Global Value Chain Research Research Articles

Firms’ Participation in Global Value Chains Research and Development Activities and Firm Performance: The Joint Moderating Effects of Knowledge Intensity and Technological Turbulence

Firms’ Participation in Global Value Chains Research and Development Activities and Firm Performance: The Joint Moderating Effects of Knowledge Intensity and Technological Turbulence

The impact of manufacturing servitization on consumption-based carbon rebound effect: A global value chain research perspective

This study investigates the causal effect of manufacturing servitization on the consumption-based carbon rebound effect, employing the empirical approach based on the value-added trade and SBM-DEA model. The results show that improving the servitization level will lead to a significant decrease in the consumption-based carbon rebound effect of the global manufacturing industry. Moreover, the main paths through which the manufacturing servitization inhibits the consumption-based carbon rebound effect are the human capital and government management. We also find that the impact of manufacturing servitization is more substantial in advanced manufacturing and developed economies, which is smaller in manufacturing sectors with higher global value chain positions and lower export penetration levels. These findings suggest that improving the level of manufacturing servitization helps alleviate the consumption-based carbon rebound effect and is conducive to achieving the target of global carbon emission reduction.

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.

Coffee producers’ perspectives of blockchain technology in the context of sustainable global value chains

Transparency and equitability are key for improved sustainability outcomes in global value chains. Blockchain technology has been touted as a tool for achieving these ends. However, due to the limited empirical evidence, claims on transparency and sustainability benefits are largely theoretical. We lack an understanding of the benefits and drawbacks for upstream actors within global value chains and how this affects technology adoption. Addressing this gap, we conduct an empirical study to identify the drivers and obstacles for coffee producers in Colombia in adopting blockchain. We base our research on an event-driven and permissioned blockchain model, specifically designed for this research. Applying the Participation Capacity Framework and conducting semi-structured interviews with coffee producers and key informants, we analyze adoption attitudes towards the blockchain application. We further identify opportunities and drawbacks from the producers’ perspective. We set these findings in the context of the Global Value Chain research, considering the existing power relations in the coffee value chain. The top-down nature of blockchain projects raises distributive concerns, as resource investments, implementation burden, and risks are significantly higher upstream, whereas downstream lead firms will benefit most. We identify data squeeze as an additional channel of sustainable supplier squeeze relevant in the case of blockchain initiatives. Data squeeze implies lead firms turning the data obtained through, likely unpaid, labour of blockchain participants into a monetizable assets and marketable value through branding and advertisement. Based on the findings, we identify potential design dimensions and implementation features that can contribute to materializing producer benefits, thus mitigating the risk of a sustainability-driven supplier squeeze.

Industry 4.0 and circular economy in an era of global value chains: What have we learned and what is still to be explored?

This article reviews the industry 4.0 (I4.0) and circular economy (CE) literature from a global value chain (GVC) perspective. More specifically, it (1) summarizes the empirical findings on the applications of I4.0 and CE practices; (2) explores the previous literature and identifies several future research directions to advance the existing literature. In this respect, the interface between I4.0 and CE research is a relatively young field of inquiry that has been little concerned with developments in GVCs. We systematically review 112 peer-reviewed papers in the field of I4.0 and CE to distill key future research opportunities and trends in the GVC field. We develop three specific conclusions from our literature review. First, GVCs can vary widely within the various forms of I4.0 technologies with the various CE practices. Second, GVC research is underdeveloped with regard to I4.0 and CE. Third, our findings are congruent with previously published studies, which recognize the importance of GVC research that has generated a rich body of knowledge, mainly from a governance perspective in operations management, supply chain management, and international business. Likewise, our study offers promising avenues for future research studies at the intersection of I4.0, CE, and GVCs. Our systematic literature review suggests that there are many opportunities to advance the I4.0 and CE debates in the burgeoning field of GVC.

