global value chains research questions

Global value chains: A review of the multi-disciplinary literature

• Review Article
• Open access
• Published: 25 February 2020
• Volume 51 , pages 577–622, ( 2020 )

Cite this article

You have full access to this open access article

• Liena Kano 1 ,
• Eric W. K. Tsang 2 &
• Henry Wai-chung Yeung 3  

85k Accesses

283 Citations

29 Altmetric

Explore all metrics

This article reviews the rapidly growing domain of global value chain (GVC) research by analyzing several highly cited conceptual frameworks and then appraising GVC studies published in such disciplines as international business, general management, supply chain management, operations management, economic geography, regional and development studies, and international political economy. Building on GVC conceptual frameworks, we conducted the review based on a comparative institutional perspective that encompasses critical governance issues at the micro-, GVC, and macro-levels. Our results indicate that some of these issues have garnered significantly more scholarly attention than others. We suggest several future research topics such as microfoundations of GVC governance, GVC mapping, learning, impact of lead firm ownership and strategy, dynamics of GVC arrangements, value creation and distribution, financialization, digitization, the impact of renewed protectionism, the impact of GVCs on their macro-environment, and chain-level performance management.

Cet article passe en revue le domaine en pleine expansion de la recherche sur la chaîne de valeur mondiale (CVM) en analysant plusieurs cadres conceptuels très cités, puis en évaluant les études sur la CVM publiées dans des disciplines telles que l’ international business , le management général, la gestion de la chaîne logistique, la gestion de production, la géographie économique, les études régionales et de développement, et l’économie politique internationale. En s’appuyant sur les cadres conceptuels de la CVM, nous avons mené la revue en nous fondant sur une perspective institutionnelle comparative qui englobe les questions de gouvernance essentielles aux niveaux micro, de la CVM et macro. Nos résultats indiquent que certaines de ces questions ont suscité beaucoup plus d’attention de la part des chercheurs que d’autres. Nous proposons plusieurs sujets de recherche pour l’avenir, tels que les micro-fondations de la gouvernance des CVM, la cartographie des CVM, l’apprentissage, l’impact de la propriété et de la stratégie des entreprises chefs de file, la dynamique des arrangements des CVM, la création et la distribution de la valeur, la financiarisation, la numérisation, l’impact du protectionnisme renouvelé, l’impact des CVM sur leur macro-environnement et la gestion des performances au niveau de la chaîne.

Este artículo revisa el dominio de rápido crecimiento de la investigación sobre la cadena de valor global (GVC por sus iniciales en inglés) analizando varios marcos conceptuales altamente citados y luego evalúa los estudios sobre GVC publicados en disciplinas como negocios internacionales, gerencia general, gestión de la cadena de suministro, gestión de operaciones, geografía económica, estudios regionales y de desarrollo, y economía política internacional. Sobre la base de los marcos conceptuales de GVC, realizamos la revisión basada en una perspectiva institucional comparativa que abarca cuestiones críticas de gobernanza a nivel micro, GVC y macro. Nuestros resultados indican que algunos de estos asuntos han recogido mucha más atención académica que otros. Sugerimos varios temas de investigación futuros, tales como los microfundamentos de la gobernanza de las GVC, el mapeo de las GVC, el aprendizaje, impacto de la propiedad y estrategia de la empresa líder, la dinámica de los acuerdos de la GVC, la creación y distribución de valor, la financiarización, la digitalización, el impacto del proteccionismo renovado, el impacto de las GVC en su macroambiente y la gestión del desempeño a nivel de cadena.

Este artigo analisa o domínio em rápido crescimento da pesquisa sobre a cadeia global de valor (GVC) analisando vários modelos conceituais altamente citados e avaliando os estudos sobre GVC publicados em disciplinas como negócios internacionais, administração geral, gestão da cadeia de suprimentos, gerenciamento de operações, geografia econômica, estudo regionais e de desenvolvimento e economia política internacional. Com base nos modelos conceituais da GVC, realizamos a revisão com base em uma perspectiva institucional comparativa que abrange questões críticas de governança nos níveis micro, GVC e macro. Nossos resultados indicam que algumas dessas questões atraíram a atenção de acadêmicos mais significativamente do que outras. Sugerimos vários tópicos para futuras pesquisas, como microfundamentos da governança da GVC, mapeamento da GVC, aprendizado, impacto da propriedade e estratégia da empresa líder, dinâmica de acordos da GVC, criação e distribuição de valor, financeirização, digitalização, impacto do protecionismo renovado, impacto das GVCs no seu ambiente macro e gerenciamento de desempenho em nível de cadeia.

本文通过分析几个被高度引用的理论框架,回顾了快速成长的全球价值链(GVC)研究领域,然后评估了在国际商务、通用管理、供应链管理、运营管理、经济地理、区域及发展研究和国际政治经济学中发表的GVC研究。我们建议了一些未来研究主题,例如GVC治理的微观基础、GVC制图、学习、牵头公司所有权及战略的影响,GVC安排的动态性,价值创造与分配、金融化、数字化、新保护主义的影响、GVC对它们的宏观环境的影响,以及链层面上的绩效管理。

Similar content being viewed by others

How digital technologies reshape marketing: evidence from a qualitative investigation

Supply chain disruptions and resilience: a major review and future research agenda

The role of digitalization in business and management: a systematic literature review

Avoid common mistakes on your manuscript.

INTRODUCTION

During the last few decades, the gradual liberalization and deregulation of international trade and investment, coupled with the rapid development and spread of information and communication technologies (ICT), have fundamentally changed how multinational enterprises (MNEs) operate and compete in the globalizing world economy. A clear and yet sophisticated pattern of organizationally fragmented and spatially dispersed international business activity has emerged, whereby offshore production sites located in low-cost developing countries are closely linked with lead firm buyers and MNEs from major consumer markets in North America and Europe (Coe & Yeung, 2015 ; Dicken, 2015 ; Gereffi, 2018 ). New MNEs have also emerged from developing economies, particularly those in East and Southeast Asia, as major strategic partners and manufacturing service providers for traditional MNEs from advanced industrialized economies (Yeung, 2016 ). This pattern signals a new divide in industrial organization on a worldwide scale: a transition from hierarchically organized MNEs, with their traditional focus on managing internalized overseas investments, to MNEs as international lead firms. These firms work with and integrate their geographically dispersed strategic partners, specialized suppliers, and customer bases into complex structures, referred to variously as global commodity chains (GCCs), global value chains (GVCs), global production networks (GPNs), or global factories.

Since Gereffi and Korzeniewicz’s ( 1994 ) collection in the early 1990s, this phenomenon of organizationally fragmented international production has been subject to investigation in a wide range of academic disciplines, including economic sociology, international economics, regional and development studies, economic geography, international political economy, supply chain management, operations management, and international business (IB) (Buckley, 2009a , b ; Coe & Yeung, 2015 , 2019 ; Funk, Arthurs, Treviño, & Joireman, 2010 ; Gereffi, 1994 , 2018 ; Gereffi, Humphrey, & Sturgeon, 2005 ; Henderson, Dicken, Hess, Coe, & Yeung, 2002 ). In economic sociology and development studies, the earliest work was concerned with global commodity trade and the governance structure of such commodity chains in labor-intensive and high-tech industries (Bair, 2009 ; Gereffi, 1999 , 2018 ; Gereffi & Korzeniewicz, 1994 ). This literature has developed a simple typology of buyer-driven and producer-driven GCCs on the basis of the power and control exerted by buyers (retailers and brand name firms) or producers (original equipment manufacturers [OEMs]) in governing their international suppliers and service providers.

In 2000, the Rockefeller Foundation funded a large-scale GVC convention, which marked the beginning of a rapid growth of GVC research (Gereffi, Humphrey, Kaplinsky, & Sturgeon, 2001 ). By the early 2000s – near the beginning point of our review – the GCC literature moved away from its earlier focus on commodities (e.g., clothing, footwear, automobiles) to examining value chains that connected spatially dispersed production activities. In their introduction to a special issue of IDB Bulletin on globalization, value chains, and development, Gereffi et al. ( 2001 ) identified several pressing challenges for value chain researchers and pushed for the use of GVC as a common terminology. Since then, GVC has become the primary focus of research and analytical attention in the social sciences and, lately, international policy communities. The economic sociology view of GVC remains concerned mainly with the social consequences of economic exchange, and with mapping the governance structures/developing typologies of GVCs and their consequences for local upgrading (Gereffi, 2018 ; Gereffi et al., 2005 ; Humphrey & Schmitz, 2002 ). The study of GVCs within the international economics literature focuses on efficiency of contractual organization and economic exchanges in GVCs, and on mapping the geography of international trade flows and value creation (Aichele & Heiland, 2018 ; Antràs & Chor, 2013 ; Grossman & Rossi-Hansberg, 2008 ; Johnson & Noguera, 2012 ; Lee & Yi, 2018 ). IB researchers are interested mainly in how firms can profitably strengthen and exploit their unique firm-specific advantages, and create value by forging business relationships across national borders through MNE activity in GVCs (Buckley, 2009a ; Kano, 2018 ; Laplume, Petersen, & Pearce, 2016 ; Mudambi, 2008 ).

Closely related to the GVC concept is the GPN construct. The GPN concept was developed in the late 1990s by a group of researchers in economic geography, and emerged from a growing dissatisfaction with existing theories of economic development that failed to account for the increasingly complex, networked nature of production activities, which spanned across national borders and led to uneven development in different regions and countries (Coe & Yeung, 2015 , 2019 ; Henderson et al., 2002 ; Hess, 2017 ; Yeung, 2009 , 2018 ). The idea of a GPN goes beyond the simple notions of trading and outsourcing, and highlights firm-specific coordination and cooperation strategies through which such relational networks are constructed, managed, and sustained, as well as the networks’ geographical reach in specific territories, such as sub-national regions and industrial clusters. It also considers the strategic responses of other corporate and non-corporate actors within the GPN, such as the state and business associations. This central focus on economic actors, such as MNEs and their strategic partners, and territorialized institutions, such as state agencies and business associations, also distinguishes GPN thinking from GCC research’s focus on a particular commodity or GVC research’s concern with the aggregation of different value chains into industries.

While the term “GPN” accurately reflects the fact that the firms involved often form intricate intra- and inter-firm networks (rather than linear chains), we propose to use the term “GVCs” in an inclusive fashion throughout this review, to reflect the fact that disaggregation and geographic dispersion presently occurs in various parts of the value chain and encompasses both primary and support activities, with increasingly sophisticated knowledge-intensive processes being offshored and outsourced (Gereffi & Fernandez-Stark, 2010 ). The term “GVC” thus not only refers to manufacturing firms but also characterizes a variety of modern MNEs, including service multinationals and the so called “digital MNEs,” (i.e., firms that use advanced technologies to generate revenues from dispersed foreign locations without investing in production in a conventional sense) (Coviello, Kano, & Liesch, 2017 ). Since the 2010s, the concept and terminology of GVCs have also resonated very well with the development practice and policy communities in many international and regional organizations. A 2010 World Bank report on the post-2008 world economy, for example, claims: “given that production processes in many industries have been fragmented and moved around on a global scale, GVCs have become the world economy’s backbone and central nervous system” (Cattaneo, Gereffi, & Staritz, 2010 : 7). To most observers in these international organizations, GVCs are now recognized as the new long-term structural feature of the global economy (Elms & Low, 2013 ; UNCTAD, 2013 ; World Bank, 2019 , 2020 ).

While we draw on the above complementary research streams and theoretical lenses, we conduct our review from an IB - centric perspective. Following Mudambi ( 2007 , 2008 ) and Buckley ( 2009a , b ), we define a GVC as a governance arrangement that utilizes, within a single structure, multiple governance modes for distinct, geographically dispersed and finely sliced parts of the value chain. In other words, a GVC is the nexus of interconnected functions and operations through which goods and services are produced, distributed, and consumed on a global basis (Coe, Hess, Yeung, Dicken, & Henderson, 2004 ; Coe & Yeung, 2015 ; Henderson et al., 2002 ). IB scholars have recently acknowledged that the rapid rise of GVCs represents one of the most salient features of today’s economy (Turkina & Van Assche, 2018 ), and great strides have been made within mainstream IB literature to understand GVCs (Buckley, Craig, & Mudambi, 2019 ; Gereffi, 2019 ). Yet, surprisingly, there has not been, to the best of our knowledge, a paper that systematically reviews the social scientific and management literatures on GVCs and suggests pointers for future research, specifically for IB scholars. Our review aims to fill this important void.

The rest of the paper is organized as follows. We start by developing an organizing framework to guide our systematic review of multidisciplinary literature. This framework is premised on an inclusive theoretical coverage of the seminal works on GVC governance, upgrading, competitive dynamics, and territorial outcomes, and follows comparative institutional analysis logic. We then discuss our review methodology, and present the results of the review of 87 empirical and conceptual studies, organized according to the framework developed. We conclude by assessing the body of literature reviewed, identifying knowledge gaps, and suggesting avenues for future research.

A COMPARATIVE INSTITUTIONAL FRAMEWORK FOR GUIDING LITERATURE REVIEW

Given the complexity of GVC-related phenomena and the resultant multifarious nature of published studies, a guiding conceptual framework is needed to help us systematically categorize and analyze these studies. We have adopted an IB-centric comparative institutional perspective, embodied in internalization theory/transaction cost economics (TCE) (Buckley & Casson, 1976 ; Hennart, 2009 ; Verbeke, 2013 ), as the foundation of our framework. We consider this approach particularly suitable for systematizing our review for two reasons. First, it focuses on comparative efficiency of various types of governance, and therefore explains under what circumstances GVC governance is preferable to other alternatives. Second, a comparative institutional approach incorporates and links together different levels of analysis, such as micro/individual, transaction/a class of transactions, firm, network, and macro environment; such an integrative approach to governance accurately reflects the multifacetedness and complexity of the GVC phenomenon. However, before we elaborate on this organizing framework for reviewing GVC studies, it is useful and necessary to revisit some of the seminal theoretical works on GVC governance and upgrading (Gereffi, 2018 ; Gereffi et al., 2005 ; Humphrey & Schmitz, 2002 ), and network organization and territorial development outcomes (Coe et al., 2004 ; Coe & Yeung, 2015 ; Henderson et al., 2002 ). These social science studies provided content for designing our IB-centric organizing framework.

Seminal Theoretical Works on GVCs and GPNs in the Social Sciences: From GVC to GPN 2.0

In the early 1990s, Gereffi ( 1994 , also 2018 : Chapter 2) developed the first original framework for explaining the organization of international production networks on the basis of the economic power of giant buyers (e.g., largest retailers, supermarkets, and brand-name merchandisers) and producers (e.g., OEMs in automotive and other high-tech industries) in driving these commodity chains. Attempting to move beyond the then national state-centric modes of analyzing the global economy, Gereffi, Korzeniewicz, and Korzeniewicz ( 1994 : 2) defined commodity chains as “sets of interorganizational networks clustered around one commodity or product, linking households, enterprises, and states to one another within the world economy. These networks are situationally specific, socially constructed, and locally integrated, underscoring the social embeddedness of economic organization.” Their idea was to promote a meso scale of analysis that could probe “above and below the level of the nation-state” and reveal the “macro–micro links between processes that are generally assumed to be discretely contained within global, national, and local units of analysis.”

To operationalize these conceptual ideas and the overall “drivenness” (buyer- or producer -driven) of particular commodity chains, Gereffi ( 1994 ) expanded on three main dimensions of commodity chains and networks: (1) an input – output structure that refers to a set of products and services connected together in a sequence of value-adding economic activities; (2) a territoriality that refers to the spatial configuration of the various actors involved, such as spatial dispersion or concentration of production and distribution networks; and (3) a governance structure that reflects the authority and power relationships within the chain, which determine the allocation and flows of materials, capital, technology, and knowledge therein. Despite this early theoretical development, many of the subsequent empirical studies suffered from a “theoretical deficit.” As argued by Dussel Peters ( 2008 : 14), “most research on global commodity chains approaches the GCC framework as a ‘methodology’ and not a ‘theory’. The result of this is vast quantities of empirical work on particular chains and the experiences of particular firms and regions in them, and relatively little theoretical work attempting to account for these findings in a systematic and integrated way.”

Since Gereffi ( 1994 ), nevertheless, much of GVC theory work in the next decade has been focused on the third dimension of commodity chains – inter - firm governance – through mapping GVC governance structures as independent variables and developing typologies of these structures in order to postulate their consequences for industrial upgrading , as dependent variables, at the firm level and in local/regional development (see recent reviews in Coe & Yeung, 2015 , 2019 ; Gereffi, 2018 : Chapter 1). 1 In their important theoretical formulation following Gereffi’s ( 1999 ) influential empirical work on East Asian apparel upgrading trajectories and Kaplinsky and Morris’s ( 2001 ) highly cited handbook for value chain research, Humphrey and Schmitz ( 2002 ) conceptualized four types of GVC-related upgrading in industrial clusters: process upgrading, whereby the production system is made more efficient, perhaps through superior technology; product upgrading, in which firms move into more sophisticated product lines; functional upgrading, in which they acquire new functions to increase their value added; and chain or inter - sectoral upgrading, whereby firms move into new categories of production altogether. More recently, Pietrobelli and Rabellotti ( 2011 ) further theorized the relationships between these upgrading possibilities and different learning mechanisms embedded in local and regional innovation systems.

The most significant theorization of GVC governance , as an independent variable shaping local and regional upgrading outcomes, was Gereffi et al.’s ( 2005 , also in 2018 : Chapter 4) conceptual typology that came a decade after Gereffi’s ( 1994 ) work. In this most cited conceptual GVC study, Gereffi et al. ( 2005 ) drew upon earlier theoretical work on production fragmentation in international business and trade economics, coordination problems in transaction cost economics (TCE), and networks in economic geography and economic sociology. To them, the then recent work by geographers, such as Dicken, Kelly, Olds, and Yeung ( 2001 ) and Henderson et al. ( 2002 ), “has emphasized the complexity of inter-firm relationships in the global economy. The key insight is that coordination and control of global-scale production systems, despite their complexity, can be achieved without direct ownership” (Gereffi et al., 2005 : 81). To theorize this complexity of inter-firm relationships, Gereffi et al. ( 2005 ) constructed a typology of value chain governance by intersecting the three supply-chain variables of complexity of transactions, codifiability of transactions, and the capabilities within the supply base. By ascribing only two values – high or low – to these three variables, they identified a fivefold typology of governance within GVCs. In addition to the pure forms of market and hierarchy , the authors distinguished modular , relational , and captive forms of governance that rely on intermediate levels of coordination and control. While highly influential, this conceptual typology is still arguably somewhat limiting, and underplays the extent to which governance is also shaped by place-specific institutional conditions and intra- and extra-firm dynamics (Coe & Yeung, 2015 ). Further theoretical work mobilized convention theory to focus on the different modes and levels of governance operating within GVCs, distinguishing between overall drivenness, different forms of coordination (the five types of governance noted above), and the wider normalization and standards-setting processes that operate along the value chain (e.g., Gibbon & Ponte, 2008 ; Ponte & Gibbon, 2005 ).

As noted in the Introduction, a parallel theoretical development in the social sciences was the GPN framework developed by Dicken et al. ( 2001 ) and Henderson et al. ( 2002 ). Table  1 offers a comparison between GVC and GPN theoretical approaches that enable the “modular” theory-building efforts proposed by Ponte and Sturgeon ( 2014 ). As part of these efforts, Henderson et al.’s ( 2002 ) GPN 1.0 schema emphasized the complex intra-, inter-, and extra-firm networks involved in any economic activity, and elaborated on how these are structured both organizationally and geographically. This theoretical framework for analyzing the global economy was intended to delimit the globally organized nexus of interconnected functions and operations of firms and extra-firm institutions through which goods and services are produced, distributed, and consumed. The central concern of any GPN analysis therefore should not simply be about considering the networks in their own terms, but should reveal the dynamic developmental impacts on locations and territories interconnected through these networks. GPN 1.0 thus extends beyond the above-mentioned GVC governance approach by (1) bringing extra-firm actors, such as state agencies, non-governmental organizations, and consumer groups, into GPNs; (2) considering firm–territory interactions at multiple spatial scales, from the local and the sub-national to the macro-regional and the global; (3) examining intersecting vertical (intra-firm) and horizontal (inter-firm) connections in production systems; and (4) taking a more complex and contingent view of how GVC governance is shaped by the wider regulatory and institutional contexts.

The most recent and comprehensive theorization of GVCs is found in Coe and Yeung’s ( 2015 ) monograph. This work seeks to develop a dynamic theory of GPNs by specifying the causal mechanisms that explicitly link earlier conceptual categories of value, power, and embeddedness to the dynamic configurations of GPNs and their uneven development outcomes. In this GPN 2.0 framework, the aim is to conceptually connect the structural capitalist dynamics that underpin GPN formation/operation to the on-the-ground development outcomes for local and regional economies. The underlying capitalist dynamics encompass key dimensions such as drivers of lowering cost-capability ratios, market development, financialization and its disciplining effects on firms, and risk management; together, these dimensions distil the inherent imperatives of contemporary global capitalism. These dynamics are key variables driving the strategies adopted by economic actors in (re)configuring their GPNs, and consequent value capture trajectories and developmental outcomes in different industries, regions, and countries. Interestingly, these competitive dynamics are not well theorized in the existing GVC literature, which is much more concerned with governance aspects of the operation of such chains and networks after they are formed. Coe and Yeung ( 2015 ) considered how these causal drivers shaped the strategies of different kinds of firms in GPNs. These firms organize their activities through different configurations of intra-, inter-, and extra-firm network relationships. Conceptually, these network configurations are shaped by different interactions of the underlying dynamics. The authors then examined the consequences of these causal mechanisms – comprising varying dynamics and strategies – for firms in GPNs.

Fuller and Phelps ( 2018 ) further explained how parent–subsidiary relationships in MNEs can significantly influence the way that these competitive dynamics shape their network embeddedness in and strategic coupling with specific regional economies (Yeung, 2009 , 2016 ). Departing from the industrial upgrading literature that often takes on a unidirectional pathway to upgrading (from process to value chain upgrading in Humphrey and Schmitz ( 2002 )), Coe and Yeung ( 2015 ) further developed the concept of “value capture trajectories” to frame in dynamic terms whether firms are able or not to capture the gains from strategic coupling in GPNs. Ultimately, this GPN 2.0 work seeks to understand the impacts on territorial development by exploring how firm-specific value capture trajectories can coalesce in particular places and locations into dominant modes and types of strategic coupling, with different potential for value capture in the regional and the national economies.

Similar to other theories in the social sciences, the GVC/GPN frameworks discussed above are primarily explanatory rather than predictive in nature. The validity of predictions depends upon ceteris paribus conditions, which do not apply in open systems where social phenomena occur. Hence, “it is unrealistic to assume that all relevant data will be consistent with a theory even if the theory is correct” (Lieberson, 1992 : 7). As such, the predictive power of social science theories is curtailed (see Bhaskar, 1998 for a detailed discussion).

A Comparative Institutional Framework on GVCs

The above brief review of foundational works in GVCs and GPNs has clearly pointed to the general tendency in the social science literature to examine GVC governance, upgrading dynamics, and territorial outcomes. Still, there is a limited conceptualization of how different actors – from MNE lead firms to their strategic partners, key suppliers and customers, and other related firms – (1) structurally organize their business transactions to exercise control and coordination, determine locational choices, and configure networks; and (2) strategically manage their firm-specific activities to enhance learning and knowledge accumulation, create advantageous impacts, and orchestrate GVCs for better performance outcomes. These firm-specific considerations fall within the core premise and competence of IB research that can add much value to the existing GVC theoretical frameworks. In particular, we suggest that comparative institutional analysis can help link social science and IB approaches in GVC research. Comparative institutional analysis, as applied in firm-level studies, builds on the premise that economic actors will make decisions about the most efficient governance mechanisms to conduct economic exchange or to organize a given set of transactions. For example, they may choose between organizing production activities within the firm or through the market, and select coordination and control methods, such as the market system versus managerial hierarchy versus socialization (Gereffi et al., 2005 ; Hennart, 1993 ). Comparative institutional analysis has a number of branches, including internalization theory (Buckley & Casson, 1976 ), which is most relevant for exploring GVCs. Internalization theory applies the economic essence of comparative institutional analysis in an international setting, arguing that economic actors will select and retain the most efficient governance mechanisms to conduct cross-border transactions (Verbeke & Kenworthy, 2008 ).

From a comparative institutional perspective, a GVC represents a distinct form of governance, which is likely to emerge and thrive only if it enables superior efficiency when compared to other real-world alternatives (e.g., vertical integration or market contracting). Efficiency is served by aligning governance systems (both structural and strategic ) with the attributes of transactions in a cost-economizing way (Hennart, 1993 ). Ultimately, competitive advantage arises from the firm’s ability to choose the most efficient, economizing mix of internal and external contracts as a function of various micro - and macro - level characteristics of transactions – decisions made by economic actors at the micro level and demand/technological/institutional characteristics at the macro level (Antràs & Chor, 2013 ; Gereffi et al., 2005 ; Hennart, 1994 ). The most efficient governance forms are those that are comparatively superior in terms of enabling the firm to: (1) economize on bounded rationality; (2) economize on bounded reliability 2 ; and (3) create an organizational context conducive to innovation in its entirety (Verbeke & Kenworthy, 2008 ). Further, the firm must adjust its economizing mix of contracts over time as a function of changes in the micro- and macro-environments. Finally, the firm continually impacts both its micro-level and macro-level environments through changes in governance. Such changes evolve in a continuous, mutually reinforcing cycle (Williamson, 1996 ).

