrading in an age of digitization

We investigate whether and how digitization may affect the power relationships that constrain the upgrading of small and medium-sized enterprises (SMEs) in global value chains (GVCs). Combining GVC literature and Resource Dependency Theory, we examine the three features that shift upgrading constraints: asset-specificity, market disintermediation, and innovation sources. The outcomes of a multiple case study encompassing Brazilian firms intentionally sampled from the Digital Games Industry refine our propositions, leading to the concept of digital power as the potential difference in the power imbalance that a supplier may experience in relation to lead firms when performing similar functions in value chains with different digitization degrees. We contribute to International Business literature regarding the relatively unaddressed effects of digital technologies on power relationships in value chains, and deepen the extant understanding of value chain upgrading as a phenomenon. For practitioners, our results inform ways of benefiting from digital industries.

Corporate social responsibility decisions in apparel supply chains: The role of negative emotions in Bangladesh and Pakistan

AbstractThis article integrates the global value chain literature with the micro organization literature on negative emotions to explore the drivers of fear and anger among supplier factory senior managers in apparel supply chains after Rana Plaza—a major industrial disaster—and their influence on decisions on CSR practices. Based on a comparative study around Dhaka and Lahore—two key apparel manufacturing hubs—this study elucidates that supplier factory senior managers experienced similar market tensions but different social tensions after the Rana Plaza incident. Crucially, similar market tensions helped create market fear and anger, but different social tensions led to social fear and anger in Bangladesh but not in Pakistan, therefore influencing the way supplier factory senior managers take decisions regarding CSR practices. By conceptualizing communal alignment and competitive CSR, this research finally advances the global value chain literature and contributes to the current conversations on negative emotions in organizations.