Public Governance and Technological Capabilities in the Kenyan Leather Industry

ABSTRACT This article focuses on small- and medium-sized enterprises (SMEs) in Kenya’s leather sector. It explores how public governance impacts SMEs’ technological capabilities and access to global value chains (GVCs). By public governance, we mean all government regulations and interventions set in place to shape the organization of value chains. Drawing on interview data, the article compares Kenya’s leather handbag and footwear manufacturers. On the one hand, handbag SMEs have succeeded in upgrading and entering GVCs through a combination of foreign knowledge and partnership with local universities. Despite meeting with public governance barriers, this process has enabled the transfer of technological capabilities from foreign-owned firms to a number of emerging SMEs owned by Kenyan nationals. On the other hand, leather footwear production was developed during the 1970s by large firms under state support. As protectionist measures were lifted in the 1990s, firms shut down and producers moved into the informal economy, replicating outdated capabilities in a context of price-driven competition, thereby limiting upgrading and participation in GVCs. The article concludes by comparing these findings with the experience of Kenya’s apparel manufacturers and highlighting the critical need for GVC research to account for the role of public governance in shaping firms’ technological capabilities and access to global markets.

Microfoundations of global value chain research: Big decisions by small firms

In this study, we introduce a unique longitudinal dataset from the Italian Ministry of Economy and Finance Annual Survey (IMEFAS) to assess how micro and small enterprises (MSEs) partake in the global economy by tapping into global value chains (GVCs). The results of the empirical analysis show that the great majority of micro and small enterprises are unable to establish direct links with GVCs. However, two sub-categories of subcontractors and branded producers were able to accomplish upgrading and partake in GVCs after the 2008 economic crisis. For both groups of firms, strategies implemented in domestic value chains contributed to their future participation in GVCs. By identifying small firms’ value chain decisions associated with their ability to access GVCs directly, this study sheds light on the microfoundations of GVCs. It paves the way for the future intersection of small business economics and GVCs, two areas of research that have seldom talked to each other.

Global value chain linkages: An integrative review of the opportunities and challenges for SMEs in developing countries

This study reviews the literature on the challenges and opportunities of the global value chain (GVC) participation of small and medium-sized enterprises (SMEs) in developing countries. A three-step approach to the literature review is used for synthesizing the relevant research works. In the end, we retain that SMEs are drivers of economic growth and despite the many challenges they face, the opportunity for developing country SMEs to benefit from their GVC linkages does exist, notably the high-quality information that they would otherwise not have access to. However there are necessary preconditions, resources and strategies that need to be put together to ensure the successful integration and growth (upgrading) of these SMEs within GVCs. The findings and proposed model contribute to enrich existing GVC research and offer a theoretical guide for possible practical measures to be adopted by SMEs and governments in developing countries.

The impact of e‐commerce on Chinese suppliers' upgrading in global value chains in a digitalized era

AbstractThis study investigates the challenges Chinese manufacturing suppliers face in global value chains (GVCs) and how they respond to the challenges through GVC upgrading facilitated by e‐commerce. A multiple case study approach on nine case companies of three company size categories in the Chinese nonwoven fabric product industry was employed. The findings reveal four categories of internal challenges (i.e., a product development challenge, a human resource challenge, a financial resource challenge, and an intellectual resource challenge) and two categories of external challenges (i.e., a market challenge and a macroeconomic challenge) faced by the Chinese suppliers in the e‐commerce context. Furthermore, strategic responses undertaken by Chinese manufacturers are identified and are further related to various types of economic, environmental, and social upgrading by applying the GVC framework. Unlike most extant research on the phenomenon of sourcing from China that approaches it from the viewpoint of global buyers, this study examines the phenomenon from the perspective of Chinese suppliers. Through the theoretical lens of GVC analysis and its core concept of upgrading, this study contributes to GVC research by shedding light on the impact of e‐commerce on suppliers' GVC upgrading practices.

Social Partners for Social Upgrading? On Corporate Strategies in Argentinian Agro-Industrial Value Chains

While global value chain (GVC) studies originated with a critical analysis of the global political economy, today’s mainstream GVC research has sidelined issues of exploitation and instead focuses on upgrading as a development strategy. This is often accompanied by the implicit assumption that upgrading translates into more and better jobs. Responding to critiques of this assumption, GVC scholars have highlighted the need for an additional social upgrading agenda. However, this paper calls into question this agenda’s often unreserved invocation of public-private-civil society partnerships to achieve social gains for more than just firms. It argues that there is a need to pay greater attention to capitalist social relations and how actual corporate strategies contradict workers’ interests. Taking GVC upgrading strategies in agro-industrial value chains in Argentina as an example, the paper looks at the stance that corporate actors take on social upgrading. It shows that the labour conditions and salaries vary in different chain links and that organized workers in processing industries have achieved improvements in labour struggles. Corporate actors, on the other hand, do not consider themselves responsible for social upgrading beyond their role in economic growth, which then allegedly results in job creation. In fact, they rather portray trade unions as barriers to capital-led agribusiness development. The paper concludes by advocating for a value chain approach that analyses questions of indecent labour as existing in-relation-to-capital, making antagonistic interests visible.