We combine comparative institutional logic with foundational GVC work discussed in the previous section to build an organizing framework, which facilitates our subsequent review of a large number of empirical and conceptual studies of GVCs. This framework, presented in Figure  1 , arranges extant studies along the three main layers impacting the functioning of GVCs, and conceptually connects these layers with each other and, ultimately, with GVC governance and performance outcomes. While incorporating some of the key conceptual variables in Gereffi et al.’s ( 2005 ) governance typology and Coe and Yeung’s ( 2015 ) GPN 2.0 theory, this integrative framework seeks to highlight IB - specific issues in relation to not only GVC-level variables, but also, crucially, micro- and macro-level influences that shape the organization and performance outcomes of MNEs and other firms in GVCs.

A comparative institutional framework of GVC governance.

First, at the micro - level , we identify studies that explore specific assumptions about the behavior of decision-makers in both the lead firm and peripheral units, and ways in which these assumptions explain processes within the GVC; that is, how knowledge is exchanged and processed, how the hazards of reliability are managed, and how new capabilities are developed and obsolete ones are discarded. Second, at the GVC level , we discuss studies that focus on governance and performance of the GVC. Here, we identify six broad dimensions that constitute critical elements of GVC governance: control, location, network structure, learning, impact of the lead firm, and GVC orchestration. GVC performance outcomes, to the extent that they are explored in the reviewed studies, are also addressed at this level. In accordance with comparative institutional analysis principles, and consistent with conceptual foundations of much GVC research, we view overall GVC performance in terms of sustainability of GVC as a governance form or its success in delivering value to participants, including capability development and upgrading. Third, at the macro - level , we focus on studies exploring the relationships between the GVC and its environment, including cultural, institutional, geographic, and economic make-ups of both home and host locations. Studies that constitute this group address both macro-level impacts on GVC configurations and the GVCs’ impact on macro-environments within which they operate. In the following sections, we use this integrative framework to review 87 conceptual and empirical studies of GVCs.

METHODOLOGY

We focused on published journal articles and excluded books, because more often than not, authors of books also published journal articles that contained much of the reported results (e.g., Gereffi, 2018 ). We also excluded book chapters, which usually went through a less rigorous review process than journal articles and were less accessible digitally. We conducted a multi-disciplinary literature search that covered IB, general management, supply chain management, operations management, and a selected group of social science journals that published GVC research, namely economic geography, economic sociology, regional and development studies, and international political economy 3 . This extensive scope should cover most of the key GVC studies published in academic journals. We included leading journals of each discipline that attracted researchers to submit their best-quality GVC studies.

For each journal, we searched articles published in the past 20 years – the period characterized by rapid growth and increased sophistication of GVC research, as discussed in the Introduction. We used four search terms: global value chain, global commodity chain, global production network, and global factory. We shortlisted conceptual articles with GVCs as their major foci, and empirical articles, whether qualitative or quantitative, that had at least one of the search terms as a major variable. That is, we excluded articles that casually cited or had any of the four terms serving as a control variable. Moreover, shortlisted studies targeted at the firm or network level, instead of other units of analysis, such as international organizations (e.g., Haworth’s ( 2013 ) case study of the Asia Pacific Economic Cooperation), industries, or locations.

Since the social science journals have a very large number of publications on GVCs that amounted to several hundreds, we applied additional criteria to narrow down this considerable volume of literature to a proportionate number of articles. We started with identifying nine theoretical pieces that constituted the foundation of the theory section above. For empirical papers, we implemented three additional screening criteria. First, we included more recent papers published after 2005. Second, we focused on papers that were closest to the research interests of IB scholars. Third, we ensured that our selection covered a reasonable mix of authors from different disciplines, institutions, and geographical locations, and that selected studies included both GVC and GPN approaches with a variety of research methods, industry coverage, and empirical locations in both developed and developing countries.

Based on the above criteria, a total of 21 journals publishing 22 theory papers (including the nine foundational pieces mentioned above) and 65 empirical articles were included in our review, as listed in Table  2 . Notably we also searched the Academy of Management Journal , Administrative Science Quarterly , Journal of Management and Management Science (all commonly regarded as leading management journals), but failed to find any relevant articles. The same applies to the leading journals in sociology (e.g., American Journal of Sociology and American Sociological Review ) and political sciences (e.g., American Political Science Review and International Organization ).

The 33 shortlisted articles in mainstream IB journals (i.e., GSJ, IBR, JIBS, JWB, and MIR) provide the most comprehensive picture of our field’s current state of knowledge on GVCs. Articles published in these journals, however, constitute about 58% of the group of non-social science journals, indicating that GVC is an important research topic attracting the attention of researchers working in disciplines beyond the IB turf. In the group of social science journals during the review period, GVC and GPN research has been particularly influential in the fields of economic geography, economic sociology, and regional and development studies. Here, we included only a small selection of 30 articles published in the leading journals, based on the criteria discussed above.

We studied each article and extracted two to three key GVC-related findings with respect to our organizing framework presented in Figure  1 . Table  3 lists these 87 articles’ key information (year of publication, authors, journal abbreviation, research method, and sample characteristics) and their most significant findings. The sample spans the time period from 1999 to the end of July 2019; however, for the non-social science journals, the more recent articles published after 2010 represent the bulk of the sample, reflecting a broad upward trend in GVC publications in the last decade. There is almost an equal split of research methods between qualitative case studies and quantitative studies based on archival or survey data. There are both single-country and multi-country studies, together covering a wide geographic scope. Most of the studies analyze firms, networks or clusters in manufacturing industries. It is not surprising that the automotive industry is the most popular context for these studies, given the industry’s requirement for many suppliers, large and small, manufacturing various components of an automotive. The studies as a whole investigate a variety of IB-related issues, as described in the next section.

REVIEW OF GVC LITERATURE

Micro-level: microfoundational assumptions and their impact on gvc.

Microfoundations refer to generic human behavioral conditions that impact firm-level (and, in the case of GVCs, network-level) outcomes (Kano & Verbeke, 2019 ). Scholars have argued that individual-level characteristics, such as bounded rationality, bounded reliability, cognitive biases, and entrepreneurial orientation, impact GVC governance (Denicolai, Strange, & Zucchella, 2015 ; Kano, 2018 ; Levy, 1995 ; Verbeke & Kano, 2016 ), in terms of how transactions are organized and orchestrated. Therefore, systematic attention to microfoundations is necessary in order to meaningfully advance the GVC research agenda. However, few empirical studies directly observe or measure individual-level variables. Further, while certain behavioral assumptions are frequently implied – e.g., the nature of individual-level knowledge and capabilities is inherent in the idea of learning and upgrading; the need for knowledge sharing across units implies bounded rationality of individual actors and associated information asymmetries; the notions of power balance and the need for intellectual property (IP) protection assume a certain level of bounded reliability of actors involved – these assumptions are, for the most part, neither articulated explicitly nor examined empirically.

Only seven studies in our sample directly address the impact of microfoundations (either stated or implied) on GVC geographic configurations, knowledge acquisition and dissemination within the GVC network, and efficient functioning and orchestration of the network. In an early qualitative study of supply chain management, Akkermans, Bogerd and Vos ( 1999 ) discuss how bounded rationality, as expressed in supply chain partners’ diverging beliefs and goals, contributes to functional silos and erects barriers to effective value chain management. Lipparini, Lorenzoni and Ferriani ( 2014 ) argue that GVC networks that benefit the most from knowledge transfer among partners are those where partners share common identity and language. These features serve as safeguards against the potential threat of opportunism and allow participating firms to learn from partners with reduced risk of proprietary knowledge spillover outside of the immediate network. Eriksson, Nummella and Saarenketo ( 2014 ) suggest that individual-level cognitive and managerial capabilities of lead firm managers, such as cultural awareness, entrepreneurial orientation, global mindset, interface competences and analytical capabilities, constitute a critical building block for firm-level ability to successfully orchestrate cross-border transactions in a GVC. Seppälä, Kenney and Ali-Yrkkö (2018) focus on boundedly rational accounting decisions in lead MNEs, and argue that lead firms’ accounting systems may misrepresent where the most value is created in a GVC. This mismatch implies that GVC activities to which value is allocated may be selected somewhat arbitrarily, and this further impacts location decisions. Kano ( 2018 ) argues that bounded rationality and reliability of decision-makers in participating firms impact the efficiency of the GVC; as such, the role of lead firm managers is to control bounded rationality and reliability through a mix of relational mechanisms, so as to improve the likelihood that the GVC will be sustainable over time. Treiblmaier ( 2018 ) theoretically predicts structural and managerial changes introduced into GVCs by blockchain technologies, by analyzing four behavioral assumptions of major economic theories: bounded rationality, opportunism, goal conflict, and trust. Finally, Sinkovics, Choksy, Sinkovics and Mudambi ( 2019 : 151) explore the relationship between three variables – information complexity, information codifiability, and supplier capabilities – and knowledge connectivity in a GVC, and conclude that individual characteristics of lead firm managers – specifically, their risk perceptions and associated “comfort zones” – moderate this relationship.

GVC Level: Components of GVC Governance

The term “governance” refers to the organizational framework within which economic exchange takes place, including the processes associated with the exchange (Zaheer & Venkatraman, 1995 ). In the context of a GVC, governance includes the overarching principles, structures and decision making processes that guide the “checks and balances” in network functioning, so as to make sure that the interests of the entire network (and broader societal/environmental interests where relevant) are served above and beyond localized interests of participating firms and individual decision-makers within these firms. These principles, structures and processes encompass considerations related to boundaries of the network and its geographic make-up, control and orchestration mechanisms for economic activities performed within the GVC, value distribution, relationship management, and direction of knowledge flows. Outcomes of successful governance include meeting of individual participants’ performance goals, as well as, ultimately, long-term sustainability of the GVC as a whole.

Here, a distinction can be made between structural and strategic governance of the GVC, as shown in Figure  1 . The former refers to the actual structure governing economic activities, e.g., make versus buy decisions, organizational structure of the network (number of players, power balance, boundaries, etc.), geographic and functional allocation of activities, level of centralization of decision-making, and so on. In contrast, strategic governance is concerned with dynamics of actors’ behavior in respect to strategic decision making (Schmidt & Brauer, 2006 ; Zaheer & Venkatraman, 1995 ). In the context of GVCs, strategic governance is about orchestrating the usage of resources, through codified and uncodified routines and managerial practices, to ensure smooth functioning of the entire network (Kano, 2018 ). Our review identified six broad, interrelated conceptual dimensions (Figure  1 ) that constitute critical elements of structural and strategic governance of a GVC. These dimensions, as well as outcomes of governance practices, are discussed below.

Control decisions establish the governance structure of the GVC, that is, whether each value chain activity should be internalized, outsourced, or controlled through hybrid forms such as joint ventures (JVs) (Buckley et al., 2019 ). It has been argued that in a GVC, control of critical knowledge and intangible assets (e.g., brand names and technological platforms) takes precedence over ownership of physical assets (Buckley, 2011 , 2014 ; Mudambi, 2008 ), and ownership advantages can be exploited without internalizing operations (Strange & Newton, 2006 ). This core premise underlying the GVC is supported in Hillemann and Gestrin’s ( 2016 ) analysis of OECD data on foreign direct investment (FDI) and cross-border mergers and acquisitions (M&As), which shows that cross-border financial flows related to intangible assets continue to increase relative to those related to tangible assets. An analysis of about 25,000 Italian firms also suggests that control of GVC activities, as compared to ownership, yields benefits in terms of greater propensity toward innovation, increased productivity, and faster sales growth (Brancati, Brancati, & Maresca, 2017 ). The preference for control without ownership is enabled by increasing digital connectivity, which allows lead firms to influence various units in the GVC without directly managing them (Foster, Graham, Mann, Waema, & Friederici, 2018 ).

To some extent, control decisions are impacted by host countries’ regulatory environments, particularly when national political institutions create pressure for local content on MNEs that are trying to gain access to large downstream markets in emerging economies (Lund-Thomsen & Coe, 2015 ; Morris & Staritz, 2014 ; Sturgeon, Van Biesebroeck, & Gereffi, 2008 ). This is the case with “obligated embeddedness” (Liu & Dicken, 2006 : 1238) of automotive MNEs in China, where the government’s industrial policy dictates that inward FDI should take a JV form. Further, control decisions are linked to sectoral and functional factors – for example, lead MNEs operating in high- and medium-technology sectors and/or locating knowledge-intensive functions (e.g., innovation) in host markets are more likely to pursue ownership in jurisdictions that offer weaker IP protection (Ascani, Crescenzi, & Iammarino, 2016 ). Ownership allows the MNE to have better control over the creation, transfer and leakage of propriety knowledge, and is thus a pre-emptive measure for knowledge protection.

However, considerable heterogeneity in control decisions exists among lead firms operating in the same geographic regions and industry sectors, which suggests that firm-level strategic considerations, and not only macro-level forces, are powerful drivers of control patterns in GVCs (Dallas, 2015 ; Sako & Zylberberg, 2019 ). These considerations include lead firms’ levels of specialization, the nature of their relationships with partners, the need for flexibility versus stability in offshore operations, and the value of the operations to the lead firm (Amendolagine, Presbitero, Rabellotti, & Sanfilippo, 2019 ; Dallas, 2015 ; Kleibert, 2016 ). Control decisions can be also driven by the level of local adaptation required, whereby the lead MNE may need to source external expertise in order to perform the desired degree of customization. Here, a carefully designed mix of internalized and externalized, yet managerially or technologically linked, activities is argued to allow the lead firm to achieve the ultimate balance between integration and responsiveness (Buckley, 2014 ).

Location decisions determine the most advantageous geographical configuration of the GVC, namely, where activities should be located, and how they should be distributed in order to maximize the value created in and captured through the GVC. Location decisions encompass such considerations as the regional effect (Rugman & Verbeke, 2004 ), the nature of industrial clusters (Turkina & Van Assche, 2018 ), and the links between GVCs and local clusters. Location decisions are tightly intertwined with control decisions discussed earlier. For example, FDI (as opposed to market contracting) enables the MNE to construct a regional, or even global, network under its control to supply wide-ranging, differentiated and low cost products in a flexible manner. Chen’s ( 2003 ) study of electronics firms in Taiwan indicates that FDI often starts at a location close to the home base, where resources from domestic networks can be drawn, and subsequently moves on to more distant locations, after the lead firm has developed a regional sub-network to support its further expansion.

Location considerations are linked to macro-level characteristics of host and home countries, including level of economic development and corresponding factors such as cost of labor, technological environment, and institutional quality. Among these factors, favorable business regulations, IP protection, and significant education spending typically attract technologically and functionally sophisticated activities (Amendolagine et al., 2019 ; Ascani et al., 2016 ; Pipkin & Fuentes, 2017 ). Control of the GVC resides in the hands of technology and/or market leaders, which are typically (although not always) located in developed economies and extract value from their GVCs through global orchestration capabilities (Buckley & Tian, 2017 ). Countries with more advanced production technologies are naturally engaged more in the upstream segments of the GVC, and become key suppliers to other countries in the region, thus supporting regional integration of production (Amendolagine et al., 2019 ; Suder, Liesch, Inomata, Mihailova, & Meng, 2015 ).

Most empirical studies address location of production activities, whereby labor cost emerges as one of the core determinants for GVCs led by both advanced economy MNEs (AMNEs) and emerging economy MNEs (EMNEs). For example, Asian tier 1 suppliers to MNEs and OEMs become GVC lead firms in their own right by shifting production to lower cost locations in the region (Azmeh & Nadvi, 2014 ; Chen, Wei, Hu, & Muralidharan, 2016 ). Yet efficiency-seeking offshoring may create strategic issues, particularly when inefficient local institutions fail to prevent unwanted knowledge dissipation. Issues can also emerge on the demand side due to sustainability and ethical breaches in large MNEs’ value chains, as evidenced in multiple, recent instances of public backlash in response to poor working conditions in manufacturing factories in South and Southeast Asia (Malesky & Mosley, 2018 ). Funk et al.’s ( 2010 ) survey of US consumers suggests that developed economy consumers’ willingness to purchase is negatively affected by partial production shifts to animosity-invoking countries (countries with poor human rights records/with poor diplomatic relationships with the home country). As the wave of consumer movement spreads to less developed countries, it is in the best interest of the lead firm to evaluate carefully the undesirable attributes of a potential host country when making FDI decisions (Amendolagine et al., 2019 ; Morris & Staritz, 2014 ).

Desire to access large and fast-growing consumer markets drives production activities close to end markets, for example, when host country governments in emerging markets pressure MNEs for local operations (Sturgeon et al., 2008 ). Co-location of manufacturing and sales also allows lead firms to be more responsive to customer demands, and to off-set the costs of globally dispersed activities by reducing investment in transportation and logistics (Lampel & Giachetti, 2013 ).

Strategic asset seeking by lead firms and suppliers explains much of the geographic configuration of GVCs, whereby MNEs locate value chain activities in globally specialized units to exploit international division of labor (Asmussen, Pedersen, & Petersen, 2007 ). This is particularly pronounced in knowledge-intensive industries, where lead firms often locate operations in innovation hubs and global cities (Taylor, Derudder, Faulconbridge, Hoyler, & Ni, 2014 ). In their analysis of clusters in the aerospace, biopharma, and ICT industries, Turkina and Van Assche ( 2018 ) demonstrate that innovation in knowledge-intensive clusters benefits from horizontal connection to global hotspots, as opposed to labor-intensive clusters where innovation gains from vertical GVC connections.

While much has been written about fine-slicing and fragmentation of value chain activities in a GVC (Buckley, 2009a , b ), few empirical studies measure the costs and benefits of geographic diversification of operations within the same part of the value chain. Lampel and Giachetti ( 2013 ) address a relationship between international diversification of manufacturing and financial performance in the context of the global automotive industry, and find an inverted U-shaped relationship, whereby advantages of diversified manufacturing (i.e., greater flexibility and access to internationally dispersed strategic resources) are eventually off-set by increased organizational complexity and managerial inefficiencies. Further, location decisions are tied to firms’ strategic priorities beyond cost reduction – for example, increased needs for customer responsiveness and/or enhanced quality control. Focus on such priorities may prompt backshoring initiatives (Ancarani, Di Mauro, & Mascali, 2019 ). Yet, geographic diversification may serve strategic purposes such as IP protection. Gooris and Peeters’ ( 2016 ) survey of offshore service production units demonstrates that lead firms may opt to fragment their global business processes across multiple service production units, rather than co-locating processes, with the explicit purpose of reducing the hazard of knowledge misappropriation.

Finally, technological advances continue to shape geographic make-up of GVCs (MacCarthy, Blome, Olhager, Srai, & Zhao, 2016 ). Few studies in our sample measure the impact of digital technologies on location choice, but several studies address current and potential influences of technology indirectly and/or conceptually. Ancarani et al. ( 2019 ) suggest that adoption of labor-saving technologies leads to backshoring in instances when lead firms compete on quality, rather than on cost. While digital connectivity enables exploiting complementarities between geographically dispersed processes (Gooris & Peeters, 2016 ), it may limit participation by suppliers located in technologically underdeveloped regions (Foster et al., 2018 ). Further, the latest technology, such as 3D printing, is likely to impact GVCs of relevant industries by making them shorter, more dispersed, more local, and closer to end users (Laplume et al., 2016 ; Rehnberg & Ponte, 2018 ).

Network structure

Network structure refers to the structural make-up of a GVC and has been well theorized in some of the most cited GVC conceptual frameworks (e.g., Coe & Yeung, 2015 ; Gereffi, 2018 ; Gereffi et al., 2005 ; Henderson et al., 2002 ). While a GVC can typically be conceptualized as an asymmetrical or high centrality network with a lead firm at its centre (Kano, 2018 ), these networks can also be heterogeneous in terms of such characteristics as depth, density, openness, and the presence of structural holes (Capaldo, 2007 ; Rowley, 1997 ). These characteristics affect power relations in the GVC, the level of control afforded to the lead firm, and innovation and business performance. Not surprisingly, a large number of empirical studies in our review address various dimensions of the nature and/or role of network structures in GVC governance and performance outcomes.

The network structure in a typical GVC can be dyadic or multi-actor in nature, and can affect knowledge flows (Lipparini et al., 2014 ), new venture formation (Carnovale & Yeniyurt, 2014 ), and operational performance (Golini, Deflorin, & Scherrer, 2016 ). A firm with high centrality (i.e., most links in a network) has greater power over other firms in a dyadic or multi-actor network, whereby control can be exerted by the lead firm beyond its legal boundaries over independent – but captive – suppliers (Yamin, 2011 ). In supply chain management, Carnovale and Yeniyurt’s ( 2014 ) study of automotive OEMs and automotive parts suppliers shows that manufacturing JV formation between lead firms and potential partners can be enhanced by higher network centrality of either the lead firm or the potential JV partner. This network centrality is seen as a proxy for greater legitimacy and credibility within the network. However, the study found mixed outcomes in relation to network density. High network density is not necessarily favorable to new JV formation due to “lock-in” effects through structural homophily. This network structure in turn limits access of lead firms to a diverse set of potential partners and hinders learning and innovation. Similarly, the studies of manufacturing plants in various countries by Golini et al. ( 2016 ) and Golini and Gualandris ( 2018 ) demonstrate that a higher level of external supply chain integration (e.g., through GVC activities) can improve the operational performance of and the adoption of sustainable production by manufacturing MNEs due to information sharing, learning, and innovation through supply chain partners.

The density of network structure in GVCs, however, may change over time in relation to the emergence of new technologies and platforms, some of which may favor greater density in localized networks. In their perspective article on 3D printing and GVCs, Laplume et al. ( 2016 ) question if technological advancements can influence the relative density of globally dispersed and localized production networks. As more local firms can participate in the production of high-value components through 3D printing, their need for technological acquisition and/or specialized components through MNE lead firms in GVCs may be reduced, leading to what Rehnberg and Ponte ( 2018 ) call “unbundling” and “rebundling” of GVC activities towards regionalized or even localized GVCs. In this scenario for decentralized GVC network structure, local producers can engage in more transactions with each other, and thus localized production networks may get denser over time.

In addition to centrality and density, network structures in GVCs can also be distinguished by linkage heterogeneity – the mix of horizontal linkages (between firms with similar value chain specialization) and vertical MNE-supplier linkages (with different value chain specialization). This structural mix has significant influence on the innovation performance of firms in different industries (Amendolagine et al., 2019 ; Brancati et al., 2017 ). Drawing on a social network approach, Turkina and Van Assche’s ( 2018 ) study of industrial clusters shows that network structures underpinned by dense horizontal linkages among local firms tend to enhance innovation performance in knowledge-intensive industries, whereas strong vertical linkages between local firms and MNEs can promote innovation in labor-intensive clusters. The former network structure tends to promote innovation through intra-task knowledge capability development among horizontally linked firms. As to the latter case of local suppliers in labor-intensive industries, inter-task capability development can be better served through vertical and international linkages with global lead firms.

Finally, power relations among GVC actors play out very differently in different network structures (Dallas, Ponte, & Sturgeon, 2019 ; Grabs & Ponte, 2019 ). In one of the earliest studies of industrial upgrading through GVC participation, Humphrey and Schmitz ( 2002 ) observed that network structures characterized by quasi-hierarchical power relations in favor of one party – often global lead firms or global buyers – were generally not conducive to the upgrading of local firms. Sturgeon et al. ( 2008 ) followed up with this line of research by examining major American and Japanese automotive lead firms and over 150 suppliers in North America. They found that upgrading of local suppliers was more likely if the GVC network structure moved towards a relational form of power dynamics. Such a relational form of network structure tends to favor inter-firm cooperation and credible commitment (e.g., IKEA and its suppliers in Ivarsson & Alvstam, 2011 and tuna canning firms in Havice & Campling, 2017 ). Similarly, Khan, Lew and Sinkovics’s ( 2015 ) study of the Pakistani automotive industry shows that local firms are more likely to acquire technological know-how and develop new capabilities by participating in geographically dispersed rather than locally oriented networks. Through international JVs (IJVs) with global lead firms, these local firms can access different knowledge base and know-how in those international networks.

As noted earlier, network structures are embedded in different national and institutional contexts. Pipkin & Fuentes ( 2017 ) find that domestic institutional environment, such as state policies and support from business associations, is more significant than lead firms’ influence in shaping network dynamics in developing countries. Horner and Murphy’s ( 2018 ) study of manufacturing firms in India’s pharmaceutical industry shows that network structures characterized by firms from similar national contexts (e.g., the Global South) can be more open and cooperative in relation to production and quality standards, market access, and innovation. This greater openness in South–South GVCs entails different business practices toward their end markets due to lower entry barriers, lower margins, and higher volumes. The opportunities for learning in these GVCs are also different from those tightly controlled and coordinated by lead firms from the Global North. Another study of chocolate GVCs in Indonesia by Neilson, Pritchard, Fold and Dwiartama ( 2018 ) also points to the importance of contextual heterogeneity in shaping the influence of different network structures on lead firm behavior and relationships with suppliers and distributors. Drawing upon Yeung and Coe’s ( 2015 ) GPN 2.0 theory, Neilson et al. ( 2018 ) argue that network structures differ significantly between branded chocolate manufacturing and cocoa farming/processing in agrofood manufacturing. Owing to domestic industrial policy and international business lobbying, the role of national context is much more pronounced in the network structure of cocoa farming/processing that favors inter-firm partnership and cooperative learning.

