Global Value Chain Governance Research Articles

Understanding dynamics between public policy and global value chains (GVCs): governance for sustainability in the Brazilian Amazon beef cattle GVC

PurposeThis article unveils the governance dynamics of a frontier region for global value chains (GVCs). For this purpose, we developed a replicable methodology to analyze the interaction between public policies and the governance of GVCs to better assess sustainability impacts and business responses. We apply this methodology to understand the governance dynamics in the beef cattle GVC in the Brazilian Amazon. In Brazil, cattle ranching increasingly concentrates in the Amazon region, notably in the state of Pará, becoming the major driver of deforestation as public policies and law enforcement are ineffective. Using our methodology, we were able to identify the main weaknesses in governance pertaining to sustainability in the beef GVC.Design/methodology/approachThe methodology employed a case study approach and utilized GVC mapping and analysis using primary (semi-structured interviews and site visits) and secondary data sources. The governance structures along the GVC were characterized. Finally, the sustainability and upgrading within and beyond the GVC were analyzed.FindingsBased on our methodology, emerging beef GVCs, such as those in Santarém, Pará State, primarily supply the domestic market without external pressures to improve sustainability. This fact coupled with a lack of local capacity to implement public policies presents challenges for sustainable governance. Efforts to enhance the performance of the value chain predominantly stem from private sector capacity-building initiatives targeting ranchers.Originality/valueThrough the development of our method, the governance of the Brazilian beef GVC in the Amazon is mapped and analyzed. This study introduces a novel sustainability-focused GVC mapping methodology aimed at establishing a standardized framework to enhance the comparability of research. As a result, this study offers useful theoretical and empirical contributions to the literature on the sustainability of GVCs in frontier regions where public governance capacity is low.

Family firms and the governance of global value chains

The current evolution of global value chains (GVCs) calls for moving beyond the “unipolar” view of lead multinational enterprises (MNEs) as sole rulers to examine how their characteristics and those of partner firms affect GVC governance. In response to this call, we focus on family firms, which are the most ubiquitous organizational form worldwide and represent the majority of firms participating in GVCs. Unlike non-family firms, these organizations face distinct mixed gambles, driven by both economic and non-economic goals. However, internalization theory and the associated global factory model, which explain GVC governance, rely solely on economic assessments, limiting our understanding and predictability of MNE behavior. Therefore, in this study, we show how location decisions, degree of internalization, and relationship management in GVCs differ from the conventional global factory model when family firms are involved as lead MNEs and/or partners. By analyzing how comparative efficiency considerations change when family firms are involved, we offer implications for internalization theory and provide a more comprehensive framework for understanding control and trust dynamics in GVCs. Thus, we pave the way for future research to revise and enrich international business theories, taking into account the distinctiveness and heterogeneity of family firms.

Introduction to the Special Issue: Leveraging Global Value Chains for innovation and industrialization in Africa

The global nature of innovation has led to the emergence of Global Innovation Networks (GINs) and Global Value Chains (GVCs), facilitating knowledge exchange and economic activities across borders. GVCs offer platforms for accessing external knowledge and fostering innovation. They have evolved through three eras of innovation models: the Linear and Closed Model (LCM), the Interactive and Closed Model (ICM), and the Interactive and Open Model (IOM). The IOM emphasizes open innovation principles, intersecting with GINs and GVCs. Lessons from East Asian and Latin American countries highlight strategic practices for GVC integration, focusing on export-oriented industrialization, education, technology policies, infrastructure, and SME support. In Africa, GVC engagement spans agriculture, manufacturing, and services sectors, driving economic growth, job creation, and technological advancements. To advance GVC participation in Africa, a research agenda, policy directions, and action plans are proposed. The research agenda emphasizes GVC governance, value addition, sustainability, innovation, and regional integration. Policy directions focus on infrastructure development, trade facilitation, SME support, human capital development, and promoting sustainable and inclusive growth. African businesses are encouraged to conduct value chain mapping, form strategic partnerships, embrace technology, ensure quality assurance, invest in capacity building, and diversify markets to leverage the potential of GVCs for economic transformation and global competitiveness.

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

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

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.