Multichain strategies and economic upgrading in global value chains: Evidence from Kenyan horticulture

• Supplier firms in GVCs are increasingly adopting multichain strategies serving buyers across the global North and South. • We test whether multichain strategies have led to economic upgrading among Kenyan horticulture suppliers in 2006–18 period. • Our mixed-methods approach combines multilevel linear regressions, propensity score matching, system-GMM, and interviews. • Multichain strategies have led to economic upgrading through improved product diversification and higher economic returns. • We highlight the need for GVC research to account for the multichain strategies of suppliers serving multiple value chains. An extensive body of research has examined the prospects for suppliers in the global South to upgrade within global value chains (GVCs) controlled by lead firms from, and oriented towards end-markets in, the global North. However, the expansion of South-South trade has altered the geography of GVCs. Previous studies highlight key differences between North-South value chains (NVCs) and South-South value chains (SVCs). Much less is known about the multichain strategies used by suppliers who participate simultaneously in NVCs and SVCs, and how these affect their prospects for economic upgrading. This article draws on the case of Kenyan horticultural suppliers to explore the implications of multichain strategies for economic upgrading, in terms of value-added tasks (product diversification and product sophistication) and economic returns (unit values). We adopt a mixed-methods approach combining transaction-level customs data for the 2006–2018 period with supplier interviews. We find that suppliers adopting multichain strategies experienced significantly more product diversification and higher economic returns than suppliers operating only in NVCs or SVCs, yet results for product sophistication are insignificant. Our results are robust to the use of multilevel linear regressions (MLRs), propensity score matching (PSM), and two-step system-GMM. The article highlights a critical need for GVC research to account for the multichain strategies of suppliers serving multiple and overlapping value chains, and their implications for economic upgrading.

Managing global value chain triversity and innovation performance using social mechanisms

AbstractScholarly interest in global value chain (GVC) has gained momentum in recent years, yet a comprehensive framework that elucidates how GVC affects an important firm‐level outcome—innovation performance (IP)—is so far elusive. To address this gap, we develop a conceptual framework related to three diversities (activity, governance structure, and partner location) that lead firms in GVC utilize in order to enhance IP. We draw upon the GVC and social capital research to develop the framework. We propose that the three diversities (collectively termed as triversity) have the potential to affect lead firms' IP positively as well as negatively. We further propose that mechanisms related to the three dimensions of social capital (relational, cognitive, and structural) help augment the positive effects and mitigate the negative effects of triversity on IP. This article contributes to the understanding of the relationship between GVC triversity, IP, and social mechanism.

The Impact of COVID-19 and Korea’s New Southern Policy on Its Global Value Chain

Purpose – The Korean government has been promoting the New Southern Policy (NSP) prior to the onset of the COVID-19 pandemic, which damage global value chain (GVC). The purpose of this paper is to emphasize that the NSP should be developed to provide tangible support in corporate GVC adjustment, away from diplomatic activities in order to offset GVC losses due to COVID-19 and expand export capabilities. Design/methodology – Two research methodologies are combined for this paper: A computational general equilibrium (CGE) model is used to estimate the impacts of the COVID-19 pandemic and NSP on Korea’s exports, and the decomposition methodology (Wang, Wei and Zhu, 2013) to evaluate the stability of GVC. The conventional CGE model was modified to obtain an estimate for decomposition. The research methodology adopted in this study was attempted for the first time, and it can be widely used in future GVC research. Findings – Results found the effects of COVID-19 reduced Korea’s total exports by 27% and GVC by more than 30%. In particular, VA in Korea’s exports to the NSP region was found to have a huge impact in heavy industries and textiles, and its exports to Vietnam seemed to suffer the largest loss in GVC among ASEAN countries. If the NSP is implemented properly, it appears that it could offset much of the negative impacts of COVID-19, implying the importance of the effectiveness of the NSP. Originality/value – Many papers have assessed the NSP descriptively, and the GVC has been a topic for many publications. However, the impact of COVID-19 on Korea’s GVC with the NSP countries has not been quantitatively studied. This paper emphasizes that the NSP should be pursued based on the results of quantitative analysis. In addition, the research methodology of this paper can be used for other GVC research with relevant modifications.