Conceptual studies have identified knowledge diffusion and transfer as an important aspect of network governance (Ernst & Kim, 2002 ; Inkpen & Tsang, 2005 ). Empirical studies take note of this topic and examine various dimensions of learning in a GVC. Most of such studies in our sample focus on interfirm learning in the context of capability development, technological catch-up and upgrading by peripheral GVC actors – that is, emerging economy suppliers’ progression from OEM to original design manufacturing (ODM) and to own brand manufacturing (OBM). As touched upon in the previous section, macro-level conditions such as market forces and state policies, rather than lead firm initiatives, are argued to be the main force in spurring supplier upgrading (Pipkin & Fuentes, 2017 ). Upgrading initiatives can produce a wide range of results, from incremental to significant leaps in market position (Pipkin & Fuentes, 2017 ), depending on a number of factors. Eng and Spickett-Jones ( 2009 ) argue that upgrading hinges on suppliers’ ability to simultaneously develop three sets of marketing capabilities: product development, marketing communication, and channel management. Wang, Wei, Liu, Wang and Lin’s ( 2014 ) study of manufacturing firms in China indicates that the presence of MNEs alone does not guarantee knowledge spillovers, and may in fact have a negative impact on indigenous firms’ domestic performance due to increased competition. Hatani ( 2009 ) describes barriers to learning by emerging market GVC suppliers. Her study of autoparts suppliers in China suggests that excessive inward FDI limits interactions between lead firms and local suppliers and thus creates structural obstacles to technology spillovers to lower GVC tiers. Also researching the autoparts industry (but in Argentina rather than China), McDermott and Corredoira ( 2010 ) suggest that supplier upgrading is facilitated by regular, disciplined discussions with the lead firm about product and process improvement; in this context, a limited amount of direct social ties to international assemblers appears to be the most beneficial.

In a follow-up study, Corredoira and McDermott ( 2014 ) find that lead firms alone do not help process upgrading, but add value particularly when emerging market suppliers’ ties to MNEs are augmented with multiple, strong ties to non-market institutions (e.g., universities and business associations), which act as knowledge-bridgers and help suppliers tap into knowledge embedded in the home country. These types of ties are particularly useful for accessing knowledge for the development of exploitative innovation, while exploratory innovation is best achieved through participation in trade fairs and collaboration with international (rather than domestic) institutions, according to the study of Pakistani motorcycle part suppliers by Khan, Rao-Nicholson and Tarba ( 2018 ). Similarly, Jean’s ( 2014 ) study of new technology ventures in China indicates that firms that participate in trade shows and have strong quality control practices are more likely to develop requisite knowledge to pursue upgrading, while firms engaging in Internet-based business-to-business transactions are less likely to upgrade. Based on their studies of the garment and toy industries, Azmeh and Nadvi ( 2014 ) as well as Chen et al. ( 2016 ) describe alternative paths to upgrading: some OEMs invest in R&D to enter the ODM business, or invest in marketing and branding and move toward the downstream end of the value chain to become OBMs. Others achieve competitive gains by shifting production to different locations and learning how to effectively coordinate multiple production locations (see also detailed case studies of ODMs from Taiwan and Singapore and OBMs from South Korea in Yeung, 2016 ). Buckley ( 2009b ) suggests that both options – incremental upgrading within the established GVC and developing a new GVC under local control – are difficult in that they require mobilization of entrepreneurial abilities and development of sophisticated managerial skills. Successful upgrading hinges not only on suppliers’ acquisition of knowledge, but also on their ability to absorb it and transform it into innovation, which ultimately improves suppliers’ position in GVCs (Khan et al., 2019 ).

Specific knowledge acquisition strategies required for upgrading vary depending on the nature of home institutions and labor markets (Barrientos, Knorringa, Evers, Visser, & Opondo, 2016 ; Pipkin & Fuentes, 2017 ; Werner, 2012 ). Weak home institutions hinder the transformation of knowledge into actual innovative products and processes (Jean, 2014 ). This explains why catch-up and upgrading by GVC suppliers often mirrors the evolution of home institutions (Kumaraswamy, Mudambi, Saranga, & Tripathy, 2012 ): as institutions evolve toward liberalization, upgrading strategies change from upgrading technical competencies through licensing and collaborations, to upgrading internal R&D and developing strong relationships with lead firms. The weakness of local institutions can be overcome by gaining knowledge through participation in international networks and collaboration with global suppliers (Khan et al., 2018 ).

The nature of relationship among parties in GVCs matters for technological knowledge transfer, as network ties are channels through which knowledge flows. Khan et al.’s ( 2015 ) above-mentioned study indicates that IJVs represent a governance vehicle that facilitates the creation of social capital between focal MNEs and automotive parts suppliers located in emerging economies, and thus facilitate development and acquisition of complex technological knowledge by local firms.

Learning and knowledge accumulation and diffusion in the lead firm, as well as lead-firm initiated network-wide learning, garnered significantly less scholarly attention, with one notable exception. Through analyzing Italian motorcycle industry projects carried out via dyads of buyers and suppliers, Lipparini et al. ( 2014 ) develop a framework that addresses multi-directional, multilevel and multiphase knowledge flows in a GVC, and describe practices implemented by lead firms to successfully cultivate creation, transfer and recombination of specialized knowledge to facilitate network-wide learning. In such a dynamic and somewhat open context of knowledge sharing, the threat of opportunism is likely to be outweighed by the advantages of learning from other network members.

There appears to be consensus in the literature that strong linkages within the GVC – frequently referred to as embeddedness of actors in the network (Henderson et al., 2002 ) – are conducive to transferring various types of knowledge, including production processes, sourcing practices, technological knowledge, and innovation capabilities (Golini et al., 2016 ; Golini & Gualandris, 2018 ; Ivarsson & Alvstam, 2011 ). Such linkages are the most effective when purposefully facilitated by strong lead firms. Lead firms can impel capability upgrading on peripheral units by leveraging their central positions and complementary assets, as indicated by the acquisition of UK-based Dynex by China’s Times Electric (He, Khan, & Shenkar, 2018 ). Ivarsson and Alvstam’s ( 2011 ) case study of IKEA and its suppliers in China and Southeast Asia similarly shows that lead firms can contribute to peripheral units’ upgrading by fostering close, long-term interactions, and by offering technological support. Conversely, weak strategic coupling between lead firms and peripheral units hurts knowledge transfer and capability development (Yeung, 2016 ). For example, Pavlínek’s ( 2018 ) study of automotive firms in Slovakia suggests that weak and dependent supplier linkages between MNEs and domestic firms undermine the potential for technology and knowledge transfer from the former to the domestic economy.

Lead firms are often motivated to drive their suppliers’ capability upgrading, because they themselves benefit from suppliers’ enhanced capabilities through improved sourcing efficiency, higher-quality inputs, and more generally valuable knowledge diffusion throughout the GVC. In the next section, we discuss how characteristics of the lead firm impact its position and role in the GVC.

Impact of lead firm

Extant conceptual research has acknowledged that smooth and efficient functioning of the GVC is contingent on the lead firm’s ability to establish, coordinate and lead the network (Kano, 2018 ; Yamin, 2011 ; Yeung, 2016 ; Yeung & Coe, 2015 ). Buckley ( 2009a ) argues that the role of headquarters is more important in a GVC than in a conventional hierarchical MNE, because leading a GVC demands specific management capabilities such as the ability to fine-slice the value chain, control information, and coordinate strategies of external organizations. Yet few studies directly investigate the specific impact of lead firm characteristics on the boundaries, configurations and performance of the GVC. The studies that do use lead firm features as independent variables focus on such aspects of the lead firm as size (small versus large), industry sector (and associated sector-specific value chain strategies), location (headquarters location in a particular region/in emerging versus developed markets, and proximity to clusters), and technological leadership.

Lead firm size appears to be seen as a proxy for power and influence in a network. Eriksson et al. ( 2014 ), in a case study of a Finnish high-tech SME at the centre of a globally dispersed value chain, argue that SMEs face additional liabilities of smallness and newness when managing a GVC, and suggest that in order to manage successfully a GVC over the long term, the SME must develop three distinct yet related sets of dynamic capabilities: cognitive, managerial, and organizational. Dallas ( 2015 ) takes a finer-grained view of firm size as a determinant of GVC management strategy. While his analysis of transactional data of Chinese electronics/light industry firms uses size as a control, rather than independent, variable, he concludes that ways in which GVCs are organized vary not simply by lead firm size and productivity, but also by other heterogeneous firm level features, such as distinct governance channels available to lead firms. Dallas ( 2015 ) thus cautions GVC researchers not to make assumptions about the distinctiveness of large lead firms as a group, and to focus on other potential sources of heterogeneity, which can be linked to sector-specific features as well as firm-level strategies.

One of such sources of heterogeneity appears to be the level of economic development of home country, dichotomized in some GVC papers as emerging versus advanced. Two studies explore differences in GVCs led by EMNEs versus AMNEs. He et al. ( 2018 ), based on a case analysis of China’s Times Electric-led GVC, argue that power relationships in the GVC seem to be more balanced when EMNEs, rather than AMNEs, are in lead positions. Buckley and Tian ( 2017 ) compare internationalization patterns of top non-financial EMNEs and AMNEs, and find that AMNEs are more likely to achieve profitability through global GVC orchestration, while EMNEs’ ability to develop orchestration know-how is restricted by home institutions. Therefore, EMNEs are more likely to extract monopoly-based rents from internationalization, but to remain constrained to the periphery position in GVCs.

It follows, then, that control of the GVC is likely to remain in the hands of technology leaders (Buckley & Tian, 2017 ). Jacobides and Tae ( 2015 ) describe such technology leaders as “kingpins,” operationalized as firms with superior market capitalization and comparatively high R&D investment. In their study of firms active in various segments in the US computer industry, the authors show that “kingpins” impact value distribution and migration through the value chain. Technological and R&D capabilities, however, need to be accompanied by global orchestration know-how in order for lead firms to achieve profitability from fragmented, globally dispersed operations (Buckley & Tian, 2017 ). We address GVC orchestration in the next section.

GVC orchestration

Orchestration refers to decisions and actions by lead firm managers – a managerial toolkit – aimed at connecting, coordinating, leading, and serving GVC partners, and ultimately shaping the network’s strategy (Rugman & D’Cruz, 1997 ). Orchestration encompasses such elements as, inter alia , formal and informal components of each relationship within the network, the entrepreneurial element of resource bundling, interest alignment among parties achieved through strategic leadership by the lead firm, knowledge management 4 , and value distribution.

Formal orchestration tools – that is, codified rules, specific contractual choices to manage partner relationships, and price-like incentives and penalties – are typically easier to observe and operationalize than informal tools such as social mechanisms deployed by lead firms to govern relationships. Yet, only a few studies in our sample investigate contractual choices in a GVC. Lojacono, Misani and Tallman ( 2017 ) examine nuances of cooperative governance in the dispersed value chain of the home appliances industry, and find that more complex transactions requiring greater coordination are more likely to be governed through equity participation. Specifically, non-equity contracts are more efficient for coordinating offshore production, while equity JVs are preferable for managing local strategic relationships, such as production alliances whose primary objective is to serve local markets. Chiarvesio and Di Maria ( 2009 ) explore differences in GVC orchestration between lead firms located within industrial districts versus those located outside. Their quantitative study of Italian firms active in the country’s four dominant industries – furniture, engineering, fashion, and food – shows that there are subtle differences in ways district and non-district lead firms manage their GVCs to achieve optimal efficiency: while lead firms located within industrial districts rely more on local systems through subcontracting networks, non-district firms invest in national level subcontracting. Here, local subcontracting networks allow lead firms to exploit flexibility, and national subcontracting facilitates greater efficiency and acquisition of value-added competences through the GVC. Of note, these differences decrease as firm size increases. Finally, Enderwick ( 2018 ) conceptually studies responsibility boundaries in a GVC, and argues that the full extent of lead firm responsibility for actions of indirect GVC participants depends on whether indirect partners’ contracts are exclusive or non-exclusive.

Entrepreneurial guidance by the lead firm is an important component of GVC orchestration (Buckley, 2009a ), as it serves to redirect GVC resources and tasks toward creating innovation. While most research in our sample implicitly assumes the lead firm’s entrepreneurial role in generating value, two empirical studies take a close look at the process of entrepreneurial resource recombination in a GVC, initiated by the lead firm. In a multiple case study of engineering firms, Zhang and Gregory ( 2011 ) identify mechanisms of value creation in global engineering networks: efficiency, innovation, and flexibility. The efficacy of these mechanisms depends on which part of the engineering value chain is the core focus of the operations: product development/production, design/idea generation, or service/support. Ivarsson and Alvstam ( 2011 ) discuss how IKEA manages resources to generate greater value and stimulate innovation capabilities in its supply chain. Their case study reveals that IKEA provides access to inputs through global sourcing, shares business intelligence, implements management systems and business policies across the network, and fosters informal R&D collaborations with suppliers.

Relational governance, as perhaps the most important of the five types of GVC governance in Gereffi et al.’s ( 2005 ) typology, emerged as a key tool for network orchestration. There appears to be a broad consensus in our sample that cultivating informal relationships, as a means of network orchestration, has a potential to facilitate knowledge transfer, secure commitments, enhance innovation, respond to legislation, and improve overall GVC efficiency. In fact, Brancati et al. ( 2017 ) show, based on a survey of about 25,000 Italian firms, that GVCs comprised of firms with strong relationships and active decisional roles in the value chain have a 4-6% higher probability of engaging in innovation and R&D, and display greater productivity and sales growth. Benstead, Hendry and Stevenson ( 2018 ) argue that relational capital facilitates successful horizontal collaboration among GVC members, which allows participating firms to respond more effectively to modern slavery legislation in the textiles and fashion industry, and consequently improve reputation and performance. In a case study of major American and Japanese automotive lead firms and their suppliers, Sturgeon et al. ( 2008 ) find that relational governance is necessitated by rising product complexity, low process codifiability and a paucity of industry-level standards. These relational links explain continued dominance of regional structures in the industry.

Studies have described specific relational strategies deployed by lead firms. These include promoting regular communication between suppliers and buyers (McDermott & Corredoira, 2010 ), adapting communication strategies to cultural contexts where GVC partners are embedded (Griffith & Myers, 2005 ), involving multiple actors in establishing functioning principles for the GVC, facilitating shared identity and common language (Lipparini et al., 2014 ), extending the network to include non-market institutions (Corredoira & McDermott, 2014 ; Kano, 2018 ; Pipkin & Fuentes, 2017 ), investing into image building (Horner & Murphy, 2018 ), and establishing a long-term horizon for inter-unit relationships to facilitate repeated interactions (Ivarsson & Alvstam, 2011 ).

Finally, extant research identifies GVC value distribution as the responsibility of the orchestrating firm. The lead firm must ensure that partners receive an equitable share of value created in the GVC, as a function of their respective contributions to the network (Dhanaraj & Parkhe, 2006 ). In most studies in our sample, a power view of the GVC is assumed, whereby value distribution is seen to be a result of the power struggle between the lead firm and the periphery. Typically, lead firms – particularly those that possess valuable technological knowledge and/or intangibles such as brand names and patents – are argued to capture the lion share of the value (Jacobides & Tae, 2015 ), while most peripheral players appear in a subordinate position and under high cost pressures (Taplin, Winterton, & Winterton, 2003 ), and must deploy strategies to counter the power of the lead firm (Grabs & Ponte, 2019 ; Havice & Campling, 2017 ; Pipkin & Fuentes, 2017 ), including attempts to move up the value chain, as discussed above. This power imbalance appears to be more pronounced in GVCs led by AMNEs than those led by EMNEs, because lead EMNEs are likely to build their GVCs with a knowledge-seeking objective, by enlisting AMNEs that possess desired knowledge (He et al., 2018 ).

Some conceptual studies in our sample approach the issue of value distribution as a deliberate orchestration tool on behalf of the lead firm. Kano ( 2018 ) argues that equitable value distribution improves reliability of partners and enhances sustainability of the GVC over time. Of note, equitable value distribution undermines potential efficiency gains achieved through externalization of activities; however, as argued by Yamin ( 2011 ), such sacrifice in terms of loss of efficiency may be necessary in order to ensure legitimacy and survival of the network.

Governance and performance outcomes

A significant proportion of papers in our sample is concerned with developing typologies, mapping linkages in GVCs, analyzing configurations, and investigating processes, without an explicit focus on performance. Studies that addresses performance per se conceptualize and measure performance outcomes in a variety of ways, depending on research questions and units of analysis. Most studies focusing on GVC suppliers are concerned with upgrading as a performance goal, as evidenced by suppliers’ development of technological and/or branding capabilities, or by their ability to reconfigure activities so as to become lead firms in their own right (e.g., Azmeh & Nadvi, 2014 ; Buckley 2009b ; Chen et al., 2016 ).

Studies focusing on lead firms are more likely to use financial performance measures as indicators of GVC success: for example, value capture as measured by comparative market capitalizations of various industrial sectors (Jacobides & Tae, 2015 ), sales and profit growth (Griffith & Myers, 2005 ), and return on assets (Buckley & Tian, 2017 ; Lampel & Giachetti, 2013 ). Other conceptualizations of lead firm performance include, inter alia , its ability to exercise control over independent partners and coordinate division of labor (Casson, 2013 ; Strange & Newton, 2006 ), ability to minimize the total sum of transaction costs (Buckley, 2009a ), capability development (Eriksson et al., 2014 ), and corporate social responsibility (CSR) performance (Enderwick, 2018 ).

Studies concerned with performance of the GVC network as a whole naturally explore more complex aspects of performance, such as flexibility/dynamism of the production process, access to a wide range of resources, operational efficiency, cohesiveness/connectivity, innovation/ability to transform ideas into commercial products, and sustainability of the GVC over time (Akkermans et al., 1999 ; Buckley, 2011 ; Chen, 2003 ; Colotla, Shi, & Gregory, 2003 ; Kano, 2018 ; Karlsson, 2003 ; Sinkovics et al., 2019 ; Yamin, 2011 ; Zhang & Gregory, 2011 ). Notably, studies in the social sciences group may focus on development and sustainability outcomes of GVC governance, such as industrial/economic development and positive institutional change (e.g., Coe et al., 2004 ; Fuller & Phelps, 2018 ; Henderson et al., 2002 ; Lund-Thomsen & Coe, 2015 ; Pavlínek, 2018 ; Yeung, 2016 ). Due to its complexity and multifariousness, GVC-level performance is difficult to operationalize quantitatively, and is mostly addressed in qualitative and conceptual studies in our sample.

Macro-level: Interaction of Home and Host Environment Characteristics and GVC Governance

GVC organization is contingent on a number of location characteristics, including levels of economic development (Mudambi, 2007 ), IP and FDI protection regimes (Johns & Wellhausen, 2016 ), trade and tariff regimes (Curran, Nadvi, & Campling, 2019 ; Kim, Milner, Bernauer, Osgood, Spilker, & Tingley, 2019 ), regulatory environments and government policy interventions, labor costs, level of technological sophistication, and societal norms (Dunning, 1988 ). The role of the state, in particular, can significantly shape the organization and evolution of GVCs over time (Alford & Phillips, 2018 ; Coe & Yeung, 2019 ; Smith, 2015 ; Yeung, 2016 ). Macro-level impacts on GVC governance have been discussed in the preceding sections, but we summarize the key themes and findings below.

Institutional factors, such as trade regulations and the strength of local institutions, are major determinants of GVC governance attributes, including geographic and structural configuration, operating mode choices, power balance, and possibility of upgrading by peripheral players. Host country institutions can both attract investment by lead firms through policies encouraging local content and promoting local supplier linkages (Amendolagine et al., 2019 ; Dawley, MacKinnon, & Pollock, 2019 ; Liu & Dicken, 2006 ; Sturgeon et al., 2008 ; Yeung, 2016 ), and deter such investment due to insufficient IP protection and underdeveloped legal systems (Gooris & Peeters, 2016 ). However, the impact of host country institutional environment on GVCs is heterogeneous: while it is tempting to assume that lead firms are attracted by favorable local business regulations and strong institutions, this impact in fact varies across GVCs, depending on specific functions/activities being offshored, internationalization motives, and lead firm-level strategies and capabilities (Ascani et al., 2016 ; Morris & Staritz, 2014 ).

One conclusion that can be drawn from our review is that institutions greatly impact GVCs’ abilities to engage in, and profit from, innovation. Inadequate local institutions prevent domestic firms from transforming R&D into innovative products and services (Buckley & Tian, 2017 ; Jean, 2014 ), and thus effectively hinder supplier catch-up and upgrading. This likely explains why most GVCs are controlled by MNEs that stem from developed institutional environments and, consequently, display technological leadership. Peripheral players in GVCs can respond to this challenge by entering into international collaborations, engaging with international institutions, and more broadly becoming embedded in international networks that off-set the weakness of local institutions (Khan et al., 2015 , 2018 ; Pipkin & Fuentes, 2017 ). This is a crucial dimension of strategic coupling in GPN 2.0 theory (Coe & Yeung, 2015 ; Yeung, 2009 , 2016 ). It is important to note that the impact of institutions is dynamic. As trade, liberalization and economic development in emerging markets progress, so do suppliers’ strategies. Internal R&D becomes a dominant strategy for upgrading (Kumaraswamy et al., 2012 ), and suppliers with more advanced technologies become core players in their regional networks (Suder et al., 2015 ).

Economic factors, such as labor cost and supply, markets and competition (MacCarthy et al., 2016 ), impact GVC configurations and, more recently, determine further production shifts in GVCs, whereby tier 1 GVC suppliers begin disintegrating their own value chains, in search of both greater efficiency (as a response to rising labor costs) and better production capabilities (Azmeh & Nadvi, 2014 ; Suder et al., 2015 ). In the terminology of GPN 2.0 (Coe & Yeung, 2015 ), this simultaneous attainment of both cost efficiency and production capabilities is translated into lower cost-capability ratios in favor of strategic partners and suppliers of global lead firms. This strategy is an alternative to functional upgrading discussed above (Chen et al., 2016 ; Humphrey & Schmitz, 2002 ; Sako & Zylberberg, 2019 ), and represents a different type of upgrading, where major suppliers become MNEs in their own right, e.g., leading ODMs such as Quanta and Wistron and contract manufacturers such as Foxconn, Flex, and Venture from East Asian economies (Yeung, 2016 ).

The impact of macro-level cultural characteristics is considered in a smaller subset of studies, and mainly in relation to the lead firm’s strategic governance routines. Griffith and Myers ( 2005 ) suggest that host country cultural expectations impact GVC performance by affecting the lead firm’s ability to effectively deploy relational strategies across the network. They argue that cultural adaptation of relational governance results in improved performance. Sturgeon et al. ( 2008 ) discuss the impact of home country cultural characteristics on American and Japanese lead firms’ abilities to successfully engage in relational governance. Only one study (Funk et al., 2010 ) analyzes the broader impact of home country consumers’ cultural characteristics on GVC profitability, using Schwartz’s ( 2006 ) theory of values.

It is acknowledged that technology is one of the major macro-level factors impacting a GVC over its lifecycle (MacCarthy et al., 2016 ). In the prior section, we have discussed ways in which advanced technologies impact structural and strategic governance decisions in a GVC, mostly in the context of facilitating connectivity and determining innovation and power loci in the network. Some studies in our sample investigate a direct impact of the latest, advanced technologies on GVC configurations. Laplume et al. ( 2016 ) analyze potential impact of 3D printing technologies on GVC structure and geographic reach. Treiblmaier ( 2018 ) discusses potential implications of blockchain technology for various aspect of GVC management, including boundaries, structures and relationships.

GVCs are not only impacted by, but also influence the macro-environment; specifically, sustainability impacts of GVCs and associated policy implications have to date invited much scholarly and practitioner dialogue (Coe & Yeung, 2015 ; Gereffi, 2018 ). This interest is to some extent reflected in our sample, yet few studies explicitly address ways in which GVCs affect social, economic and environmental conditions in host countries. For example, labor standards have become one critical frontier of GVC organization (Hastings, 2019 ; Malesky & Mosley, 2018 ). Lund-Thomsen and Coe ( 2015 ) studied Nike’s main football supplier factory in Pakistan, and investigated whether CSR initiatives by the lead firm can facilitate or constrain labor agency in GVCs. Their results indicate that lead firms are limited in their ability to shape local labor agency, as it is impacted by wider economic forces, relationships with local and national actors, and local regulatory frameworks; these factors can place clear limits on lead firms’ efforts to facilitate responsible forms of GVC. Barrientos et al. ( 2016 ) address the impact of diffusion by global and regional supermarkets in “global South” – South Africa, Kenya, and Uganda – and find that entry by large global retailers provides new opportunities for strategic diversification to the most skilled local horticultural producers and workers. This facilitates economic and social upgrading; yet, persisting economic downgrading pressures mean that many less skilled suppliers are excluded from both global and regional value chains. Kleibert ( 2016 ) explores local impacts of the Philippinean offshore service offices’ participation in GVCs, and finds that the majority of these offshore offices are characterized by foreign ownership and a high degree of dependency. However, participation in the GVC increases the number and quality of jobs in the region, and creates new opportunities in the labor force – particularly for young college graduates, who suffer from a high level of unemployment in the region. Finally, in a longitudinal study of the international canned tuna industry, Havice and Campling ( 2017 : 309) argue that value chain governance and environmental governance are “mutually constituted”: lead firm power dynamic is inextricable from the environmental conditions of production, and interfirm strategies work not only with, but also through , environmental governance.

CRITICAL ASSESSMENT OF EXTANT LITERATURE AND FUTURE RESEARCH AVENUES

Conceptual underpinnings and the theory of the gvc.

Our systematic analysis of the GVC literature reveals the theoretical and empirical terrains that have been covered to date, and shows that a substantial body of work has been accumulated to advance our understanding of the GVC phenomenon. One observation that emerged in our review is a high degree of theoretical pluralism. This is to be expected due to the multidimensionality of the construct, and the multidisciplinary nature of the review. One of the more common theoretical approaches deployed in IB, management, and supply chain/operations studies is based on various forms of business network theory (Carnovale & Yeniyurt, 2014 ; Chen, 2003 ; Golini et al., 2016 ; Humphrey & Schmitz, 2002 ; McDermott & Corredoira, 2010 ). Many studies investigating capability development and upgrading rely on capability-based theories, such as dynamic capabilities, resource-based view (RBV), knowledge-based view and organizational learning (Chen et al., 2016 ; Corredoira & McDermott, 2014 ; Eriksson et al., 2014 ; Jean, 2014 ), as well as theories of innovation (Golini et al., 2016 ; Werner, 2012 ). Macro-level trade and development theories (Dallas, 2015 ; Seppälä et al., 2014 ), institutional theory (Hatani, 2009 ) as well as resource dependency theory (He et al., 2018 ; Suder et al., 2015 ) are invoked in several studies focusing on geographic and structural make-up of GVCs.

Several IB studies, particularly those conducted within the global factory research stream and those investigating host country governance mode dynamics, adopt an internalization theory perspective (Buckley & Tian, 2017 ; Eriksson et al., 2014 ; Gooris & Peeters, 2016 ; Hilleman & Gestrin, 2016 , Kumaraswamy et al., 2012 ). A number of other theoretical angles, perspectives or frameworks are used to address specific research questions. These include international entrepreneurship (Eriksson et al., 2014 ), cultural values and norms (Funk et al., 2010 ; Griffith & Myers, 2005 ), and theories of clusters and cities (Brown, Derudder, Parnreiter, Pelupessy, Taylor, & Witlox, 2010 ; Turkina & Van Assche, 2018 ). Some studies attempt to address the complexity of the GVC phenomenon by merging interdisciplinary theoretical lenses: for example, Turkina and Van Assche ( 2018 ) combine insights from IB theory, economic geography, and social network analysis to study innovation in knowledge-intensive clusters; Treiblmaier ( 2018 ) develops a framework to explain the role of blockchain technology in GVCs based on four theories: principle-agent theory, TCE, RBV, and network theory.

Yet, despite the impressive amount of research investigating the GVC phenomenon from a variety of theoretical angles, it appears that we do not yet have a dominant theory of GVC. A number of studies – particularly those in the economic geography and economic sociology research streams – refer to the GVC theory of Gereffi et al. ( 2005 ) (or, alternatively, GPN/GCC theory, see, for example, Blažek, 2015 ; Brancati et al., 2017 ; Hatani, 2009 ; Neilson et al., 2018 ; Sturgeon et al., 2008 ; in a recent review by Coe & Yeung, 2015 ). However, as mentioned above, existing GVC frameworks (e.g., Gereffi, 1994 ; Henderson et al., 2002 ) and typologies (e.g., Gereffi et al., 2005 ) do not provide detailed causal mechanisms (Bunge, 1997 ), and thus do not constitute predictive theory of GVC in a sense of offering “a statement of relations among concepts within a set of boundary assumptions and constraints” (Bacharach, 1989 : 496). Instead, they are useful organizing frames for empirical research on GVCs. Although Coe and Yeung’s ( 2015 ) recent book on GPN 2.0 theory comes closer to a causal approach to theory development, there is still a lack of empirical studies to test its generality, validity, and robustness (e.g., Coe & Yeung, 2019 ; Neilson et al., 2018 ). Overall, GVC is a complex construct that captures a particular empirical phenomenon, namely progressive disintegration and geographic dispersion of MNEs’ value chains. The studies reviewed here investigate various dimensions of this construct and establish links among select dimensions, but fall short of developing an overarching theory of GVC that can adequately explain the phenomenon, preferably with some predictive power. Admittedly, predictability is difficult to achieve in social science theories, where the validity of predictions depends upon elusive ceteris paribus conditions (Bhaskar, 1998 ). Yet, in an applied field such as IB, predictive capacity makes our theories actionable for managers, and therefore is viewed as a desirable (though hard to attain) outcome of theory development.

Here, our comparative institutional analysis-based model (Figure  1 ) can be used as an eclectic framework that integrates various theoretical perspectives in order to explain the functioning of the GVC, and, we hope, predict specific outcomes, in terms of benefits accrued to GVC participants and chain-level sustainability. From the internalization theory perspective, a GVC will be sustained over time only if GVC governance is comparatively more efficient than alternative governance forms. The lead firm thus must manage inefficiencies at the macro-level (e.g., institutional frailties, economic shifts, public push-back, technological complexities), at the GVC level (e.g., need for structural changes, shifting power dynamics among partners, unequitable value distribution), and at the micro-level (e.g., cognitive biases, information asymmetries, commitment failures), by economizing on bounded rationality and reliability involved in GVC-related transactions, and by fostering an environment conducive to value creation and capture in the GVC (Kano, 2018 ). The lead firm must select and implement structural features and strategic governance routines that best serve these economizing objectives.

Taken together, the studies in our sample address all elements of our comparative institutional framework, although some elements have garnered more scholarly attention than others. Our review reveals a number of knowledge gaps, which indicate promising research directions for IB, management studies, and the broader social sciences. We discuss these in the next section.

Knowledge Gaps and Direction for Future Research

Microfoundations of gvc governance.

The microfoundational aspect appears to be underrepresented in our sample. While microfoundational assumptions are frequently made, they are rarely articulated or examined empirically. This is concerning particularly because GVC configurations are essentially outcomes of managerial choice. Our ability to predict accurately these configurations hinges on our understanding of the individual, which is for the most part omitted in our sample. Even papers that examine learning are typically silent on the role of individual behavior. In particular, studies based on archival data often engage in what Tsang ( 2006 : 999) calls “assumption-omitted testing”; that is, although key behavioral assumptions may be made implicitly or explicitly for the purpose of developing hypotheses, such assumptions are not tested empirically.

It should be noted that this gap is particularly evident in IB and management literatures. Sociology, development studies and economic geography literature does address individual motivations and behavior, mostly through the case study and/or ethnographic methods. Yet, economics-based research tends to steer away from directly examining such psychological factors. The fact remains that few narratives at the individual level are published in the journals represented in our review.

Future IB studies could explicate individual-level assumptions, and examine specific links between these assumptions and various components of GVC governance, such as ownership and control decisions, geographic and structural configurations, knowledge management, and network orchestration. In particular, the largely under-researched aspects of value distribution in a GVC could be advanced by incorporating specific microfoundational assumptions. Current narrative on value distribution implies a certain level of bounded rationality and bounded reliability of decision-makers. First, managers find it difficult to identify accurately where the most value is generated in the network (Seppälä et al., 2014 ). Second, most studies that address value distribution assume the presence of a power struggle among the players, whereby each actor attempts to appropriate the greatest amount of value, frequently at the expense of other players – consider the proverbial case of large buyers in Gereffi’s ( 1994 ) buyer-driven commodity chains or Gereffi et al. ( 2005 ) captive mode of GVC governance. Here, large buyers are assumed to opportunistically squeeze their suppliers to the point where relentless downward cost pressure leads suppliers to make suboptimal, environmentally and socially detrimental choices. However, this power view is not universally applicable, as noted recently in Dallas et al. ( 2019 ). Inequitable value distribution may alienate critical partners and undermine the sustainability of the entire GVC arrangement (Levy, 2008 ; Yamin, 2011 ). It is in the interest of the lead firm to sustain the GVC over time, particularly in situations of bilateral dependence from core suppliers. Explicating and testing individual-level assumptions can help scholars understand mechanisms underlying value distribution in a GVC.

Geographic scope of GVCs and GVC mapping

Location emerged as one of the key variables in empirical GVC studies, yet few empirical studies in our sample attempt to measure the geographic dispersion of value chains investigated, in order to determine whether the scope of these value chains is in fact global, in a sense of a relatively equal distribution of activities across regions (Rugman & Verbeke, 2004 ). In fact, only two studies (Azmeh & Nadvi, 2014 ; Suder et al., 2015 ) directly address the regional effect in GVCs, although a larger number of empirical studies published in economic geography journals (Table  3 ) focus on GVC impacts on location-specific upgrading and regional development. It has been argued that very few truly global value chains are currently in existence, and that the label “global,” used either out of inertia or as a teaser, may in fact misrepresent the actual geographic reach of MNEs’ international networks (Verbeke, Coeurderoy, & Matt, 2018 ). It is therefore the responsibility of GVC scholars to measure systematically the geographic breadth and depth of relevant value chain activities, and to arrive at an accurate definition of what a GVC represents. Such goal could be accomplished through firm-level GVC mapping, namely, linking locations with detailed data on inputs, outputs, flows of services and skills, employment, revenue, and value creation and capture. Unlike international economics studies based on value-added trade data (Escaith, 2014 ; Johnson & Noguera, 2012 ; World Bank, 2019 , 2020 ), such firm-based GVC mapping not only clarifies the geographic scope of economic activity as global versus regional, but also serves an important managerial purpose of specifying the precise location of value creation and capture within the firm and its GVC. This potentially helps managers to appraise comparative efficacy of global, regional and local governance.

Learning in a GVC

As indicated in Inkpen and Tsang’s ( 2005 , 2016 ) conceptual discussion of social capital, networks and knowledge transfer, the topic is surely a challenging as well as fruitful one. A number of empirical studies have examined knowledge diffusion and transfer in a GVC, but knowledge management is discussed mostly in the context of upgrading, technological catch-up and moving up the value chain by peripheral firms and strategic partners. Reverse knowledge transfer and learning in the lead firm are less explored (with the notable exception of Lipparini et al., 2014 ). Further, while recent conceptual studies have called for a closer examination of specific mechanisms for knowledge transfer in a GVC (Pietrobelli & Rabellotti, 2011 ; Cano-Kollmann, Cantwell, Hannigan, Mudambi, & Song, 2016 ; Kano, 2018 ), few empirical studies have addressed this. Future studies can examine channels through which knowledge travels in a GVC in multiple directions, and specific behaviors in various parts of the network that aid or constrain these processes. Finally, the concept of organizational unlearning – getting rid of obsolete knowledge or routines – points to another promising research area that has been neglected. Given the rapid technological and environmental changes, knowledge possessed by members of a GVC has to be regularly updated. Organizational routines that used to be cost-saving may no longer be so. The extent to that GVC members individually or collectively can replace such outdated knowledge or routines partly determines the GVC’s performance or even long-term survival. Since unlearning at the organizational level and the individual level are intricately connected (Tsang & Zahra, 2008 ), attention to microfoundations of individual behavior, as suggested above, can help advance this research agenda.

Impact of lead firm ownership and strategy on GVC governance

Several studies in our sample analyze the impact of lead firm features, such as size, industry, location, and capabilities, on GVC governance. However, few studies (with the exception of, e.g., Morris & Staritz, 2014 ) examined the impact of ownership, meaning potential differences among GVCs led by private, public, state-owned, and family-owned MNEs. Of particular interest here is behavior of firms whose international strategy may be driven by non-economic objectives, such as state-owned enterprises (SOEs), government-linked corporations (GLCs) and family firms. The social and political goals of SOEs and GLCs may conflict with efficiency considerations (Grøgaard, Rygh, & Benito, 2019 ; Rugman, 1983 ), and may drive idiosyncratic GVC configurations. These idiosyncrasies may be enhanced by lead firms’ unique relationships with key macro-level actors, such as the state, regional and local institutions, and trade unions, and their comparatively greater ability to influence economic policies that govern international investment. For example, political transformation in developing countries can enable the strategic coupling of national economic actors, such as SOEs, GLCs and even sovereign wealth funds, with lead firms in different historical periods. Yeung’s ( 2016 ) comparative study details the politics of state transformation in South Korea, Taiwan, and Singapore since the 1990s and explains how this transformation has led to a strategic coupling shift of the development process from SOE-led industrialization to an assemblage of state-firm-global production networks in which SOEs and GLCs work closely with lead MNEs in a variety of industries, such as personal computers, semiconductors, automotive, ship building, and passenger aviation.

Similarly, family-owned MNEs’ international strategy may be driven by non-economic objectives of the controlling family, such as keeping the firm in the family, providing jobs for future generations, cultivating connections with “chosen” stakeholders, and building a reputation in the community (Miller, Wright, Le Breton-Miller & Scholes, 2015 ). The prevalence of these non-economic preferences gives rise to a dysfunctional governance feature that family firm scholars termed “bifurcation bias”: an affect-based decision rule, whereby family-based assets and capabilities are given de facto preferential treatment over non-family ones (Kano & Verbeke, 2018 ). In the context of GVC governance, bifurcation bias can impact, inter alia , location and control decisions and network composition. Lead family firms may be more likely to seek to protect family-based assets through internalization, and to ascribe a commodity status to non-family assets and govern those assets through contractual modes, regardless of their actual value and contribution to the GVC. Location decisions in bifurcation-biased family firms are also likely to be subject to affect logic; for example, a desire to create jobs for the local community may drive domestic production even when more efficient options exist. This decision dynamic was evident in the well-known case of the iconic Danish toy manufacturer LEGO, where the family’s excessive loyalty to its home community of Billund, Denmark, prevented it from achieving efficiency through offshoring (Bennedsen & Foss, 2015 ). The choice of network partners may also be unique in family firm-led GVCs, since family firms display a strong preference toward partnerships with “kin-controlled” suppliers (Memili, Chrisman, & Chua, 2011 : 53). These, and other idiosyncratic features of GVCs led by firms with alterative ownership, can be investigated in future studies.

The impact of the lead firm’s international strategy can also be explored further. No studies in our sample have addressed this relationship. However, we assume that the lead firm’s international strategy (defined according to, e.g., Bartlett and Ghoshal’s ( 1989 ) integration/responsiveness framework, Ghemawat’s ( 2003 ) aggregation/adaptation/arbitrage framework, or Verbeke’s ( 2013 ) administrative heritage framework) will influence structural and strategic governance of the GVC, particularly because organizing operations through the GVC is meant to aid the lead MNE in achieving the ultimate balance between integration and responsiveness (Buckley, 2014 ).

Temporal factors and dynamics of GVC arrangements

Temporal considerations, such as assignment duration and timing of changes in governance modes, have received limited attention in GVC studies to date, likely because they are typically subsumed within control and/or location decisions (Buckley et al., 2019 ). Only two studies in our sample (Brancati et al., 2017 ; Havice & Campling, 2017 ) examined temporal factors in a targeted manner. However, time considerations represent a key parameter of GVC governance, particularly because modern GVCs thrive on flexibility and adaptability of their governance structures. We propose that future IB studies focus on such temporal elements as optimal assignment duration for economic activities, flexibility/stability trade-offs, and associated knowledge accumulation and learning. Analyzing temporal dynamics of the GVC will likely shed light on the issue of backsourcing, inshoring, and reshoring (Bailey & De Propris, 2014 ; Kinkel, Rieder, Horvath, & Jäger, 2016 ; Vanchan, Mulhall, & Bryson, 2018 ), which also is not sufficiently addressed in extant research.

Value creation, capture, and distribution in a GVC

Despite significant scholarly attention to the issue of value in a GVC, the question of how lead firms should coordinate value creation, capture and distribution is as of yet unresolved. Here, interdisciplinary differences in approach are particularly evident. IB scholars tend to focus on lead firms as key actors responsible for value orchestration in a GVC, viewing these firms as residual claimants of the network’s value proposition (Kano, 2018 ). Social science-based GVC scholars consider more closely contestation over value creation and distribution among lead firms and their partners, and approach value distribution from the perspective of various forms of power asymmetries between the lead firm and suppliers (Dallas et al., 2019 ; Strange & Humphrey, 2019 ). Both approaches present conceptual and empirical challenges. First, the empirical reality is that lead firms cannot accurately account for where value is created in the GVC (Seppälä et al., 2014 ), which complicates their role as value distributors. Second, formal and informal connections and arrangements in modern GVCs continually change in response to economic, political, and technological processes (Benito, Petersen, & Welch, 2019 ); this dynamism impacts both power relationships in a GVC and loci of value creation. Future studies can fruitfully combine IB and social science approaches to further investigate value creation and distribution in a GVC (Benito et al., 2019 ).

Finance and financialization in MNEs’ participation and coordination of GVCs

Overall, we know little about how financial considerations affect MNE strategies, management of GVCs, and competitive outcomes. Earlier studies by Milberg ( 2008 ) and Milberg and Winkler ( 2013 ) examined how financial considerations (e.g., share prices) shaped GVC configurations. From being a relatively obscure factor in the early GCC literature during the 1990s, finance has come to the forefront of accounting for the evolutionary dynamics of lead MNEs and their GPNs in the 2010s. Coe and Yeung ( 2015 ) argue that the pressures and opportunities associated with financial market considerations have compelled lead MNEs to further develop and expand their international operations. MNEs' responses to financial dynamics produce different geographical and organizational configurations of networks. Lead firms, such as certain American MNEs, that succeed in meeting the demands of financial discipline through globalizing production, tend to perform well in the financial market in terms of stock price and executive rewards. This prompts further strategic shift toward a greater emphasis on finance-driven approach to corporate growth and governance in lead MNEs.

GVC impact on macro-environment

Extant research has long acknowledged that GVCs are embedded in, and co-evolve with, political, socio-economic and environmental systems (Alford & Phillips, 2018 ; Santana, Vaccaro, & Wood, 2009 ; Smith, 2015 ; Whittaker, Zhu, Sturgeon, Tsai, & Okita; 2010 ; Yeung, 2016 ). GVCs thus have a continued impact on these complex systems, both positive and negative, intended and unintended. These impacts are well documented. On the positive side, they include economic upgrading, namely income and employment growth and skill development in domestic firms. GVCs’ negative impacts on host communities have attracted even more attention, and include increasing inequality, deteriorating labor standards, environmental damage (Kolk, 2016 ; Kolk, Rivera-Santos, & Rufin, 2018 ), and, in extreme cases, large-scale crises such as the Rana Plaza disaster in Bangladesh. Lead MNEs’ efforts to address these impacts by enforcing strict labor standards throughout the chain and implementing partial re-internalization are not unambiguously helpful for host communities. These initiatives limit local enterprise growth and reduce employment prospects among the most vulnerable population, and thereby attenuate some of the above-mentioned positive effects of GVCs on local economies (Narula, 2019 ). Today, in the era of the rise of political populism, renewed protectionism and the growing skepticism toward globalization, the question of whether GVCs are paragons or parasites is hotly debated in the academe, in the business community, and among the general public.

It is therefore surprising that few studies in our sample directly address the impact of GVCs on various facets of their macro-environment (although many more papers in the social science literature have addressed this issue). The reason may be that operationalizing and measuring social, economic and environmental impact is a challenging task and a rapidly moving target, even if we put aside the problem of data availability. Nevertheless, studying GVC impacts on relevant societies is an important direction of inquiry, which presents one of the “grand challenges” of IB research. To make such research actionable, IB scholars are encouraged to “expand the firm-centric lens” (Gereffi, 2019 : 195) so as to incorporate broader views on international development. Engagement with policymakers and researchers from adjacent fields such as international economics can facilitate linkages between firm-level and macro-level perspectives and help IB researchers translate their findings into policy and development implications.

While host country institutional environments were factored into many investigations, few studies (e.g., Fuller & Phelps, 2018 ) examined feedback effects from GVC governance on host, home, and international institutions. Such impacts (e.g., improvement to legal frameworks, changes to local business institutions, development and enforcement of industry standards, changes to regulations to implement protectionist measures or to promote liberalization) present another interesting area for future research.

The impact of renewed protectionism

Protectionism, as expressed in governments’ measures to discriminate against foreign commercial interests through trade policies, is not a new phenomenon, and has been observed over the years through periods of crises and economic downturns (Evenett, 2019 ). Yet, the issue of protectionism is gaining renewed relevance today, especially in light of Brexit, President Trump’s foreign policies, and associated trade tensions and the wide-spread backlash against globalization. These developments naturally create risks for GVCs, particularly in regards to manufacturing activities offshored to low-cost countries. Lead firms may respond by reconfiguring their value chains and/or reshoring/repatriating production to home countries (Bailey & De Propris, 2014 ; Vanchan et al., 2018 ). While renewed protectionism certainly impacts GVC configurations and governance, the nature and extent of this impact is not yet clear. First, reshoring occurs for a number of reasons, including rising labor and transportation costs, currency fluctuations, technological developments, and strategic considerations (Ancarani et al., 2019 ; Vanchan et al., 2018 ). Second, reshoring, even in the face of, for example, US-China trade war, is difficult and may prove inefficient. Access to specialized skills, infrastructure, and large-scale manufacturing facilities presents serious barriers to reshoring. Repatriation of assembly and production of commodity components from China to high-cost home countries may be next to impossible, as no developed country can presently match China’s combination of scale, skill, infrastructure, and cost ( Economist , 2018 ). The impact of renewed protectionism is not directly addressed in our sample, likely because it will take some time to materialize, and the patterns and outcomes of GVCs’ responses are still in a state of flux. Further, available data on the impact of protectionism are presently limited (Evenett, 2019 ). That being said, the potential impact of various expressions of the renewed protectionism, such as Brexit and Trumpism, on GVC governance is a major avenue for future research, with significant implications for academics, practitioners, and regulators.

GVCs and digitization

Extant studies have addressed the impact of new technologies on GVC configurations (Laplume et al., 2016 ), however, future studies can answer the broader question of how digital technologies have transformed the basic governance structure of GVCs (Foster & Graham, 2017 ; Foster et al., 2018 ; Wu & Gereffi, 2019 ). Digital technology-enabled “platformization,” or “the shift from individual products or services to platforms as the basis for offering value” (Nambisan, Zahra, & Luo, 2019 : 1465), has considerable implications for GVCs, but these impacts are complex. On the one hand, platform MNEs facilitate connectedness among different groups of actors around the world in fundamentally new ways (Coviello et al., 2017 ; Stallkamp & Schotter, 2019 ). Digital platforms and associated ecosystems offer new venues for multifaceted innovation and value creation, and for transferring value across borders with added efficiency and flexibility. Digitization also allows MNEs to quickly change their business models by adding or subtracting network units, adjusting multi-sided platforms, or modifying existing links and interactions (Nambisan et al., 2019 ). For suppliers based in technologically advanced emerging economies such as China, digitization reduces barriers to upgrading and diversification and facilitates access to end consumers (Li, Frederick, & Gereffi, 2019 ). On the other hand, increasing digitization may put at a disadvantage or even exclude GVC actors located away from innovation hubs. Platforms and ecosystems provide young and small firms with access to infrastructure and opportunities to quickly reach geographically dispersed customers (Nambisan et al., 2019 ), yet they also prompt increasing standardization of inputs, which makes suppliers, especially SMEs, more interchangeable and consequently vulnerable. Lead MNE’s orchestration task in a digital environment is more challenging, as lead firms must coordinate, recombine resources, and establish cooperative relationships with actors that are loosely connected and may be situated far beyond the traditional boundary of the lead firm’s industry and beyond the scope of its expertise (Li, Chen, Yi, Mao, & Liao, 2019 ). Further, the growing importance of big data and data analytics led to the emergence of an entirely new form of value chain: a “data value chain” evolving around a firm that manages world-wide acquisition, storage/warehousing, modeling, analysis, and production of insights from data (UNCTAD, 2019 ). This type of value chain represents a fundamentally new business model, presently little understood by IB scholars.

The phenomenon of platformization presents a number of novel and fascinating research opportunities. A platform MNE can be seen as a global virtual value chain, with the lead MNE possessing critical technology, and with the flows of inputs and outputs being mostly intangible. Specific research questions to be explored include, inter alia , power dynamics in digital value chains, business model innovation enabled by platformization, monetization of raw data and ownership of value-added data, integration of digital and brick-and-mortar scenarios within the same network, the impact of home country Internet regulations on GVC governance (Wu & Gereffi, 2019 ), specialization versus standardization, integration versus responsiveness, consumer involvement in digital GVCs, e-commerce-enabled supplier upgrading (Li et al., 2019a , b ), relational governance in a digital environment, and building trust in the global virtual teams in a GVC (Foster et al., 2018 ; Jarvenpaa & Leidner, 1999 ). As technology continues to advance, future studies can investigate potential impacts of artificial intelligence, internet of things, and virtual reality on both traditional and digital GVCs (UNCTAD, 2019 ).

GVCs performance measurement

As discussed above, GVC-level performance measurement is a challenging task, due to the tremendous complexity of the fine-sliced, multi-layered, geographically dispersed network as well as the multiple and potentially diverging objectives of its members. We proposed here that sustainability of the GVC over time served as an indication of governance efficiency and could, therefore, be seen as the ultimate GVC performance outcome. Future research can elaborate on this measure, and propose other ways in which lead firms in GVCs can assess network performance.