Изучение глобальных цепочек стоимости: роль международных организаций

Recent years the phenomenon of global value chains (GVCs) has attracted great attention of international organizations. Many of them are involved in the study of GVCs, primarily the Organization for Economic Cooperation and Development, the UN Commission on Trade and Development, the World Trade Organization, the World Bank, the World Intellectual Property Organization and others, including regional international organizations, such as the Association of Southeast Asian Nations Asia, UN Economic and Social Commission for Asia and the Pacific, African Development Bank, etc. The purpose of this article is to identify how the role and position of international organizations in the global market for GVC research has changed, both in terms of specific content and in terms of interaction with individual scientists and other international and national institutions. GVC research by international organizations makes an important contribution to the understanding the contradictory features of international fragmentation, the participation of countries, regions, industries and individual firms in it. The publications of international organizations have a common research paradigm: they all recognize the importance of GVCs for national economic development. A similar conceptual framework for the study of GVCs is combined with the research specialization of international organizations, which reflects the main focus of the activity of one or another organization. The availability of research specialization is accompanied by continuity and coordination of research; the conclusions of international organizations do not contradict, but rather complement each other. The most important feature of all publications of international organizations is also their practical orientation, the focus on elaborating recommendations for national policies aimed at maximizing the benefits of participation in GVCs and minimizing the risks of such integration. A key feature of the research of international organizations is their generalizing nature, which allows highlighting the key trends in the development of GVCs and perspective areas for future research. Conducting large-scale research and the development of expert estimates in the field of GVCs became possible due to the availability of significant financial, intellectual and statistical resources of international organizations, including databases (TiVA, EORA, AMNE). The availability of such resources allows not only to conduct generalizing and comparative studies on a large array of macro and micro data, but also to carry out “pioneering” studies, which are a real increment of scientific knowledge in the field of GVC. Obtaining important generalizing or “pioneering” conclusions became possible due to the development of multilateral research cooperation of international organizations with individual researchers, universities, other international institutes and “think tanks”.

Uncovering missing links in global value chain research – and implications for corporate social responsibility and international business

PurposeAmidst burgeoning attention for global value chains (GVCs) in international business (IB), this paper aims to identify a clear “missing link” in this literature and discusses implications for research and corporate social responsibility (CSR) policy-making and implementation.Design/methodology/approachThe paper combines an overview of relevant literature from different (sub)disciplinary fields, with insights from practitioner and expert interviews and secondary data.FindingsBecause IB GVC research stems from a focus on lead firms and their producing suppliers, it lacks attention for intermediary actors that may significantly impact the organization of production in general, and firms’ CSR commitments in particular. Import intermediaries are often “hidden” in GVCs. This paper indicates the emergence of GVC parallelism with “frontstage” chains managed by lead firms and increasingly exposed to public scrutiny following calls for transparency and CSR, and “backstage” ones in which buyers and intermediaries operate more opaquely.Practical implicationsThis study points at salient yet little known practices and actors that influence the organization of production and the implementation of CSR policies in various ways, and therefore offers ground for reflection on the design of proper supply chain and CSR policies.Originality/valueThis study exposes a hitherto neglected category of actors in GVCs and broader IB research and discusses implications, relevance and areas for further investigation. An illustrative example explicates the importance of carefully considering this “missing link”. The study emphasizes the need for further study into ways in which both lead firms and intermediaries deal with contradicting demands of implementing CSR policies and offering competitive prices with short lead times.