To date, scholars from a range of disciplines have accumulated an impressive body of research on GVCs, yet this work is presently characterized by a number of knowledge gaps and a lack of a unifying theory. These gaps present exciting opportunities for GVC researchers, and we hope that our review may contribute to an integrative GVC research agenda. We have suggested a comparative institutional framework for GVC analysis, and identified a number of under-researched issues at micro, GVC, and macro levels, which we would like to further synthesize into what we see as three interrelated “grand challenges” of GVC research in IB. At the micro-level, we need to pay greater attention to individual behavior and motivations, and ways in which these individual characteristics play out as MNEs expand their value chains across geographies and product markets. At the GVC level, we need to engage in rigorous GVC mapping, by specifying relationships among all critical elements of structural and strategic governance of the GVC. At the macro-level, we need to investigate carefully and objectively the intermingling of GVCs and new technologies, and the complex impacts of GVCs on their surrounding societies and the natural environment. The latter point is particularly relevant in the present political climate. With critics of globalization increasingly – and irrationally – blaming GVCs (and, more generally, MNEs) for the demise of public goods and “the rise of global public bads” (Verbeke et al., 2018 : 1102), it becomes the social responsibility of GVC researchers to paint an accurate picture of GVCs that demonstrates the fundamental and non-reversible interconnectedness of today’s global economy.

We would like to conclude by suggesting that this task is best accomplished through interdisciplinary research. Our review showed that each discipline can contribute unique and useful angles, both theoretically and methodologically. In terms of achieving research objectives outlined above, sociology scholars can contribute their expertise in individual-level variables and network-level analysis; economic geographers can enrich the discussion through their superior command of location data, geographical scales of network configurations, and uneven development outcomes; organizational behavior researchers can enhance our understanding of the psychological aspects of managerial decision making and strategy formulation and execution, and IB scholars can bring to the table theoretical rigor and sophisticated treatment of MNEs and their cross-border networks. We advocate that scholars from different disciplines should communicate, collaborate, and gain from this cross-pollination of ideas, and we look forward to seeing more cross-disciplinary GVC research.

Gereffi ( 1999 ; also reproduced in 2018 : Chapter 3), for example, applied his buyer- and producer-driven commodity chains framework to analyze empirically the industrial upgrading pathways of East Asian firms and economies in the global apparel commodity chains led by US buyers. Similar to Hobday’s ( 1995 : Chapter 3) earlier work examining East Asian electronics firms, he identified four types of upgrading trajectories in the form of apparel exports based on basic assembly, OEM, OBM, and ODM roles, and introduced them into the GVC literature. Gereffi ( 1999 ) also highlighted the importance of organizational learning as a mechanism for achieving industrial upgrading in GCCs.

Bounded rationality implies that economic actors’ behavior is “intendedly rational, but only limitedly so” (Simon, 1961 : xxiv). Bounded reliability explains failure of economic actors to make good on open-ended promises, irrespective of intent (Kano & Verbeke, 2018 ). It is an extension of the narrower construct of opportunism – a central behavioral assumption in the Williamsonian version of transaction cost economics, defined as “self-interest seeking with guile” (Williamson, 1981 : 1545).

Hereafter, we refer to this latter group of journals as “social science journals.” We realize that management research also falls under the social sciences umbrella, however, we make a distinction between management journals and other social science journals for simplicity.

Due to the significant volume of work dedicated to examining knowledge management in a GVC, we analyzed it as a separate aspect of GVC strategic governance (see the section on learning above).

(Papers included in the review are marked with an asterisk.)

Aichele, R., & Heiland, I. 2018. Where is the value added? Trade liberalization and production networks. Journal of International Economics, 115: 130–144.

Google Scholar  

*Akkermans, H., Bogerd, P., & Vos, B. 1999. Virtuous and vicious cycles on the road towards international supply chain management. International Journal of Operations & Production Management, 19(5/6): 565–582.

Alford, M., & Phillips, N. 2018. The political economy of state governance in global production networks: Change, crisis and contestation in the South African fruit sector. Review of International Political Economy, 25(1): 98–121.

*Amendolagine, V., Presbitero, A. F., Rabellotti, R., & Sanfilippo, M. 2019. Local sourcing in developing countries: The role of foreign direct investments and global value chains. World Development, 113: 73–88.

*Ancarani, A., Di Mauro, C., & Mascali, F. 2019. Backshoring strategy and the adoption of Industry 4.0: Evidence from Europe. Journal of World Business, 54(4): 360–371.

Antràs, P., & Chor, D. 2013. Organizing the global value chain. Econometrica, 81(6): 2127–2204.

*Ascani, A., Crescenzi, R., & Iammarino, S. 2016. Economic institutions and the location strategies of European multinationals in their geographic neighborhood. Economic Geography, 92(4): 401–429.

*Asmussen, C. G., Pedersen, T., & Petersen, B. 2007. How do we capture “Global Specialization” when measuring firms’ degree of globalization? Management International Review, 47(6): 791–813.

*Azmeh, S., & Nadvi, K. 2014. Asian firms and the restructuring of global value chains. International Business Review, 23(4): 708–717.

Bacharach, S. B. 1989. Organizational theories: Some criteria for evaluation. Academy of Management Review, 14(4): 496–515.

Bailey, D., & De Propris, L. 2014. Manufacturing reshoring and its limits: The UK automotive case. Cambridge Journal of Regions, Economy and Society, 7(3): 379–395.

Bair, J. (Ed.). 2009. Frontiers of commodity chain research . Stanford, CA: Stanford University Press.

*Barrientos, S., Knorringa, P., Evers, B., Visser, M., & Opondo, M. 2016. Shifting regional dynamics of global value chains: Implications for economic and social upgrading in African horticulture. Environment and Planning A, 48(7): 1266–1283.

Bartlett, C. A., & Ghoshal, S. 1989. Managing across borders: The transnational solution . Boston, MA: Harvard Business Press.

Benito, G. R., Petersen, B., & Welch, L. S. 2019. The global value chain and internalization theory. Journal of International Business Studies, 50(8): 1414–1423.

Bennedsen, M., & Foss, N. 2015. Family assets and liabilities in the innovation process. California Management Review, 58(1): 65–81.

*Benstead, A. V., Hendry, L. C., & Stevenson, M. 2018. Horizontal collaboration in response to modern slavery legislation: An action research project. International Journal of Operations & Production Management, 38(12): 2286–2312.

Bhaskar, R. 1998. The possibility of naturalism: A philosophical critique of the contemporary human sciences (3rd ed.) London: Routledge.

Blažek, J. 2015. Towards a typology of repositioning strategies of GVC/GPN suppliers: The case of functional upgrading and downgrading. Journal of Economic Geography, 16(4): 849–869.

*Brancati, E., Brancati, R., & Maresca, A. 2017. Global value chains, innovation and performance: Firm-level evidence from the Great Recession. Journal of Economic Geography, 17(5): 1039–1073.

*Brown, E., Derudder, B., Parnreiter, C., Pelupessy, W., Taylor, P. J., & Witlox, F. 2010. World city networks and global commodity chains: Towards a world-systems’ integration. Global Networks, 10(1): 12–34.

*Buckley, P. J. 2009a. Internalisation thinking: From the multinational enterprise to the global factory. International Business Review, 18(3): 224–235.

*Buckley, P. J. 2009b. The impact of the global factory on economic development. Journal of World Business, 44(2): 131–143.

*Buckley, P. J. 2011. International integration and coordination in the global factory. Management International Review, 51(2): 269–283.

Buckley, P. J. 2014. Forty years of internalization theory and the multinational enterprise. Multinational Business Review, 22(3): 227–245.

Buckley, P. J., & Casson, M. C. 1976. The future of the multinational enterprise . London: Macmillan.

Buckley, P. J., Craig, T. D., & Mudambi, R. 2019. Time to learn? Assignment duration in global value chain organization. Journal of Business Research, 103: 508–518.

*Buckley, P. J., & Tian, X. 2017. Transnationality and financial performance in the era of the global factory. Management International Review, 57(4): 501–528.

Bunge, M. 1997. Mechanism and explanation. Philosophy of the Social Sciences, 27(4): 410–465.

Cano-Kollmann, M., Cantwell, J., Hannigan, T. J., Mudambi, R., & Song, J. 2016. Knowledge connectivity: An agenda for innovation research in international business. Journal of International Business Studies, 47(3): 255–262.

Capaldo, A. 2007. Network structure and innovation: The leveraging of a dual network as a distinctive relational capability. Strategic Management Journal, 28(6): 585–608.

*Carnovale, S., & Yeniyurt, S. 2014. The role of ego networks in manufacturing joint venture formations. Journal of Supply Chain Management, 50(2): 1–17.

*Casson, M. 2013. Economic analysis of international supply chains: An internalization perspective. Journal of Supply Chain Management, 49(2): 8–13.

Cattaneo, O., Gereffi, G., & Staritz, C. 2010. Global value chains in a postcrisis world: Resilience, consolidation, and shifting end markets. In O. Cattaneo, G. Gereffi, & C. Staritz (Eds.), Global value chains in a postcrisis world: A development perspective (pp. 3–20). Washington, D.C.: World Bank.

*Chen, T. J. 2003. Network resources for internationalization: The case of Taiwan’s electronics firms. Journal of Management Studies, 40(5): 1107–1130.

*Chen, D., Wei, W., Hu, D., & Muralidharan, E. 2016. Survival strategy of OEM companies: A case study of the Chinese toy industry. International Journal of Operations & Production Management, 36(9): 1065–1088.

*Chiarvesio, M., & Di Maria, E. 2009. Internationalization of supply networks inside and outside clusters. International Journal of Operations & Production Management, 29(11): 1186–1207.

*Coe, N. M., Hess, M., Yeung, H. W. C., Dicken, P., & Henderson, J. 2004. “Globalizing” regional development: A global production networks perspective. Transactions of the Institute of British Geographers, 29(4): 468–484.

Coe, N. M., & Yeung, H. W. C. 2015. Global production networks: Theorizing economic development in an interconnected world . Oxford: Oxford University Press.

Coe, N. M., & Yeung, H. W. C. 2019. Global production networks: Mapping recent conceptual developments. Journal of Economic Geography, 19(4): 775–801.

*Colotla, I., Shi, Y., & Gregory, M. J. 2003. Operation and performance of international manufacturing networks. International Journal of Operations & Production Management, 23(10): 1184–1206.

*Corredoira, R. A., & McDermott, G. A. 2014. Adaptation, bridging and firm upgrading: How non-market institutions and MNCs facilitate knowledge recombination in emerging markets. Journal of International Business Studies, 45(6): 699–722.

Coviello, N., Kano, L., & Liesch, P. W. 2017. Adapting the Uppsala model to a modern world: Macro-context and microfoundations. Journal of International Business Studies, 48(9): 1151–1164.

Curran, L., Nadvi, K., & Campling, L. 2019. The influence of tariff regimes on global production networks (GPNs). Journal of Economic Geography, 19(4): 873–895.

*Dallas, M. P. 2015. “Governed” trade: Global value chains, firms, and the heterogeneity of trade in an era of fragmented production. Review of International Political Economy, 22(5): 875–909.

Dallas, M. P., Ponte, S., & Sturgeon, T. J. 2019. Power in global value chains. Review of International Political Economy, 26(4): 666–694.

Dawley, S., MacKinnon, D., & Pollock, R. 2019. Creating strategic couplings in global production networks: Regional institutions and lead firm investment in the Humber region, UK. Journal of Economic Geography, 19(4): 853–872.

Denicolai, S., Strange, R., & Zucchella, A. 2015. The dynamics of the outsourcing relationship. In R. Van Tulder, A. Verbeke, & R. Drogendijk (Eds.), Progress in international business research (Vol. 10, pp. 341–364). Bingley: Emerald Group.

Dhanaraj, C., & Parkhe, A. 2006. Orchestrating innovation networks. Academy of Management Review, 31(3): 659–669.

Dicken, P. 2015. Global shift: Mapping the changing contours of the world economy (7th ed.). London: Sage Publications.

*Dicken, P., Kelly, P., Olds, K., & Yeung, H. W. C. 2001. Chains and networks, territories and scales: Towards an analytical framework for the global economy. Global Networks, 1(2): 89–112.

Dunning, J. H. 1988. The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies, 19(1): 1–31.

Dussel Peters, E. 2008. GCCs and development: A conceptual and empirical review. Competition and Change, 12(1): 11–27.

Economist . 2018. China’s grip on electronics manufacturing will be hard to break . Retrieved September 5, 2019, from https://www.economist.com/business/2018/10/11/chinas-grip-on-electronics-manufacturing-will-be-hard-to-break .

Elms, D. K., & Low, P. (Eds.). 2013. Global value chains in a changing world . Geneva: World Trade Organization.

*Enderwick, P. 2018. The scope of corporate social responsibility in networked multinational enterprises. International Business Review, 27(2): 410–417.

*Eng, T. Y., & Spickett-Jones, J. G. 2009. An investigation of marketing capabilities and upgrading performance of manufacturers in mainland China and Hong Kong. Journal of World Business, 44(4): 463–475.

*Eriksson, T., Nummela, N., & Saarenketo, S. 2014. Dynamic capability in a small global factory. International Business Review, 23(1): 169–180.

Ernst, D., & Kim, L. 2002. Global production networks, knowledge diffusion, and local capability formation. Research Policy, 31(8): 1417–1429.

Escaith, H. 2014. Mapping global value chains and measuring trade and tasks. In B. Ferrani & D. Hummels (Eds.), Asia and global production networks: Implications for trade, incomes and economic vulnerability (pp. 287–337). Cheltenham: Edward Elgar.

Evenett, S. J. 2019. Protectionism, state discrimination, and international business since the onset of the Global Financial Crisis. Journal of International Business Policy, 2(1): 9–36.

*Ferdows, K., Vereecke, A., & De Meyer, A. 2016. Delayering the global production network into congruent subnetworks. Journal of Operations Management, 41(1): 63–74.

Foster, C., & Graham, M. 2017. Reconsidering the role of the digital in global production networks. Global Networks, 17(1): 68–88.

*Foster, C., Graham, M., Mann, L., Waema, T., & Friederici, N. 2018. Digital control in value chains: Challenges of connectivity for East African firms. Economic Geography, 94(1): 68–86.

*Fuller, C., & Phelps, N. A. 2018. Revisiting the multinational enterprise in global production networks. Journal of Economic Geography, 18(1): 139–161.

*Funk, C. A., Arthurs, J. D., Treviño, L. J., & Joireman, J. 2010. Consumer animosity in the global value chain: The effect of international production shifts on willingness to purchase hybrid products. Journal of International Business Studies, 41(4): 639–651.

Gereffi, G. 1994. The organization of buyer-driven global commodity chains: How U.S. retailers shape overseas production networks. In G. Gereffi & M. Korzeniewicz (Eds.), Commodity chains and global capitalism (pp. 95–122). Westport, CT: Praeger.

Gereffi, G. 1999. International trade and industrial upgrading in the apparel commodity chain. Journal of International Economics, 48(1): 37–70.

Gereffi, G. 2018. Global value chains and development: Redefining the contours of 21st century capitalism . Cambridge: Cambridge University Press.

Gereffi, G. 2019. Global value chains and international development policy: Bringing firms, networks and policy-engaged scholarship back in. Journal of International Business Policy, 2(3): 195–210.

Gereffi, G., & Fernandez-Stark, K. 2010. The offshore services value chain: Developing countries and the crisis. In O. Cattaneo, G. Gereffi, & C. Staritz (Eds.), Global value chains in a postcrisis world: A development perspective (pp. 335–372). Washington, D. C.: World Bank.

Gereffi, G., Humphrey, J., Kaplinsky, R., & Sturgeon, T. J. 2001. Introduction: Globalisation, value chains and development. IDS Bulletin, 32(3): 1–8.

*Gereffi, G., Humphrey, J., & Sturgeon, T. 2005. The governance of global value chains. Review of International Political Economy, 12(1): 78–104.

Gereffi, G., & Korzeniewicz, M. (Eds.). 1994. Commodity chains and global capitalism . Westport, CT: Praeger.

Gereffi, G., Korzeniewicz, M., & Korzeniewicz, R. P. 1994. Introduction: Global commodity chains. In G. Gereffi & M. Korzeniewicz (Eds.), Commodity chains and global capitalism (pp. 1–14). Westport, CT: Praeger.

*Gereffi, G., & Lee, J. 2012. Why the world suddenly cares about global supply chains. Journal of Supply Chain Management, 48(3): 24–32.

Ghemawat, P. 2003. The forgotten strategy. Harvard Business Review, 81(11): 76–84.

Gibbon, P., & Ponte, S. 2008. Global value chains: From governance to governmentality? Economy and Society, 37(3): 365–392.

*Golini, R., Deflorin, P., & Scherrer, M. 2016. Exploiting the potential of manufacturing network embeddedness: An OM perspective. International Journal of Operations & Production Management, 36(12): 1741–1768.

*Golini, R., & Gualandris, J. 2018. An empirical examination of the relationship between globalization, integration and sustainable innovation within manufacturing networks. International Journal of Operations & Production Management, 38(3): 874–894.

*Gooris, J., & Peeters, C. 2016. Fragmenting global business processes: A protection for proprietary information. Journal of International Business Studies, 47(5): 535–562.

Grabs, J., & Ponte, S. 2019. The evolution of power in the global coffee value chain and production network. Journal of Economic Geography, 19(4): 803–828.

*Griffith, D. A., & Myers, M. B. 2005. The performance implications of strategic fit of relational norm governance strategies in global supply chain relationships. Journal of International Business Studies, 36(3): 254–269.

Grøgaard, B., Rygh, A., & Benito, G. R. 2019. Bringing corporate governance into internalization theory: State ownership and foreign entry strategies. Journal of International Business Studies, 50(8): 1310–1337.

Grossman, G. M., & Rossi-Hansberg, E. 2008. Trading tasks: A simple theory of offshoring. American Economic Review, 98(5): 1978–1997.

Hastings, T. 2019. Leveraging Nordic links: South African labour’s role in regulating labour standards in wine global production networks. Journal of Economic Geography, 19(4): 921–942.

*Hatani, F. 2009. The logic of spillover interception: The impact of global supply chains in China. Journal of World Business, 44(2): 158–166.

*Havice, E., & Campling, L. 2017. Where chain governance and environmental governance meet: Interfirm strategies in the canned tuna global value chain. Economic Geography, 93(3): 292–313.

Haworth, N. 2013. Compressed development: Global value chains, multinational enterprises and human resource development in 21st century Asia. Journal of World Business, 48(2): 251–259.

*He, S., Khan, Z., & Shenkar, O. 2018. Subsidiary capability upgrading under emerging market acquirers. Journal of World Business, 53(2): 248–262.

*Henderson, J., Dicken, P., Hess, M., Coe, N., & Yeung, H. W. C. 2002. Global production networks and the analysis of economic development. Review of International Political Economy, 9(3): 436–464.

Hennart, J.-F. 1993. Explaining the swollen middle: Why most transactions are a mix of “market” and “hierarchy”. Organization Science, 4(4): 529–547.

Hennart, J.-F. 1994. The “comparative institutional” theory of the firm: Some implications for corporate strategy. Journal of Management Studies, 31(2): 193–208.

Hennart, J.-F. 2009. Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets. Journal of International Business Studies, 40(9): 1432–1454.

Hess, M. 2017. Global production networks. In D. Richardson (Ed.), The international encyclopedia of geography: People, the earth, environment, and technology (Vol. VI, pp. 3158–3169). Chichester: Wiley.

*Hillemann, J., & Gestrin, M. 2016. The limits of firm-level globalization: Revisiting the FSA/CSA matrix. International Business Review, 25(3): 767–775.

Hobday, M. 1995. Innovation in East Asia . Brighton: Edward Elgar Publishing.

*Horner, R., & Murphy, J. T. 2018. South-North and South-South production networks: Diverging socio-spatial practices of Indian pharmaceutical firms. Global Networks, 18(2): 326–351.

*Humphrey, J., & Schmitz, H. 2002. How does insertion in global value chains affect upgrading in industrial clusters? Regional Studies, 36(9): 1017–1027.

Inkpen, A. C., & Tsang, E. W. K. 2005. Social capital, networks, and knowledge transfer. Academy of Management Review, 30(1): 146–165.

Inkpen, A. C., & Tsang, E. W. K. 2016. Reflections on the 2015 Decade Award – Social capital, networks, and knowledge transfer: An emergent stream of research. Academy of Management Review, 41(4): 573–588.

*Ivarsson, I., & Alvstam, C. G. 2011. Upgrading in global value-chains: A case study of technology-learning among IKEA-suppliers in China and Southeast Asia. Journal of Economic Geography, 11(4): 731–752.

*Jacobides, M. G., & Tae, C. J. 2015. Kingpins, bottlenecks, and value dynamics along a sector. Organization Science, 26(3): 889–907.

Jarvenpaa, S. L., & Leidner, D. E. 1999. Communication and trust in global virtual teams. Organization Science, 10(6): 791–815.

*Jean, R. J. B. 2014. What makes export manufacturers pursue functional upgrading in an emerging market? A study of Chinese technology new ventures. International Business Review, 23(4): 741–749.

Johns, L., & Wellhausen, R. 2016. Under one roof: Supply chains and the protection of foreign investment. American Political Science Review, 110(1): 31–51.

Johnson, R. C., & Noguera, G. 2012. Accounting for intermediates: Production sharing and trade in value added. Journal of International Economics, 86(2): 224–236.

*Kano, L. 2018. Global value chain governance: A relational perspective. Journal of International Business Studies, 49(6): 684–705.

Kano, L., & Verbeke, A. 2018. Family firm internationalization: Heritage assets and the impact of bifurcation bias. Global Strategy Journal, 8(1): 158–183.

Kano, L., & Verbeke, A. 2019. Theories of the multinational firm: A microfoundational perspective. Global Strategy Journal, 9(1): 117–147.

Kaplinsky, R., & Morris, M. 2001. A handbook for value chain research . International Development Research Centre (IDRC). http://asiandrivers.open.ac.uk/documents/Value_chain_Handbook_RKMM_Nov_2001.pdf .

*Karlsson, C. 2003. The development of industrial networks: Challenges to operations management in an extraprise. International Journal of Operations & Production Management, 23(1): 44–61.

*Khan, Z., Lew, Y. K., & Marinova, S. 2019. Exploitative and exploratory innovations in emerging economies: The role of realized absorptive capacity and learning intent. International Business Review, 28(3): 499–512.

*Khan, Z., Lew, Y. K., & Sinkovics, R. R. 2015. International joint ventures as boundary spanners: Technological knowledge transfer in an emerging economy. Global Strategy Journal, 5(1): 48–68.

*Khan, Z., Rao-Nicholson, R., & Tarba, S. Y. 2018. Global networks as a mode of balance for exploratory innovations in a late liberalizing economy. Journal of World Business, 53(3): 392–402.

Kim, I. S., Milner, H. V., Bernauer, T., Osgood, I., Spilker, G., & Tingley, D. 2019. Firms and global value chains: Identifying firms’ multidimensional trade preferences. International Studies Quarterly, 63(1): 153–167.

Kinkel, S., Rieder, B., Horvath, D., & Jäger, A. 2016. Productivity and flexibility advantages of in - house manufacturing and local sourcing – The limits of global value chains? Paper presented at the 42nd Annual Conference of the European International Business Academy, Vienna, Austria.

*Kleibert, J. M. 2016. Global production networks, offshore services and the branch-plant syndrome. Regional Studies, 50(12): 1995–2009.

Kolk, A. 2016. The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1): 23–34.

Kolk, A., Rivera-Santos, M., & Rufín, C. 2018. Multinationals, international business, and poverty: A cross-disciplinary research overview and conceptual framework. Journal of International Business Policy, 1(1–2): 92–115.

*Kumar, V., Bak, O., Guo, R., Shaw, S. L., Colicchia, C., Garza-Reyes, J. A., et al. 2018. An empirical analysis of supply and manufacturing risk and business performance: A Chinese manufacturing supply chain perspective. Supply Chain Management: An International Journal, 23(6): 461–479.

*Kumaraswamy, A., Mudambi, R., Saranga, H., & Tripathy, A. 2012. Catch-up strategies in the Indian auto components industry: Domestic firms’ responses to market liberalization. Journal of International Business Studies, 43(4): 368–395.

*Lampel, J., & Giachetti, C. 2013. International diversification of manufacturing operations: Performance implications and moderating forces. Journal of Operations Management, 31(4): 213–227.

*Laplume, A. O., Petersen, B., & Pearce, J. M. 2016. Global value chains from a 3D printing perspective. Journal of International Business Studies, 47(5): 595–609.

Lee, E., & Yi, K.-M. 2018. Global value chains and inequality with endogenous labour supply. Journal of International Economics, 115: 223–241.

Levy, D. L. 1995. International sourcing and supply chain stability. Journal of International Business Studies, 26(2): 343–360.

*Levy, D. L. 2008. Political contestation in global production networks. Academy of Management Review, 33(4): 943–963.

Li, J., Chen, L., Yi, J., Mao, J., & Liao, J. 2019a. Ecosystem-specific advantages in international digital commerce. Journal of International Business Studies, 50(9): 1448–1463.

Li, F., Frederick, S., & Gereffi, G. 2019b. E-commerce and industrial upgrading in the Chinese apparel value chain. Journal of Contemporary Asia, 49(1): 24–53.

Lieberson, S. 1992. Einstein, Renoir, and Greeley: Some thoughts about evidence in sociology. American Sociological Review, 57(1): 1–15.

*Lipparini, A., Lorenzoni, G., & Ferriani, S. 2014. From core to periphery and back: A study on the deliberate shaping of knowledge flows in interfirm dyads and networks. Strategic Management Journal, 35(4): 578–595.

*Liu, W., & Dicken, P. 2006. Transnational corporations and “obligated embeddedness”: Foreign direct investment in China’s automobile industry. Environment and Planning A, 38(7): 1229–1247.

*Liu, C. L. E., & Zhang, Y. 2014. Learning process and capability formation in cross-border buyer–supplier relationships: A qualitative case study of Taiwanese technological firms. International Business Review, 23(4): 718–730.

*Lojacono, G., Misani, N., & Tallman, S. 2017. Offshoring, local market entry, and the strategic context of cross-border alliances: The impact on the governance mode. International Business Review, 26(3): 435–447.

*Lund-Thomsen, P., & Coe, N. M. 2015. Corporate social responsibility and labour agency: The case of Nike in Pakistan. Journal of Economic Geography, 15(2): 275–296.

*MacCarthy, B. L., Blome, C., Olhager, J., Srai, J. S., & Zhao, X. 2016. Supply chain evolution – Theory, concepts and science. International Journal of Operations & Production Management, 36(12): 1696–1718.

Malesky, E. J., & Mosley, L. 2018. Chains of love? Global production and the firm-level diffusion of labour standards. American Journal of Political Science, 62(3): 712–728.

*McDermott, G. A., & Corredoira, R. A. 2010. Network composition, collaborative ties, and upgrading in emerging-market firms: Lessons from the Argentine autoparts sector. Journal of International Business Studies, 41(2): 308–329.

Memili, E., Chrisman, J. J., & Chua, J. H. 2011. Transaction costs and outsourcing decisions in small- and medium-sized family firms. Family Business Review, 24(1): 47–61.

Milberg, W. 2008. Shifting sources and uses of profits: Sustaining US financialization with global value chains. Economy and Society, 37(3): 420–451.

Milberg, W., & Winkler, D. 2013. Outsourcing economics: Global value chains in capitalist development . Cambridge: Cambridge University Press.

Miller, D., Wright, M., Le Breton-Miller, I., & Scholes, L. 2015. Resources and innovation in family businesses. The Janus-face of socioemotional preferences. California Management Review, 58(1): 20–40.

*Morris, M., & Staritz, C. 2014. Industrialization trajectories in Madagascar’s export apparel industry: Ownership, embeddedness, markets, and upgrading. World Development, 56: 243–257.

Mudambi, R. 2007. Offshoring: Economic geography and the multinational firm. Journal of International Business Studies, 38(1): 206–210.

Mudambi, R. 2008. Location, control and innovation in knowledge-intensive industries. Journal of Economic Geography, 8(5): 699–725.

Nambisan, S., Zahra, A., & Luo, Y. 2019. Global platforms and ecosystems: Implications for international business theories. Journal of International Business Studies, 50(9): 1464–1486.

Narula, R. 2019. Enforcing higher labor standards within developing country value chains: Consequences for MNEs and informal actors in a dual economy. Journal of International Business Studies, 50(9): 1622–1635.

*Neilson, J., Pritchard, B., Fold, N., & Dwiartama, A. 2018. Lead firms in the cocoa-chocolate global production network: An assessment of the deductive capabilities of GPN 2.0. Economic Geography, 94(4): 400–424.

*Pavlínek, P. 2018. Global production networks, foreign direct investment, and supplier linkages in the integrated peripheries of the automotive industry. Economic Geography, 94(2): 141–165.

*Pietrobelli, C., & Rabellotti, R. 2011. Global value chains meet innovation systems: Are there learning opportunities for developing countries. World Development, 39: 1261–1269.

*Pipkin, S., & Fuentes, A. 2017. Spurred to upgrade: A review of triggers and consequences of industrial upgrading in the global value chain. World Development, 98: 536–554.

Ponte, S., & Gibbon, P. 2005. Quality standards, conventions and the governance of global value chains. Economy and Society, 34(1): 1–31.

Ponte, S., & Sturgeon, T. 2014. Explaining governance in global value chains: A modular theory-building effort. Review of International Political Economy, 21(1): 195–223.

*Rehnberg, M., & Ponte, S. 2018. From smiling to smirking? 3D printing, upgrading and the restructuring of global value chains. Global Networks, 18(1): 57–80.

Rowley, T. J. 1997. Moving beyond dyadic ties: A network theory of stakeholder influences. Academy of Management Review, 22(4): 887–910.

Rugman, A. M. 1983. The comparative performance of US and European multinational enterprises, 1970-79. Management International Review, 23(2): 4–14.

Rugman, A. M., & D’Cruz, J. 1997. The theory of the flagship firm. European Management Journal, 15(4): 403–412.

Rugman, A. M., & Verbeke, A. 2004. A perspective on regional and global strategies of multinational enterprises. Journal of International Business Studies, 35(1): 3–19.

Sako, M., & Zylberberg, Z. 2019. Supplier strategy in global value chains: Shaping governance and profiting from upgrading. Socio-Economic Review, 17(3): 687–707.

Santana, A., Vaccaro, A., & Wood, D. J. 2009. Ethics and the networked business. Journal of Business Ethics, 90(4): 661–681.

Schmidt, S. L., & Brauer, M. 2006. Strategic governance: How to assess board effectiveness in guiding strategy execution. Corporate Governance: An International Review, 14(1): 13–22.

Schwartz, S. H. 2006. A theory of cultural value orientations: Explication and applications. Comparative Sociology, 5(2): 137–182.

*Seppälä, T., Kenney, M., & Ali-Yrkkö, J. 2014. Global supply chains and transfer pricing: Insights from a case study. Supply Chain Management: An International Journal, 19(4): 445–454.

Simon, H. 1961. Administrative behavior (2nd ed.). New York: Macmillan.

*Sinkovics, N., Choksy, U. S., Sinkovics, R. R., & Mudambi, R. 2019. Knowledge connectivity in an adverse context: Global value chains and Pakistani offshore service providers. Management International Review, 59(1): 131–170.

Smith, A. 2015. The state, institutional frameworks and the dynamics of capital in global production networks. Progress in Human Geography, 39(3): 290–315.

Stallkamp, M., & Schotter, A. 2019. Platforms without borders? The international strategies of digital platform firms. Global Strategy Journal . https://doi.org/10.1002/gsj.1336 .

Article   Google Scholar  

Strange, R., & Humphrey, J. 2019. What lies between market and hierarchy? Insights from internalization theory and global value chain theory. Journal of International Business Studies, 50(8): 1401–1413.

*Strange, R., & Newton, J. 2006. Stephen Hymer and the externalization of production. International Business Review, 15(2): 180–193.

*Sturgeon, T., Van Biesebroeck, J., & Gereffi, G. 2008. Value chains, networks and clusters: Reframing the global automotive industry. Journal of Economic Geography, 8(3): 297–321.

*Suder, G., Liesch, P. W., Inomata, S., Mihailova, I., & Meng, B. 2015. The evolving geography of production hubs and regional value chains across East Asia: Trade in value-added. Journal of World Business, 50(3): 404–416.

*Taplin, I. M., Winterton, J., & Winterton, R. 2003. Understanding labour turnover in a labour-intensive industry: Evidence from the British clothing industry. Journal of Management Studies, 40(4): 1021–1046.

*Taylor, P. J., Derudder, B., Faulconbridge, J., Hoyler, M., & Ni, P. 2014. Advanced producer service firms as strategic networks, global cities as strategic places. Economic Geography, 90(3): 267–291.

*Treiblmaier, H. 2018. The impact of the blockchain on the supply chain: A theory-based research framework and a call for action. Supply Chain Management: An International Journal, 23(6): 545–559.

Tsang, E. W. K. 2006. Behavioral assumptions and theory development: The case of transaction cost economics. Strategic Management Journal, 27(11): 999–1011.

Tsang, E. W. K., & Zahra, S. A. 2008. Organizational unlearning. Human Relations, 61(10): 1435–1462.

*Turkina, E., & Van Assche, A. 2018. Global connectedness and local innovation in industrial clusters. Journal of International Business Studies, 49(6): 706–728.

UNCTAD. 2013. Global value chains and development: Investment and value added trade in the global economy . New York: United Nations.

UNCTAD. 2019. Digital economy report . New York: United Nations.

*van Hoek, R. I. 1999. Postponement and the reconfiguration challenge for food supply chains. Supply Chain Management: An International Journal, 4(1): 18–34.

Vanchan, V., Mulhall, R., & Bryson, J. 2018. Repatriation or reshoring of manufacturing to the US and UK: Dynamics and global production networks or from here to there and back again. Growth and Change, 49(1): 97–121.

Verbeke, A. 2013. International business strategy . Cambridge: Cambridge University Press.

Verbeke, A., Coeurderoy, R., & Matt, T. 2018. The future of international business research on corporate globalization that never was…. Journal of International Business Studies, 49(9): 1102–1112.

Verbeke, A., & Kano, L. 2016. An internalization theory perspective on the global and regional strategies of multinational enterprises. Journal of World Business, 51(1): 83–92.

Verbeke, A., & Kenworthy, T. P. 2008. Multidivisional vs metanational governance of the multinational enterprise. Journal of International Business Studies, 39(6): 940–956.

*Wang, J., Wei, Y., Liu, X., Wang, C., & Lin, H. 2014. Simultaneous impact of the presence of foreign MNEs on indigenous firms’ exports and domestic sales. Management International Review, 54(2): 195–223.

*Werner, M. 2012. Beyond upgrading: Gendered labour and the restructuring of firms in the Dominican Republic. Economic Geography, 88(4): 403–422.

Whittaker, D. H., Zhu, T., Sturgeon, T., Tsai, M. H., & Okita, T. 2010. Compressed development. Studies in Comparative International Development, 45(4): 439–467.

Williamson, O. E. 1981. The modern corporation: Origins, evolution, attributes. Journal of Economic Literature, 19(4): 1537–1568.

Williamson, O. E. 1996. The mechanisms of governance . Oxford: Oxford University Press.

World Bank. 2019. Global value chain development report 2019 . Washington, DC: World Bank.

World Bank. 2020. World development report 2020: Trading for development in the age of global value chains . Washington, DC: World Bank.

Wu, X., & Gereffi, G. 2019. Amazon and Alibaba: Internet governance business models, and internationalization strategies. In R. Van Tulder, A. Verbeke, & L. Piscitello (Eds.), International business in the information and digital age: Progress in international business research (Vol. 13, pp. 327–356). Cheltenham: Edward Elgar.

*Yamin, M. 2011. A commentary on Peter Buckley`s writings on the global factory. Management International Review, 51(2): 285–293.

*Yeung, H. W. C. 2009. Regional development and the competitive dynamics of global production networks. Regional Studies, 43(3): 325–351.

Yeung, H. W. C. 2016. Strategic coupling: East Asian industrial transformation in the new global economy . Ithaca, NY: Cornell University Press.

Yeung, H. W. C. 2018. The logic of production networks. In G. L. Clark, M. P. Feldman, M. S. Gertler, & D. Wójcik (Eds.), The new Oxford handbook of economic geography (pp. 382–406). Oxford: Oxford University Press.

*Yeung, H. W. C., & Coe, N. M. 2015. Toward a dynamic theory of global production networks. Economic Geography, 91(1): 29–58.

Zaheer, A., & Venkatraman, N. 1995. Relational governance as an interorganizational strategy: An empirical test of the role of trust in economic exchange. Strategic Management Journal, 16(5): 373–392.

*Zhang, Y., & Gregory, M. 2011. Managing global network operations along the engineering value chain. International Journal of Operations & Production Management, 31(7): 736–764.

Download references

Acknowledgements

We would like to express our sincere gratitude to Prof. Yadong Luo and three anonymous reviewers for their valuable guidance and support. We thank Haskayne School of Business at the University of Calgary and the National University of Singapore for funding the research for this paper through the Transformative Research Grant and Strategic Grant R109000183646, respectively.

Author information

Authors and affiliations.

Haskayne School of Business, University of Calgary, Calgary, AB, T2N 1N4, Canada

Naveen Jindal School of Management, University of Texas at Dallas, 800 W Campbell Rd., SM43, Richardson, TX, 75080-3021, USA

Eric W. K. Tsang

Department of Geography and GPN@NUS Centre, National University of Singapore, 1 Arts Link, Singapore, 117570, Singapore

Henry Wai-chung Yeung

You can also search for this author in PubMed   Google Scholar

Corresponding author

Correspondence to Liena Kano .

Additional information

Publisher's note.

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Accepted by Yadong Luo, Senior Editor, 29 December 2019. This article has been with the authors for two revisions.

Rights and permissions

This article is published under an open access license. Please check the 'Copyright Information' section either on this page or in the PDF for details of this license and what re-use is permitted. If your intended use exceeds what is permitted by the license or if you are unable to locate the licence and re-use information, please contact the Rights and Permissions team .

About this article

Kano, L., Tsang, E.W.K. & Yeung, H.Wc. Global value chains: A review of the multi-disciplinary literature. J Int Bus Stud 51 , 577–622 (2020). https://doi.org/10.1057/s41267-020-00304-2

Download citation

Received : 31 January 2019

Revised : 01 December 2019

Accepted : 29 December 2019

Published : 25 February 2020

Issue Date : June 2020

DOI : https://doi.org/10.1057/s41267-020-00304-2

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• global value chains
• global production networks
• global commodity chains
• global factory
• comparative institutional analysis

Advertisement

• Find a journal
• Publish with us
• Track your research

Global Value Chains

This paper surveys the recent body of work in economics on the importance of global value chains (GVCs) in shaping international trade flows and multinational activity. On the empirical front, we begin reviewing several variants of the "macro approach" to measuring the relevance of global production sharing in the world economy, and we also offer a critical evaluation of the country- and industry-level datasets (or World Input Output Tables) that have been used to date. We next discuss the advantages and disadvantages of a burgeoning alternative "micro approach" that has instead employed firm-level datasets to document the ways in which firms have sliced up their value chains across countries. On the theoretical front, we propose an analogous dissection of the literature. First, we review a vast body of work developing country- and industry-level quantitative frameworks that are easily calibrated with World Input Output Tables, and that open the door for counterfactual exercises with minimal demands on estimation. Second, we overview micro-level frameworks that have treated firms rather than countries or industries as the relevant unit of analysis, and that have unveiled a number of distinctive mechanisms by which GVCs shape the determinants and consequences of international trade flows in ways distinct from traditional models of international trade. We close this survey with a discussion of a still infant literature on the desirability and effects of trade policy in a world of GVCs.

An abridged version of this paper is to be published as a chapter in the 5th Edition of the Handbook of International Economics. All errors are our own. We thank Emily Blanchard, Alessandro Borin, Lorenzo Caliendo, Rob Feenstra, and Michele Mancini for enlightening email exchanges. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

MARC RIS BibTeΧ

Download Citation Data

More from NBER

In addition to working papers , the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter , the NBER Digest , the Bulletin on Retirement and Disability , the Bulletin on Health , and the Bulletin on Entrepreneurship  — as well as online conference reports , video lectures , and interviews .

• Tools and Resources
• Customer Services
• Conflict Studies
• Development
• Environment
• Foreign Policy
• Human Rights
• International Law
• Organization
• International Relations Theory
• Political Communication
• Political Economy
• Political Geography
• Political Sociology
• Politics and Sexuality and Gender
• Qualitative Political Methodology
• Quantitative Political Methodology
• Security Studies
• Share This Facebook LinkedIn Twitter

Article contents

Global commodity chains and global value chains.

• Joonkoo Lee Joonkoo Lee Department of Sociology, Duke University
• https://doi.org/10.1093/acrefore/9780190846626.013.201
• Published in print: 01 March 2010
• Published online: 22 December 2017

A commodity chain refers to “a network of labor and production processes whose end result is a finished commodity.” The attention given to this concept has quickly translated into an expanding body of global chains literature. Research into global commodity chains (GCC), and later global value chains (GVC), is an endeavor to explain the social and organizational structure of the global economy and its dynamics by examining the commodity chains of a specific product of service. The GCC approach first emerged in the mid-1980s from world-system research and was reformulated in the early 1990s by development scholars. The development-oriented GCC approach turned the focus of GCC analysis to actor-centered processes in the global economy. One of the initial criticisms facing the GCC approach was its exclusive focus on internal conditions and organizational linkages, lacking systemic attention to the effect of domestic institutions and internal capacity on economic development. Other critics pointed to the narrow scope of GCC research. With the huge expansion in global chains literature in the past decade—not only in volume but also in depth and scope—efforts have been made to elaborate the global chains framework and to render it industry neutral, as partly reflected in the adoption of the term “global value chains.” Three key research themes surround these recent evolutions of global chains literature: GVC governance, “upgrading,” and the social construction of global value chains. Existing literature, however, still has theoretical and methodological gaps to redress.

• commodity chains
• global commodity chains
• global value chains
• global economy
• development-oriented GCC
• global chains literature

Introduction

Research into global commodity chains (GCC), and later global value chains (GVC), is an endeavor to explain the social and organizational structure of the global economy and its dynamics by examining the commodity chains of a specific product or service. A commodity chain refers to “a network of labor and production processes whose end result is a finished commodity” (Hopkins and Wallerstein 1986 :159). Since the mid 1990s, the concept has drawn a great deal of attention from scholars and policy makers who have grappled with comprehending the changing global economy. This attention has quickly translated into an expanding body of global chains literature. Of 380 publications listed on the Global Value Chains Initiative website as of November 22, 2008 (see Online Resources), 87 percent have been published since 2000 (see Figure 1 ).

Meanwhile, global chains research has become multidisciplinary as researchers have entered the conversation from various disciplines. These include sociology, economics, geography, regional studies, management studies, and development research, to name a few. Prominent journals have devoted special issues to this emerging field (e.g., International Journal of Technological Learning, Innovation and Development [ 2009 ]; Competition and Change [ 2008 ]; Economy and Society [ 2008 ]; Environment and Planning A [ 2006 ]). Simultaneously, the global chains concept has been adopted by many nonacademic organizations, including the International Labor Organization (e.g., Campbell and Parisotto 1995 ; Gereffi 2006 ) and the United States Agency for International Development (e.g., USAID 2005 ), to address new development challenges in the era of globalization.

Figure 1 Publication of global commodity/value chains literature, 1990–2008

Note : “Books” include edited books, “Book chapters” denote chapters in edited books, “Journal articles” include working papers and reports. As at November 22, 2008 , 380 entries are listed in total.

Global commodity chains research originated in the world-system school (Hopkins and Wallerstein 1986 ) and was later formulated as “a relatively coherent paradigm” (Daviron and Ponte 2005 ) in a collected volume, Commodity Chains and Global Capitalism (Gereffi and Korzeniewicz 1994 ). Around the early 2000s, some GCC scholars began to introduce the GVC concept into their work, citing the conventional association of the term “commodity” with undifferentiated products with low entry barriers. At the same time, the introduction of the new term has caused a series of controversies over the relationship between GCC and GVC concepts that are outlined below (Kaplinsky 2000 ; Bair 2009 ).

Nonetheless, GCC and GVC research is characterized by considerable coherence: the two endeavors share key concepts and research questions. These include: (1) how a global commodity/value chain is organized, and who the most powerful players are driving the chain (“lead firms”); (2) how the way the chain is governed (“governance structure”) affects the distribution of gains across chain participants, that is, countries, firms, and workers in developed and developing countries; and (3) what determines the movement of chain actors from low to high value-added activities (“upgrading”). In methodology, both approaches focus on a firm-level chain analysis with data gathered from fieldwork. These commonalities remain crucial to most GCC/GVC scholars, regardless of what they call their research. Thus, throughout this essay the two terms are used interchangeably, and I use “global chains research” to encompass both strands.

There are several other approaches that have many similarities to global chains literature in theory and methodology. These variants include Michael Porter’s ( 1985 ) “value chain” concept in management studies; the French “filière” tradition (Raikes et al. 2000 ) and the “commodity systems” approach (Friedland 1984 ), both from agricultural studies; and “global production network” (GPN) research (Henderson et al. 2002 ), used mostly by economic geographers. Some researchers are more attuned than others to the difference of their origins and to the peculiar intellectual “baggage” each carries (Henderson et al. 2002 ). Although a comparison might bear some merit, this essay solely focuses on global chains research, leaving that task to others (see Sturgeon 2001 and Henderson et al. 2002 for a comparison of GCC/GVC with GPN; Raikes et al. 2000 with “filière”; Gereffi 1996 and Whitley 1996 with “business systems”; Bair 2008 with the new economic sociology; and Gereffi 2005 with the varieties of capitalism literature).

The rest of the essay is organized as follows. The next section surveys the early development of GCC research through the late 1990s. The contemporary literature of this decade is then reviewed around the following themes: GVC governance, “upgrading,” and the social construction of global chains. This essay concludes with notes on gaps in the existing literature and suggestions for the future direction of global chains research.

Formulation of the Global Commodity Chains Approach

The GCC approach first emerged in the mid 1980s from world-system research and was reformulated in the early 1990s by development scholars. Continuities and discontinuities in this reformulation deserve attention to understand how the questions the scholars attempted to address shifted in this formative period (see Bair 2005 for a review). This section examines the GCC literature up to the late 1990s with a focus on (1) its original conceptualization by world-system scholars, (2) the reformulation by Gereffi and his collaborators, (3) some empirical studies, and (4) initial critiques of the reformulated framework from inside and outside the GCC camp.

While a handful of earlier studies had employed the value chain concept or a similar concept by another name (Kaplinsky 2000 ), the GCC approach proper dates back to Hopkins and Wallerstein’s ( 1986 :159) conceptualization, where commodity chains were defined as “a network of labor and production processes whose end result is a finished commodity.” In their attempt to contest the incrementalist view that capitalism has been gradually globalized since the nineteenth century , these world-system scholars constructed the entire chains of two major commodities in the period from 1590 to 1790 – ships and wheat flour – to show that the production activities of these goods already spanned the globe. The chains constructed consisted of multiple “nodes” (or “boxes”), each of which represented distinct production operations, and “chains” linking them to each other. The chains were traced backward from a finished product (e.g., a ship) up to raw material inputs (e.g., copper and iron ore). While proposing commodity chains as a tool to examine the geographical dispersion of production activities, the scholars also suggested that the concept could be used to identify which firms or countries retained the most profitable nodes within the chain, thus uncovering the uneven distribution of profits among them. They also related the degree of spatial dispersion to long-term cycles of expansion and contraction of the world economy.

This original concept of commodity chains was soon picked up by development scholars (Gereffi and Korzeniewicz 1990 ) and then reformulated in a volume edited by Gereffi and Korzeniewicz ( 1994 ). While the collection includes contributions by world-system scholars (e.g., Hopkins and Wallerstein 1994 ), most of the chapters examine contemporary development challenges in export-oriented industries, such as apparel, automobiles, and footwear. Unlike world-system scholars whose pressing concern was the existence of a “global” economy in early modern capitalism, the development scholars found the commodity chains concept useful to capture emerging patterns of postwar industrialization that they suggested were characterized by the disaggregation and geographical spread of production activities and functional reintegration by transnationals. These scholars collectively address the bearing that these new trends in the global economy have had on prospects for economic development in developing countries.

The question of the contemporary development of developing countries related to a then broad debate on the relationship between industrialization and the mobility of nations in the global economy. A concern had been growing over why the developing countries’ share of total economic surplus did not increase proportionately despite the growth of their industrial output, and why some semiperiphery nations had been more successful in moving up the global economic hierarchy than their similarly industrialized peers (see Martin 1990 ). The GCC scholars found the GCC concept could provide a compelling explanation for these matters, since it allowed for dissecting industrial activities into multiple nodes with differential profits. The world’s economic inequalities, they argued, were associated with “the creation and distribution of global wealth as embodied in a multidimensional, multistage sequence of activities, rather than an outcome of industrialization alone” (Gereffi et al. 1994 :13). Similarly, industrialized countries have differential access to markets and resources that determines who moves up and who is left behind in the hierarchy of the global economy.

Overall, the “development turn” of the GCC concept brought a new focus to the literature (Gereffi et al. 1994 ; Bair 2005 ). First, it explicitly highlighted the unequal distribution of surplus between the core and the periphery. It is suggested that semiperiphery mobility depends on “a country’s ability to upgrade its mix of core–peripheral economic activities” (Gereffi and Korzeniewicz 1990 :54, emphasis added). In other words, the extent to which a country is involved in core-like activities is a better predictor of its success than its overall level of industrialization. Commodity chains are not simply sequences of production, but also a key tool for dissecting interlinked economic activities into multiple nodes and uncovering the disproportionate share of surplus for each. Since every node varies in terms of geographical loci of operations, forms of labor force, technology used, and, eventually, share of economic surplus, a country’s economic viability is associated with the extent to which it is engaged in profitable nodes, not with industrialization per se.

Second, with the “development turn” of the GCC concept came a new focus on competition and innovation. These are proposed to be the key factors that determine which nodes are more or less profitable, or core-like or periphery-like. The more severe the competition is in a particular node, the smaller the share of surplus that generally accrues to the node. By the same token, the more a node is monopolized by a few units, the bigger the share of surplus that goes into them. The profitability of the nodes, however, is hardly static, but is rather subject to technological and organizational innovations. As innovation renders certain nodes less profitable (“peripheralization”), firms or countries are pressured to develop a new competitive edge. In short, the GCC approach suggests that a country’s developmental success generally hinges on the ability to “upgrade” its industrial activities into more profitable and less competitive nodes within global commodity chains against the constant pressure of peripheralization brought by new innovations.