Economic upgrading in global value chains

This paper has critically documented a vast literature addressing the multi-layered outcomes associated with participating in global value chains (GVCs). In particular, this paper reviews and synthesizes the definitions and quantitative measures of one particular dimension of the GVC analysis that is two-fold: the economic and social upgrading. More specifically, we discuss the economic perspective of upgrading, which is usually associated with “moving into higher value-added stages”, and it is commonly assumed to be followed by positive spillovers regarding technology and productivity. This paper emphasizes the important diversity of definitions and measures within the GVC literature, considering it as a reflection, to a certain extent, of the absence of a systematic theoretical apparatus in the GVC literature. The paper concludes with some considerations on the role of policymakers in promoting social upgrading as an important topic in the GVC research agenda.

Global value chains and international development policy: Bringing firms, networks and policy-engaged scholarship back in

This article argues that the global value chains (GVC) perspective bridges the firm-specific, private-sector and country-level, societal divide that has separated the international business and international economics literatures. A key mechanism that explains the policy impact of the GVC approach are the networks created between the policy entrepreneurs inside the international organizations (IOs) dealing with economic development and the idea entrepreneurs in the research community. The policy engagement of various segments of the GVC research community with development-oriented IOs has increased the scope and visibility of the GVC literature, and improved the quality and relevance of the findings from selected GVC research programs. However, one of the drawbacks of this collaboration has been the multiple meanings attached to the GVC concept and its policy usages within the IOs and national policy communities. The GVC framework remains centrally involved in contemporary research frontiers, including the impact of tariffs on national competitiveness and innovation systems, the digital economy, the future of manufacturing, the co-evolution between local economic clusters and global production networks, and the role of foreign direct investment in establishing complete value chains as a catch-up strategy in developing economies.

Power in global value chains

Power has been a foundational concept in global value chain (GVC) research. Yet, in most GVC scholarship, power is not explicitly defined and is applied as a unitary concept, rather than as having multiple dimensions. Clarifying the concept of power has become particularly urgent in recent years as GVC research has proliferated beyond dyads of transacting firms or firm-state linkages and incorporated other stakeholders and mechanisms such as NGOs, labor unions, standards, norms and conventions. In this article, we propose a typology for the varied meanings and usages of power in GVC governance. We delineate two principal dimensions: transmission mechanisms – direct and diffuse; and arena of actors – dyads and collectives. Combined, these two dimensions yield four ideal types of power in GVC governance: bargaining, demonstrative, institutional and constitutive. We offer brief illustrations of these four types of power and provide an agenda for further research in the field.

Re-Examining the Development of Hirschman’s Linkage Analysis with Detection of Smithian Flavor

ABSTRACTHirschman’s production linkage (PL) framework has enjoyed a revival of interest since the 1980s, but its complexity and richness have been continually underappreciated. This paper clarifies these, especially the role played by joint PLs, and includes some Smithian flavor, in that the activation of PLs is analogous to extending the division of labor in an economy, and can raise productivity and augment wealth accumulation à la Smith. Consumption linkages (CLs) add demand-side considerations and could reinforce the cumulative nature of joint PL by endogenizing market-size expansion. Barriers posed by ‘technological strangeness’ could prevent PL activation and warrant the use of industrial/technology policies. Hirschman also recommended sensible import substitution, interweaved with export promotion. These policies are examples of fiscal linkages that accord a role for the state to support PL and CL activation. Brief comparisons and contrasts are made with the global value chain research framework. Applying Hirschman’s framework to conduct case studies entails interdisciplinary research into details of socioeconomic settings associated with the success or failure of development. The concepts of complementarities and external economies are central, although there are additional dimensions to be studied and interfaces between them to be explored.

Articulating value and missing links in ‘Geographies of Dissociation’

In the spirit of Ibert et al.’s ‘Geographies of Dissociation: Value Creation, “Dark” Places, and “Missing” Links’, we briefly suggest several ways in which ‘Geographies of Dissociation’ itself elides certain crucial issues in the cultural economies of value. The first relates to the need to develop more fully and concretely the relational spatialities of globally networked production. The second follows from this by suggesting that, in order to consolidate its argument of lacunae and elisions, the article overlooks or downplays crucial elements in the work of global value chain research, cultural studies and broader cultural-economic geography, and value theory that have—in their own ways—developed complex analyses of the spatial articulations of governance, ownership, branding, and the production of value. We conclude by returning to Marx’s value theory of labor (not to be confused with Ricardian labor theory of value) to suggest that a more direct question about what drives systems of cultural valuation in the context of networked production might enable the authors to advance the development of a dissociative geography.