Finally, a now renowned distinction between producer-driven and buyer-driven chains was made to distinguish different types of commodity chains in terms of governance structures and types of lead firms. Gereffi ( 1994 :97) defined governance as “authority and power relationships that determine how financial, material, and human resources are allocated and flow within a chain.” Producer-driven commodity chains (PDCCs) are driven by vertically integrated large industrial enterprises that control the production system through direct ownership or tightly knit production alliances. They characterize capital- and technology-intensive industries (e.g., automobiles, computers, and aircraft manufacturing). In contrast, buyer-driven commodity chains (BDCCs) are governed by lead firms as buyers (e.g., retailers, marketers, and brand manufacturers) that utilize a wide array of independent suppliers, linked to one another through sourcing networks. They are typically found in labor-intensive, consumer goods industries, like garments, footwear, or consumer electronics. The power of lead firms in BDCCs derives not from economies of scale or technological prowess as in PDCCs, but from their competence in such nodes as design, sales, and marketing. Ensuing studies have shown that this distinction sets the stage for the prospect, scope, and path of suppliers’ upgrading.

Gereffi’s studies on the global apparel chain ( 1994 ; 1999 ) exhibit a prime example of development-oriented GCC research in the 1990s. He argued that the success of East Asian producers in the typical starter sector for export-oriented industrialization was largely attributable to their ability to upgrade in the buyer-driven chain, from simple assemblers to original equipment manufacturing (OEM), or full-package, suppliers. And this was enabled by learning from foreign buyers, who became the East Asian producers’ primary sources of not only material inputs but also knowledge transfers.

Some kinds of buyer–supplier chain linkages are more advantageous than others in such organizational learning, Gereffi has suggested. In global apparel chains, for instance, US brand manufacturers (e.g., Levi Strauss) are distinguished from retailers (e.g., JC Penney) and marketers (e.g., Nike) in terms of sourcing strategy. Brand manufacturers generally establish production networks and supply inputs with local producers, which only assemble them into a final product. In contrast, retailers and marketers tend to buy readymade apparel from their OEM suppliers, mostly in Asia. Gereffi suggests this difference matters from the upgrading standpoint, because the types of knowledge transferred from the buyer to the supplier are different. Unlike in the assembly model, where only production-related knowledge flows, the OEM suppliers can learn additionally from the buyers necessary skills in managing input supply as well as marketing and sales, which are critical for upgrading to original brand manufacturing (OBM). And as the suppliers move to serve more demanding buyers in quality and quantity (“organizational succession”), they can further enhance their skills and facilities. Therefore, upgrading significantly relates to “different kinds of buyer–seller links, and distinctive patterns of organizational succession among foreign buyers in exporting nations” (Gereffi 1999 :40).

The upgrading constraints of assembly-based industrialization were confirmed by subsequent GCC research. In a study of consumer electronics chains established by Japanese multinationals in Mexico’s maquiladoras , Kenney and Florida ( 1994 ) found that despite some variation in their insertion into the chains, most local suppliers remained as labor-intensive export platforms. The Japanese firms’ pointed emphasis on cost cutting and Mexico’s lack of new investment in infrastructure and human capital limited the effect of their insertion on their upgrading. Similar challenges are identified in Schmitz’s study of Brazil’s Sinos Valley cluster ( 1995 ; 1999 ). Despite their significantly improved performance in quality, speed, and flexibility, Brazilian footwear suppliers found their exports stagnant and profits dwindling as competition intensified with low-wage Asian producers. Without accessing high-value nodes like design and marketing, Schmitz warned, they would face a so-called immiserizing growth trap; that is, increased industrial activities without sustainable income growth (Kaplinsky 1998 ).

Accessing high-value segments, however, can present a huge challenge to developing country producers, as illustrated in Schurman’s ( 1998 ) study of the global tuna chain. As tuna harvesting became competitive and less profitable in the late 1980s, US and Japanese multinationals divested from the node and concentrated on distribution and retailing, the highest value-adding segments. Consequently, Pacific Island countries’ efforts to build an export-oriented tuna sector by entering the harvesting node of the chain ended up with disappointingly lower gains than anticipated. The lack of their linkages to the lead firms’ tightly woven interfirm networks further inhibited their access to final markets and the know-how necessary to survive, leaving them locked in the most competitive and risky node.

Ultimately, the development-oriented GCC approach turned the focus of GCC analysis to actor-centered processes in the global economy. Unlike world-system scholars, most of these GCC researchers are uninterested in macro-historical processes, such as the long-term cycles of the world economy. Countries and firms are not regarded as static; rather, they are the actors strategically shaping and being shaped by the ongoing restructuring of the global industry. However, their ability to do so is not equal. This highlights power disparities between the actors.

Despite their general lack of interest in the macro-historical questions, these GCC researchers have retained from world-system theory a global perspective. They have maintained their focus on the global division of labor and its functional integration beyond national boundaries, as opposed to the national economy and international trade (Gereffi 1996 ). The carryover was a mixed bag. On the one hand, it has clearly distinguished the GCC approach from the existing, largely state-centric development literature. The brand of GCC scholarship promoted by Gereffi and colleagues has been well received by those in various adjacent fields who have sought, in their own scholarship, a fresh perspective attuned to the deeper integration of the globalized economy (McMichael 1995 ). On the other hand, some world-system scholars criticized the reorientation for having strayed too far from the core aims of the world-system approach and for being too “developmentalist” (Dunaway and Clelland 1995 ), while other critics from outside the world-system camp in fact found the association too strong, and thus problematic (Cramer 1999 ; Raikes et al. 2000 ).

One of the initial criticisms facing the GCC approach was its exclusive focus on external conditions and organizational linkages, lacking systemic attention to the effect of domestic institutions and internal capacity on economic development (Henderson et al. 2002 ). Cramer ( 1999 :1248) has suggested that despite its empirical richness, the GCC approach tends to be “fatalistic” when it comes to analyzing prospects for developmental success, due to its sole emphasis on the structural constraints imposed by core-based multinationals. He cites a Mozambican cashew case in which the most pressing challenge to its exporters were rather domestic political constraints, such as disarrayed state policies often swayed by donor interests.

Other critics pointed to the narrow scope of GCC research. Sector-wise, its empirical cases were mostly limited to a handful of export-driven manufacturing sectors and some primary commodities. The service sector largely escaped its systemic examination; where the service sector occasionally came under its scrutiny, some found its manufacturing-oriented perspective somewhat inadequate (Clancy 1998 ). Furthermore, some critics claimed, among the main dimensions of global commodity chains initially outlined by Gereffi ( 1995 ) – input–output structure, geography, governance structures, and institutions – subsequent work focused heavily on governance structures, and particularly BDCCs. This left the institutional dimension particularly understudied, such as (re)production of labor forces, and the roles of households, the state, and regulatory institutions in commodity chains (Leslie and Reimer 1999 ; Henderson et al. 2002 ; Ponte and Gibbon 2005 ). How global chains research in this decade has addressed these criticisms and elaborated its theoretical framework are the subjects of the sections to follow.

From Global Commodity Chains to Global Value Chains

The past decade has witnessed a huge expansion in global chains literature, not only in volume but also in both depth and scope (see Bair 2005 ; 2009 for reviews). Efforts have been made to elaborate the global chains framework and to render it industry neutral, as partly reflected in the adoption of the term “global value chains” (Humphrey and Schmitz 2002 ; Gereffi et al. 2005 ). As happened in the past, global chains researchers have continued to grapple with new realities in the global economy, such as the proliferation of private regulations and standards (Dolan and Humphrey 2004 ; Ponte and Gibbon 2005 ). Theories from other disciplines, such as transaction cost economics, industrial cluster research, and convention theory, to name but a few, have been introduced to global chains analysis. Global chains research has been adopted by policy makers as well as by those, such as consumer activist groups, who pursue changes in the global economy.

At the same time, some of these developments have highlighted differences among researchers. Concerns have been raised about the theoretical eclecticism of the GVC approach, as the question has arisen of whether the approach constitutes a coherent theoretical framework, or is rather best applied as an analytical tool with little theoretical allegiance (Collins 2005 ; Gibbon et al. 2008 ). The adoption of the term “global value chains” by some researchers has been regarded by other GCC researchers as much more than a matter of nomenclature. Theoretical disagreements have emerged in recent years particularly surrounding the theory of GVC governance. These recent evolutions of global chains literature are traced in the following sections with a focus on three key research themes: GVC governance, upgrading, and the social construction of global value chains.

Governance in Global Value Chains

The concept of governance has been central in global chains research. How a global value chain is governed is regarded as determining market access, acquisition of capabilities, and, eventually, distribution of gains between chain participants (Kaplinsky 2000 ; Gereffi et al. 2001 ; Humphrey and Schmitz 2001 ). In fact, despite liberalization, most of international trade is carried out under production networks governed by a handful of big buyers, mostly from the global North (Dolan and Humphrey 2000 ; Schmitz and Knorringa 2000 ). These lead firms control access to the networks by setting standards for suppliers regarding what is to be produced and how it is to be produced. The control on the part of a handful of large buyers, in turn, creates considerable entry barriers for developing country producers (Humphrey and Schmitz 2001 ).

The distinction between producer- and buyer-driven chains (Gereffi 1994 ; 1999 ) was an early attempt to conceptualize different forms of value chain governance. Despite its timely attention to the rise of buyer-driven chains, the dichotomy was criticized for its simplified and abstract formulation as ensuing studies painted a more complicated picture of chain governance (Clancy 1998 ; Henderson et al. 2002 ). First, researchers were quick to identify different sources of drivenness, particularly outside of the garment and apparel sectors. Alternative governance forms were proposed, including international trader-driven (Gibbon 2001 ), bipolar (Fold 2002 ), technology-driven (O Riain 2004 ), and assembler-driven (Rothstein 2005 ) chains. Second, BDCCs were found to be key players in the sectors formerly characterized as having been dominated by the influence of PDCCs, such as automobiles and electronics. The boundary between manufacturers and buyers has been blurred as the former has increasingly outsourced production activities to independent suppliers (Sturgeon 2009 ). Likewise, some suppliers (“contract manufacturers”) have become capable of providing “turnkey services” to a wide range of buyers using industry-wide specifications. This new type of suppliers has challenged a conventional notion of suppliers as being “captive” to the demands of buyers (Lee and Chen 2000 ; Fold 2002 ; Sturgeon 2002 ). All of these findings have resisted any portrayal of global chains as mono-polar, highlighting instead “the more complicated patterns of power relations between lead firms in global chains” (Fold 2002 :230), or even the presence of multiple governance structures.

A series of efforts has been made to accommodate this complexity and to propose a more generalized framework of chain governance (see Gereffi et al. 2001 ). Gereffi et al. ( 2005 ) is noteworthy among other articles (see also Humphrey and Schmitz 2001 ; 2002 ). They, first, specify five generic types of GVC governance. Each form of governance – market-based, modular, relational, captive, and hierarchical – is defined according to a varying degree of “explicit coordination” between the buyer and the supplier. Drawn from international business literature (Kogut 1985 ), transaction cost economics (Williamson 1985 ), and network theories (Powell 1990 ), this new typology emphasizes that not all network forms are alike. It specifies three different networktypes – modular, relational, and captive (or “quasi-hierarchy”; Humphrey and Schmitz 2002 ) – in between two opposite governance forms – markets (arm’s-length transactions) and hierarchy (vertical integration). Further, this group of theorists hypothesize that what type of governance would arise in a particular linkage depends on a combination of three key determinants: the complexity of interfirm transactions; the codifiability of the transactions; and suppliers’ capability to meet buyers’ requirements.

What these researchers tried to do was to provide a generalized, parsimonious model to identify and explain variations found in GVC governance. This group’s typology of governance categories, and key determinants of governance forms, as they emphasize, is industry neutral relative to the producer- and buyer-driven chains distinction and is, further, comparable to the concepts used in other industrial organization literature (Sturgeon 2009 ). This new formulation also allows for the variance of GVC governance by time and place. By specifying the key determinants of governance forms, the formulation can anticipate a shift from one form of governance to another in the face of changing economic and technological conditions.

An excellent example using this new framework is Dolan and Humphrey’s ( 2004 ; see also Dolan 2004 ) study of fresh vegetables value chains. Until the mid 1980s, the fresh vegetables trade between Kenya and the UK largely depended on market-based governance, with little explicit buyer–supplier coordination. The situation has changed dramatically since then, as UK supermarkets have begun to compete for a year-round offering of quality produce with a greater variety in rotation, and food safety concerns have demanded more control over suppliers’ farming activities. A few lead UK supermarkets have increasingly replaced existing market governance with more explicit coordination with fewer African exporters. In response to the buyers’ complicated requirements, exporters have also more heavily relied on their own farms and on large contract farmers than on smallholders, implying the rise of hierarchical and captive governance between the farmers and the exporters. Using the GVC governance framework, Dolan and Humphrey’s research shows not only the rise of buyer drivenness in the UK–Kenya chain over time, but also how such a shift has led to the divergence of governance in each chain link, a trend that the researchers have called “multiple governance structures.”

The new proposed framework, despite its merit exemplified above, has raised fresh theoretical issues on which debates are underway (Gibbon et al. 2008 ; Bair 2009 ; Sturgeon 2009 ). One of them is how the entire value chain could be characterized if “even in a particular industry in a particular space and time, governance patterns may vary from one stage of the chain to another” (Gereffi et al. 2005 :96). This question relates to the emphasis of the new framework on firm-level transaction coordination – a focus that has particularly invited criticism. Gibbon ( 2008 :38), for example, criticizes this “coordination turn” of the GVC approach for narrowing the conceptual scope of chain governance from the entire chain to the firm-level resolution of coordination problems in a particular chain link. He cautions that “this formulation loses sight of the overall configuration of chains, as opposed to the content of specific links within them,” unless an explanation is provided of “how to move from this level of analysis [link level] to a characterization of the overall pattern of decisions along a chain.”

One proposed resolution has been to distinguish chain coordination at the individual linkages (“forms of coordination”) from the governance of the entire chain (“modes of governance”). The latter refers to defining rules and conditions of chain participation (Ponte and Gibbon 2005 ). Along this line of reasoning and informed by convention theory, one group of scholars has paid attention to how quality standards and normative frameworks legitimizing such standards at a societal level shape the overall rules and conditions of chain participation (Ponte and Gibbon 2005 ; Gibbon and Ponte 2008 ). In an alternative proposal, Sturgeon ( 2009 ) suggests, instead of having an additional conceptual layer, that the governance structure between lead firms and their first-tier suppliers can be viewed as structuring the governance of the whole chain. While each proposal is quite plausible, both raise questions that have yet to be answered. If there is a mode of governance operating at the entire chain level, how does it relate to divergent forms of coordination at each individual link? Likewise, the question remains of how a particular linkage could set the tone of the governance forms of the rest of the chain.

Another major issue is that it is unclear how power is conceptualized in the new framework. Governance was initially defined in terms of “authority and power relationships” surrounding allocation of resources. The distinction between producer- and buyer-driven chains reflects who exerts the power (Gereffi 1994 ). The new framework, however, only focuses on varying degrees of power asymmetry between buyers and suppliers of each governance type, with the asymmetry generally found to be lower in markets and higher in hierarchies. Critics find in the new framework that “power is a contingent property of only certain types of inter-firm coordination” (Gibbon et al. 2008 :323). It is not regarded as being embedded in lead firms’ strategies, but rather as being determined by the technical characteristics of the transactions in which they might be involved, and as being influenced by the three key determinants of the complexity of interfirm transactions; the codifiability of the transactions; and suppliers’ capability to meet buyers’ requirements. Sturgeon ( 2009 :128–30) addresses this criticism by offering a more detailed discussion of power in global value chains, in which he specifies the sources of power differentials between chain actors: purchasing power on the buyer side, platform power and competence power on the supplier side. His discussion, however, is limited to the transaction level, with little hint as to how the proposed framework can address power relations in the entire chain. His approach then, while it addresses and resolves some of the problems with the new formulation, nonetheless fails to speak to the primary matter of chain coordination versus chain governance.

In sum, a new framework of GVC governance has been proposed to tackle the complexity of evolving global industries and to construct a general model with a sophisticated typology of governance forms. While highlighting the dynamics of governance structures within and across value chains, the new framework raises important theoretical questions, which have yet to be fully answered, concerning the level at which GVC governance and power operate.

Upgrading: Achieving Mobility in Global Chains

Global chains research has contributed to shifting the attention of development studies from industrialization per se to industrial upgrading. Upgrading has been defined as “a process of improving the ability of a firm or an economy to move to a more profitable and/or technologically sophisticated capital- and skill-intensive economic niche” (Gereffi 1999 :51–2). Over the past decade, GVC research has further specified the types of upgrading and the circumstances under which a particular type of upgrading is more or less likely to occur. Informed by industrial cluster literature (Pyke et al. 1990 ) and strategic management research (Lee and Chen 2000 ), it has increasingly viewed upgrading as evolutionary rather than linear and unidirectional in nature.

A systemic examination of different forms of upgrading was conducted by Humphrey and Schmitz ( 2002 ). They proposed four types of upgrading: (1) process upgrading : making production processes more efficient by reorganizing the production system and using advanced technology; (2) product upgrading : moving into more sophisticated, or high-value, product lines; (3) functional upgrading : occupying more profitable nodes within a chain; and (4) intersectoral upgrading : moving into a more profitable value chain.

Humphrey and Schmitz’s typology of upgrading forms makes several important contributions to our understanding of the field of GVC research. First, their distinctions clarify different “niches” in which upgrading can take place. The differences they discover are not sufficiently clear in Gereffi’s original definition of upgrading (“move to a more profitable and/or technologically sophisticated capital- and skill-intensive economic niche”); thus, Gereffi’s definition is largely read to refer to functional upgrading. Further, some have critiqued Gereffi’s original definition, arguing that he chose to privilege the particular type of upgrading he describes (e.g., from assembly to OEM to OBM based on the experience of East Asian garment suppliers) as a normative or optimal path over other types (Gibbon and Ponte 2005 :89–90). Second, Humphrey and Schmitz’s new typology allows GVC research to shift the upgrading question from “whether” to “under what conditions?” Insertion into global value chains was claimed as a key first step for upgrading (Gereffi 1999 ). While evidence is mixed for this claim (Humphrey and Schmitz 2004 ), the discussion largely revolved around a binary distinction of insertion or lack of insertion, paying insufficient attention to the conditions under which insertion leads to upgrading. As Schmitz and Knorringa ( 2000 :180) aptly note, “the issue is not whether buyers block or promote industrial development, but under what circumstances they are more likely to play a negative or positive role.” The new typology has brought fresh attention to different niches of upgrading, and specific conditions under which upgrading is likely to occur.

Organizational learning was proposed as a key upgrading mechanism in industrial organization studies. GCC scholars emphasized vertical learning from global buyers, or “learning-by-exporting” (Gereffi 1999 ), while industrial cluster literature tended to emphasize the horizontal dimension, or collective learning within clusters (Schmitz 1995 ; 1999 ). However, as insertion into global value chains has come to play an increasing role in the economic viability of industrial clusters in recent decades, an integrative and dynamic model is required to explain the upgrading of local producers, now embedded in both cluster and global networks.

One pressing question is the extent to which suppliers’ upgrading prospects are associated with the types of value chains they are inserted into (Humphrey and Schmitz 2002 ). Studies suggest that product and process upgrading is greatly facilitated by learning from global buyers. In Brazil’s Sinos Valley shoe cluster, US and European buyers tightly coordinate their chains through quasi-hierarchical (or captive) relationships, placing emphasis on price, quality control, and flexibility, according to Bazan and Navas-Aleman ( 2004 ). The researchers have found that these tightly coordinated buyer demands have tended to create favorable conditions for Brazilian suppliers to achieve product and process upgrading to meet such specific expectations. Likewise, learning from foreign buyers facilitated the upgrading of Taiwan’s personal computer producers in the early export phase, although buyers’ support declined as a wider supplier pool became available (Kishimoto 2004 ).

Evidence shows, however, that global buyers do not necessarily facilitate functional upgrading. While the Taiwanese suppliers succeeded in upgrading to ODM production by absorbing product design ability from foreign buyers (Kishimoto 2004 ), in other cases upgrading to higher-value activities is found to be inhibited in a captive mode of governance (Lee and Chen 2000 ; Giuliani et al. 2005 ). For example, Bazan and Navas-Aleman ( 2004 ) found functional upgrading out of reach for most Brazilian shoemakers catering to US and European chains. Buyers were reluctant to support it, or actively blocked it out of concern that the suppliers might compete with them. For a similar reason – potential conflicts with buyers – even leading export manufacturers are sometimes unwilling to upgrade into design and marketing. Functional upgrading has, instead, taken place in market-based chains driven by domestic and Latin American buyers. In this less restrictive governance form, the shoemakers could acquire new functions – for example design and marketing – which were not encouraged by American and European buyers.

Similarly, Bair and Gereffi ( 2001 ) have documented how the arrival of US buyers in the wake of the North American Free Trade Agreement (NAFTA) clearly contributed to the upgrading of blue jeans producers in Mexico. As more sophisticated production functions have crossed the border, several local full-package suppliers have emerged, indicating the occurrence of functional upgrading within the production segment of the chain. However, this has not led to any large-scale functional upgrading beyond production into such nodes as design, product development, branding, and marketing. The burden of investment and risk attached to such upgrading is cited as the main obstacle.

A more complicated understanding of upgrading has led GVC research to pay more attention to the evolutionary nature and divergent patterns of upgrading (Lee and Chen 2000 ; Schmitz 2004 ; Pietrobelli and Rabellotti 2006 ). While it is often portrayed that producers in developing countries take upgrading for granted, some researchers have found that this is not always the case. Any kind of upgrading requires strategic intent and substantial investments (Humphrey and Schmitz 2002 ). Some producers may choose to “downgrade” for short-term survival at the expense of an upgrading that might have provided for long-term growth, as exemplified by the Italian shoemakers of Brenta (Rabellotti 2004 ). The actual path of upgrading reflects different strategic moves on the supplier side against the varying opportunities and constraints they confront. Some suppliers take a step-by-step approach, for example from export platforms to OEM, ODM, and OBM. Others may strategically skip some steps or perform two different roles at the same time but for different market niches.

Drawing from the experience of Taiwan’s contract manufacturers, for example, Lee and Chen ( 2000 ) suggest that firms can find a chance to leverage what they have learnt from the global market and apply it in their operations in different, regional or local, chains, where they can enjoy a greater power and autonomy. In these alternative chains, they can build their own capabilities for higher-value domains, like product design, without being locked in or in conflict with existing global buyers. Lee and Chen further suggest that being an OEM producer is compatible with having one’s own design or brands and that playing dual roles as such may be synergistic with upgrading, an argument that also finds support from other cases (Bazan and Navas-Aleman 2004 ; Kishimoto 2004 ).

In short, GVC researchers have articulated the association of GVC governance with types of upgrading under various conditions. An upgrading path is no longer considered as linear and incremental, but as evolutionary and divergent. In shaping the path, suppliers’ competence building strategies are as critical as their relationships with global buyers.

The Social Construction of Global Chains

While noted by early GCC scholars (Gereffi et al. 1994 ; Hopkins and Wallerstein 1994 ), the socially constructed nature of global chains has been little examined until recently. However, a growing body of GVC literature explores how political and social institutions – norms, rules, regulations, standards, and conventions – interact with the organizational structure of global value chains and affect the dynamics of upgrading. It also examines how social activism and political contention shape global value chains and influence the lives of workers taking part in the chains. In the following, two topics from this emerging research area are particularly discussed: (1) standards and conventions in global value chains; and (2) social activism and GVC governance.

Many scholars have noticed the increased prevalence of private regulations in transnational economic activities in general (Nadvi and Waltering 2004 ; Ponte and Gibbon 2005 ), and more frequently in agrifood value chains (Reardon et al. 2001 ; Henson and Reardon 2005 ). For example, in response to elongated and globalized food supply networks and the potential risks involved, food standards have been tightened and extended in scope from safety into quality attributes, and social and environmental concerns. Along the way, a greater percentage of the standards shaping the industry have been promulgated, and are now enforced, by private actors, such as retailers, in the name of product differentiation (Henson and Reardon 2005 ). One of the examples is GLOBALGAP, a European retailer standards scheme for fresh fruit and vegetables.

A potentially fruitful area of inquiry arises out of this growing attention to the role of standards in global value chains (Ponte and Gibbon 2005 ; Gibbon 2008 ; Gibbon and Ponte 2008 ). Two relevant points particularly deserve making. First, setting and imposing quality-related standards or corporate codes of conduct are increasingly dependent on sector-wide collective bodies and third-party auditors, a shift from direct monitoring to indirect rule setting and enforcement (Hughes 2001 ). Concerning the governance implication of this shift, Ponte and Gibbon ( 2005 :20) suggest that market-based transactions may not lead to a real “hand-off” as long as they are re-regulated by the industry-wide standards and regulations driven by lead firms. Therefore, although power asymmetry between buyers and suppliers may be low in market-based governance at the transaction level, as suggested by Gereffi et al. ( 2005 ), it may be still significant at the chain governance level and ingrained in the distant form of control.

Second, attention to standards and regulations may bring greater focus on social and political institutions – such as the household, the state, and domestic agencies – back to GVC analysis. While being considered one of the key GVC dimensions (Gereffi 1995 ), institutions have garnered only scattered attention in GVC analysis (Cramer 1999 ; Leslie and Reimer 1999 ). In recent years, researchers have set out to explore the origins of the rules, norms, and discourse governing global value chains. One argument is that the institutions shaping particular global value chains originate in normative and ideological changes in buyer markets (Ponte and Gibbon 2005 ). Lead firms may take part in shaping the changes, but their actions are also affected by the broader institutional contexts in which they are embedded. Palpacuer et al. ( 2005 ), for instance, find that varying governance characteristics of clothing value chains among European retailers in Britain, France, and Scandinavia are associated with the extent to which firms in each country generally subscribe to such institutional logics as “financialization” and “supply chain rationalization.” The more they do, the more their supply networks are concentrated and the more they are subject to detailed standards. This finding can offer a hint of why governance forms and upgrading outcomes vary by chain, as different chains are directed to different national markets (Bazan and Navas-Aleman 2004 ; Gibbon 2008 ).

The idea that lead firms’ actions are socially constructed by broader contexts also points to the heightened influence of consumers and social and environmental activists on international trade. In recent years, consumer activism has increased its involvement in GVC governance (Hughes 2001 ; Raynolds 2002 ; Barrientos and Smith 2007 ). The uptick in consumer involvement has been triggered by growing public awareness of the production–consumption nexus, occasionally evoked by news coverage of contaminated food imports or of adverse labor conditions in the Third World factories employed by prominent global brands (e.g., antisweatshop campaigns in the US, the Dutch Clean Clothes Campaign, and the Fair Trade movement for coffee and other goods). In response to pressure from the public to hold lead firms responsible for whatever happens in their supply networks, some corporations have established codes of conduct and other corporate social responsibility measures (Barrientos and Dolan 2006 ).

From a GVC standpoint, one intriguing inquiry is the extent to which these corporate measures change the dynamics of value chains and are actually efficacious in making the intended changes. Two findings stand out. First, the efficacy of the codes implemented by lead firms is often undermined by their own just-in-time purchasing practices that emphasize flexibility and demand lower prices, shorter lead times, and stringent quality standards. Therefore, suppliers confront the double burdens of meeting often contradictory demands from buyers: be lean but not mean (Dolan 2004 ; Barrientos and Smith 2007 ). Second, the pressure and risks involved in flexible production are unevenly spread. They tend to transfer to upstream nodes within the chain; and within the nodes, informal sectors, often with a predominantly female workforce, tend to be left at a disadvantage. Focusing mainly on formal workers, some suggest, most codes of conduct fail to address the needs of informal workers, particularly women, when buyers’ demands for quality and flexibility increase their share in employment (Collins 2000 ; Barrientos et al. 2003 ).

Another fruitful line of research regarding the social construction of value chains is the examination of how value chain dynamics are factored into social contention. Noteworthy is research on the effect of industry structures on social movement outcomes. In a comparative study of campaigns against genetically modified (GM) foods in Britain and the US, Munro and Schurman ( 2009 ; see also Schurman 2004 ) find that the competitive and concentrated nature of processed food retailing in Britain facilitated anti-GM activists’ “cutting the commodity chains” strategy; that is, targeting supermarkets and playing one supermarket off against another in forcing them to reject GM foods. The same strategy, however, failed in the US. Food retailers in the US have a relatively easy exit when faced with anti-GM activism because their operations are geographically dispersed and diversified into organic produce. Different upstream structures of the GM food chains were also found to be relevant. British activists were emboldened by the fact that GM technology is imported from the US with little local support, particularly from farmers. However, in the US the strong power of vertically integrated seed multinationals (e.g., Monsanto) as the driver of GM food chains and the longstanding relations of the agro-business giants with local farmers effectively marginalized anti-GM activism.

In short, investigations of the social and normative dimensions of global chains, albeit still nascent, have contributed to opening up global chains research to social, political, and cultural contentions where economic transactions are nested. Responding to calls for linking the economy to social processes, and production to consumption, these attempts are certainly a welcome addition.

New Directions for Global Chains Research

This essay has reviewed the evolution of global chains research into one of the most effective approaches for exploring the changing dynamics of the global economy. From an organizational perspective, global chains literature addresses the crucial questions of global development studies: how gains from economic globalization are distributed, and how countries and firms improve their positions in the global economy. Over decades, scholars have considerably elaborated theories of GVC governance and of upgrading; at the same time, the scope of inquiry of the field has broadened to include the social construction of global chains.

Existing literature, however, still has theoretical and methodological gaps to redress. There is also no shortage of substantive domains in the global economy awaiting GVC analysis. This final section discusses some key gaps in the research and suggests future directions for global chains inquiry, focusing on (1) the clarification and elaboration of global chains theory and methods; and (2) the extension of its coverage into new substantive domains.

The global chains approach, as noted above, has been influenced by a variety of other theoretical strands at multiple junctures. In each turn, some elements were retained and combined with new pieces. As a result, it is noted that “the epistemological canvas of commodity chain analysis is very broad and its affiliations heterodox” (Rammohan and Sundaresan 2003 :921). While this “theoretical eclecticism” might increase its multidisciplinary appeal, the question has been raised whether the GVC approach is a heuristic or methodological tool to study economic globalization, or a coherent theoretical enterprise to explain it (Collins 2005 ; Gibbon et al. 2008 ). Some consider it an analytical tool “innocent of theory” that can capture particular – meso-level and organizational – dimensions of the global economy. Among those appreciating it as a theory, some affirm its theoretical promiscuity as a counter to modernist and economically deterministic development theory (Collins 2005 ), whereas others remain suspect of its theoretical integrity (Gibbon et al. 2008 ). Whether these disagreements will cohabit under the roof of global chains literature or are now diverging into different literatures remains an open question. The debate is underway, but with no definite conclusion as yet.

Whether GVC is understood as a method or as a theory, there are still challenging conceptual questions ahead emerging from recent studies. One is conceptually to bridge different levels of governance/coordination in global value chains, as discussed above. GVC governance is understood in three different ways, each of which highlights a particular aspect of governance and power relations: drivenness (Gereffi 1994 ), coordination (Gereffi et al. 2005 ), and convention (Ponte and Gibbon 2005 ). It remains unanswered whether these approaches are contending or complementary (Gibbon et al. 2008 ), and, if they are complementary, how two levels of governance – individual linkages and the entire chain – can be integrated into a comprehensive framework.

These questions also pertain to the issue of multiple governance structures. Recent GVC studies demonstrate that even a single value chain entails multiple governance forms. Lead firms as well as local suppliers operate in more than one chain. Multiple types of lead firms – manufacturers and retailers – coexist in a value chain with different strategies. Then, the question is the extent to which a certain firm can exert its power and contain others’ over the value chains and where the power comes from (see Fold 2002 ). Power relations in the horizontal dimension (e.g., competition between lead firms, and between suppliers) is an equally important topic, to be explored as much as vertical power asymmetry (i.e., between buyers and suppliers), a dimension on which GVC literature has more often focused. GVC analysis also would benefit from inquiry on the circumstances under which multiple governance structures poise opportunity or constraints for the upgrading of local suppliers.

One of the methodological difficulties in GVC analysis is that some of its key concepts are poorly operationalized. Gauging the distribution of gains in global value chains is still challenging because there is little agreement on the proper measure (e.g., surplus, added values, and unit values). Combined with the limited availability of firm-level data, this difficulty has led to a significant shortage of quantitative studies, with a few notable exceptions (e.g., Talbot 1997 ). Taken together, these problems in turn compound the difficulty of making cases comparable for across-the-board analysis. While single case studies can be comparative, the lack of rigorously operationalized and commonly used measures constrains any comparative inquiry that might contribute to building and testing a general theory.

This is not to say that all global chains researchers aim for a general model. In fact, some prefer a nuanced analysis and “thick descriptions” (Gibbon et al. 2008 ). They often trace the entire chain from inputs to final consumption, with detailed descriptions of each chain node. However, this is a daunting task given the geographical dispersion of global value chains; still, there have been some notable attempts in recent years (e.g., Collins 2003 ; Rivoli 2006 ). When well conducted, such studies are particularly effective in capturing the socially constructed dimensions of global value chains, for example how particular chain nodes are discursively racialized and gendered.

Global chains literature can further benefit from broadening the substantive domains and issues of its inquiry. One potentially valuable extension would be to examine the effect of value chain structures or governance types on phenomena beyond upgrading, a widely used outcome variable, as exemplified by the aforementioned anti-GM activism study (Munro and Schurman 2009 ). Take food and health as an example. Research on changes in agricultural value chains, such as consolidated and globalized food production and retailing, has been prolific. It has been little explored, however, how these organizational changes could affect various health and nutritional phenomena at the population level, such as nutritional transition, food (in)security, and food safety. Health scholars, meanwhile, have paid little attention to such macro-level factors as industry structure. GVC analysis can link the two literatures by examining how the global agrifood value chain affects the amount, type, and quality of food produced and marketed; such a line of inquiry could demonstrate consequences in various health outcomes.

Another promising contribution would come from research on various service sectors. Service sectors play a crucial role in keeping global value chains working. No global movement of goods, for example, is possible without the physical and information infrastructures that enable them. It is only recently that global logistics were subject to the scrutiny of global chain research. The expanding role of logistics providers into value chain coordinators or integrators highlights the importance of business service in the contemporary global economy (Ojala et al. 2008 ). This holds true, for example, for information technology and R&D services, which have become increasingly mobile and global in terms of production and consumption. Many countries and regions are eager to induce or nurture these service sectors; the challenging question is how to foster the necessary capabilities effectively. Analysis of these service sectors would not only improve the existing theories by testing their applicability, but might also provide entrepreneurs and policy makers with practical guidance.

Finally, more research on the institutional dimensions of global value chains, particularly on the supplier end, would be another welcome contribution. When paying attention to institutions, recent studies are largely focusing on the buyer side; that is, how institutions in the buyer country (e.g., paradigms of corporate governance and private codes of conduct) affect value chain dynamics. It is relatively unknown, however, how institutions on the supplier side influence not only the actions of local suppliers but also foreign buyers’ strategies. As with buyers, suppliers’ strategies and their positioning in global market niches are shaped by the institutional contexts in which they are embedded: state policy, regulations, and social conventions and discourses.

Notwithstanding unsettled issues and a long “to do” list, global chains research remains one of the most dynamic research strands for examining economic globalization and its consequences for the upgrading and wellbeing of various actors – countries, firms, workers, farmers, and consumers. Its organizational perspective exhibits a particular strength in illuminating the restructuring of the global economy and the unequal distribution of gains therein. A recent extension of the literature into health, the environment, social movements, innovation systems, and other contemporary development challenges demonstrates its theoretical and methodological flexibility in embracing a wide range of real-world issues in a rigorous manner. Therefore, global chains research would only benefit from the further articulation of its theoretical framework and the broadening of its substantive domains.

• Bair, J. (2005) Global Capitalism and Commodity Chains: Looking Back, Going Forward. Competition and Change 9 (2), 153–80.
• Bair, J. (2008) Analysing Global Economic Organization: Embedded Networks and Global Chains Compared. Economy and Society 37 (3), 339–64.
• Bair, J. (2009) Commodity Chains: Genealogy and Review. In J. Bair (ed.) Frontiers of Commodity Chain Research . Stanford: Stanford University Press, pp. 1–34.
• Bair, J. , and Gereffi, G. (2001) Local Clusters in Global Chains: The Causes and Consequences of Export Dynamism in Torreon’s Blue Jeans Industry. World Development 29 (11), 1885–903.
• Barrientos, S. , and Dolan, C. (eds.) (2006) Ethical Sourcing in the Global Food System . London: Earthscan.
• Barrientos, S. , and Smith, S. (2007) Do Workers Benefit from Ethical Trade? Assessing Codes of Labour Practice in Global Production Systems. Third World Quarterly 28 (4), 713–29.
• Barrientos, S. , Dolan, C. , and Tallontire, A. (2003) A Gendered Value Chain Approach to Codes of Conduct in African Horticulture. World Development 31 (9), 1511–26.
• Bazan, L. , and Navas-Aleman, L. (2004) The Underground Revolution in the Sinos Valley: A Comparison of Upgrading in Global and National Value Chains. In H. Schmitz (ed.) Local Enterprises in the Global Economy: Issues of Governance and Upgrading . Cheltenham: Edward Elgar, pp. 110–39.
• Campbell, D. , and Parisotto, A. (1995) The Global Value Chain Concept in Relation to the IILS Programme of Work. Paper presented at informal workshop on the International Organization of Production: A “Commodity Chains” Approach. Geneva.
• Clancy, M. (1998) Commodity Chains, Services and Development: Theory and Preliminary Evidence from the Tourism Industry. Review of International Political Economy 5 (1), 122–48.
• Collins, J.L. (2000) Tracing Social Relations through Commodity Chains: The Case of Brazilian Grapes. In A. Haugerud , M.P. Stone , and P.D. Little (eds.) Commodities and Globalization: Anthropological Perspectives . Lanham, MD: Rowman & Littlefield, pp. 97–109.
• Collins, J.L. (2003) Threads: Gender, Labor, and Power in the Global Apparel Industry . Chicago: University of Chicago Press.
• Collins, J.L. (2005) New Directions in Commodity Chain Analysis of Global Development Processes. Research in Rural Sociology and Development 11, 3–17.
• Cramer, C. (1999) Can Africa Industrialize by Processing Primary Commodities? The Case of Mozambican Cashew Nuts. World Development 27 (7), 1247–66.
• Daviron, B. , and Ponte, S. (2005) The Coffee Paradox: Global Markets, Commodity Trade, and the Elusive Promise of Development . London: Zed Books.
• Dolan, C. , and Humphrey, J. (2000) Governance and Trade in Fresh Vegetables: The Impact of UK Supermarkets on the African Horticulture Industry. Journal of Development Studies 37 (2), 147–76.
• Dolan, C. , and Humphrey, J. (2004) Changing Governance Patterns in the Trade in Fresh Vegetables between Africa and the United Kingdom. Environment and Planning A 36 (3), 491–509.
• Dolan, C.S. (2004) On Farm and Packhouse: Employment at the Bottom of a Global Value Chain. Rural Sociology 69 (1), 99–126.
• Dunaway, W.A. , and Clelland, D.A. (1995) Review of Commodity Chains and Global Capitalism . Journal of World-Systems Research 1.
• Fold, N. (2002) Lead Firms and Competition in “Bi-Polar” Commodity Chains: Grinders and Branders in the Global Cocoa–Chocolate Industry. Journal of Agrarian Change 2 (2), 228–47.
• Friedland, W.H. (1984) Commodity Systems Analysis: An Approach to the Sociology of Agriculture. In H.K. Schwarzweller (ed.) Research in Rural Sociology and Development: A Research Annual . Greenwich, CT: JAI Press, pp. 221–35.
• Gereffi, G. (1994) The Organization of Buyer-Driven Global Commodity Chains: How US Retailers Shape Overseas Production Networks. In G. Gereffi , and M. Korzeniewicz (eds.) Commodity Chains and Global Capitalism . Westport, CT: Greenwood Press, pp. 95–122.
• Gereffi, G. (1995) Global Production Systems and Third World Development. In B. Stallings (ed.) Global Change, Regional Response: The New International Context of Development . Cambridge: Cambridge University Press, pp. 100–42.
• Gereffi, G. (1996) Global Commodity Chains: New Forms of Coordination and Control among Nations and Firms in International Industries. Competition and Change 4, 427–39.
• Gereffi, G. (1999) International Trade and Industrial Upgrading in the Apparel Commodity Chains. Journal of International Economics 48 (1), 37–70.
• Gereffi, G. (2005) The Global Economy: Organization, Governance, and Development. In N.J. Smelser , and R. Swedberg (eds.) The Handbook of Economic Sociology , 2nd edn. Princeton: Princeton University Press, pp. 160–82.
• Gereffi, G. (2006) The New Offshoring of Jobs and Global Development . Geneva: International Institute for Labour Studies.
• Gereffi, G. , and Korzeniewicz, M. (1990) Commodity Chains and Footwear Exports in the Semiperiphery. In W.G. Martin (ed.) Semiperipheral States in the World-Economy . New York: Greenwood Press, pp. 45–68.
• Gereffi, G. , and Korzeniewicz, M. (eds.) (1994) Commodity Chains and Global Capitalism . Westport, CT: Greenwood Press.
• Gereffi, G. , Korzeniewicz, M. , and Korzeniewicz, R.P. (1994) Introduction: Global Commodity Chains. In G. Gereffi , and M. Korzeniewicz (eds.) Commodity Chains and Global Capitalism . Westport, CT: Greenwood Press, pp. 1–14.
• Gereffi, G. , Humphrey, J. , and Sturgeon, T. (2005) The Governance of Global Value Chains. Review of International Political Economy 12 (1), 78–104.
• Gereffi, G. , Humphrey, J. , Kaplinsky, R. , and Sturgeon, T.J. (2001) Introduction: Globalisation, Value Chains and Development. IDS Bulletin 32 (3).
• Gibbon, P. (2001) Upgrading Primary Production: A Global Commodity Chain Approach. World Development 29 (2), 345–63.
• Gibbon, P. (2008) Governance, Entry Barriers, Upgrading: A Re-Interpretation of Some GVC Concepts from the Experience of African Clothing Exports. Competition and Change 12 (1), 29–48.
• Gibbon, P. , and Ponte, S. (2005) Trading Down: Africa, Value Chains, and the Global Economy . Philadelphia: Temple University Press.
• Gibbon, P. , and Ponte, S. (2008) Global Value Chains: From Governance to Governmentality? Economy and Society 37 (3), 365–92.
• Gibbon, P. , Bair, J. , and Ponte, S. (2008) Governing Global Value Chains: An Introduction. Economy and Society 37 (3), 315–38.
• Giuliani, E. , Pietrobelli, C. , and Rabellotti, R. (2005) Upgrading in Global Value Chains: Lessons from Latin American Clusters. World Development 33 (4), 549–73.
• Henderson, J. , Dicken, P. , Hess, M. , Coe, N. , and Yeung, H.W.-C. (2002) Global Production Networks and the Analysis of Economic Development. Review of International Political Economy 9 (3), 436–64.
• Henson, S. , and Reardon, T. (2005) Private Agri-Food Standards: Implications for Food Policy and the Agri-Food System. Food Policy 30 (3), 241–53.
• Hopkins, T.K. , and Wallerstein, I. (1986) Commodity Chains in the World-Economy Prior to 1800. Review 10 (1), 157–170.
• Hopkins, T.K. , and Wallerstein, I. (1994) Commodity Chains: Construct and Research. In G. Gereffi , and M. Korzeniewicz (eds.) Commodity Chains and Global Capitalism . Westport, CT: Greenwood Press, pp. 17–20.
• Hughes, A. (2001) Global Commodity Networks, Ethical Trade and Governmentality: Organizing Business Responsibility in the Kenyan Cut Flower Industry. Transactions of the Institute of British Geographers 26 (4), 390–406.
• Humphrey, J. , and Schmitz, H. (2001) Governance in Global Value Chains. IDS Bulletin 32 (3).
• Humphrey, J. , and Schmitz, H. (2002) How Does Insertion in Global Value Chains Affect Upgrading in Industrial Clusters? Regional Studies 36 (9), 1017–27.
• Humphrey, J. , and Schmitz, H. (2004) Chain Governance and Upgrading: Taking Stock. In H. Schmitz (ed.) Local Enterprises in the Global Economy: Issues of Governance and Upgrading . Cheltenham: Edward Elgar, pp. 349–81.
• Kaplinsky, R. (1998) Globalization, Industrialization and Sustainable Growth: The Pursuit of the Nth Rent. IDS Discussion Paper No. 365. Brighton: Institute of Development Studies, University of Sussex.
• Kaplinsky, R. (2000) Globalisation and Unequalisation: What Can Be Learned from Value Chain Analysis? Journal of Development Studies 37 (2), 117–46.
• Kenney, M. , and Florida, R. (1994) Japanese Maquiladoras: Production Organization and Global Commodity Chains. World Development 22 (1), 27–44.
• Kishimoto, C. (2004) Clustering and Upgrading in Global Value Chains: The Taiwan Personal Computer Industry. In H. Schmitz (ed.) Local Enterprises in the Global Economy: Issues of Governance and Upgrading . Cheltenham: Edward Elgar, pp. 233–64.
• Kogut, B. (1985) Designing Global Strategies: Comparative and Competitive Value-Added Chains. Sloan Management Review 26 (4), 15–28.
• Lee, J.-R. , and Chen, J.-S. (2000) Dynamic Synergy Creation with Multiple Business Activities: Toward a Competence-Based Growth Model for Contract Manufacturers. Advances in Applied Business Strategy 6A, 209–28.
• Leslie, D. , and Reimer, S. (1999) Spatializing Commodity Chains. Progress in Human Geography 23 (3), 401–20.
• Martin, W.G. (ed.) (1990) Semiperipheral States in the World-Economy . New York: Greenwood Press.
• McMichael, P. (1995) Review of Commodity Chains and Global Capitalism . Contemporary Sociology 24 (3), 348–9.
• Munro, W.A. , and Schurman, R.A. (2009) Chain (Re)Actions: Comparing Activist Mobilization against Biotechnology in Britain and the United States. In J. Bair (ed.) Frontiers of Commodity Chain Research . Stanford: Stanford University Press, pp. 207–27.
• Nadvi, K. , and Waltering, F. (2004) Making Sense of Global Standards. In H. Schmitz (ed.) Local Enterprises in the Global Economy: Issues of Governance and Upgrading . Cheltenham: Elgar, pp. 53–94.
• O Riain, S. (2004) The Politics of Mobility in Technology-Driven Commodity Chains: Developmental Coalitions in the Irish Software Industry. International Journal of Urban and Regional Research 28 (3), 642–63.
• Ojala, L. , Andersson, D. , and Naula, T. (2008) Linking to Global Logistics Value Chains: An Imperative for Developing Countries. International Journal of Technological Learning, Innovation and Development 1 (3), 427–50.
• Palpacuer, F. , Gibbon, P. , and Thomsen, L. (2005) New Challenges for Developing Country Suppliers in Global Clothing Chains: A Comparative European Perspective. World Development 33 (3), 409–30.
• Pietrobelli, C. , and Rabellotti, R. (eds.) (2006) Upgrading to Compete: Global Value Chains, Clusters, and SMEs in Latin America . Washington, DC: Inter-American Development Bank.
• Ponte, S. , and Gibbon, P. (2005) Quality Standards, Conventions and the Governance of Global Value Chains. Economy and Society 34 (1), 1–31.
• Porter, M.E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance . New York: Free Press.
• Powell, W.W. (1990) Neither Market nor Hierarchy: Network Forms of Organization. Research in Organizational Behavior 12 (S 295), 336.
• Pyke, F.S. , Becattini, G. , and Sengenberger, W. (eds.) (1990) Industrial Districts and Inter-Firm Co-Operation in Italy . Geneva: International Institute for Labour Studies.
• Rabellotti, R. (2004) How Globalization Affects Italian Industrial Districts: The Case of Brenta. In H. Schmitz (ed.) Local Enterprises in the Global Economy: Issues of Governance and Upgrading . Cheltenham: Edward Elgar, pp. 140–73.
• Raikes, P. , Jensen, M.F. , and Ponte, S. (2000) Global Commodity Chain Analysis and the French Filière Approach: Comparison and Critique. Economy and Society 29 (3), 390–417.
• Rammohan, K.T. , and Sundaresan, R. (2003) Socially Embedding the Commodity Chain: An Exercise in Relation to Coir Yarn Spinning in Southern India. World Development 31 (5), 903–23.
• Raynolds, L.T. (2002) Consumer/Producer Links in Fair Trade Coffee Networks. Sociologia Ruralis 42 (4), 404–24.
• Reardon, T. , Codron, J.-M. , Busch, L. , Bingen, J. , and Harris, C. (2001) Global Change in Agrifood Grades and Standards: Agribusiness Strategic Responses in Developing Countries. The International Food and Agribusiness Management Review 2 (3–4), 421–35.
• Rivoli, P. (2006) The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade . Chichester: John Wiley.
• Rothstein, J.S. (2005) Economic Development Policymaking Down the Global Commodity Chain: Attracting an Auto Industry to Silao, Mexico. Social Forces 84 (1), 49–69.
• Schmitz, H. (1995) Small Shoemakers and Fordist Giants: Tale of a Supercluster. World Development 23 (1), 9–28.
• Schmitz, H. (1999) Global Competition and Local Cooperation: Success and Failure in the Sinos Valley, Brazil. World Development 27 (9), 1627–50.
• Schmitz, H. (2004) Local Enterprises in the Global Economy: Issues of Governance and Upgrading . Cheltenham: Edward Elgar.
• Schmitz, H. , and Knorringa, P. (2000) Learning from Global Buyers. Journal of Development Studies 37 (2), 177–205.
• Schurman, R.A. (1998) Tuna Dreams: Resource Nationalism and the Pacific Islands’ Tuna Industry. Development and Change 29 (1), 107–36.
• Schurman, R. (2004) Fighting “Frankenfoods”: Industry Opportunity Structures and the Efficacy of the Anti-Biotech Movement in Western Europe. Social Problems 51 (2), 243–68.
• Sturgeon, T.J. (2001) How Do We Define Value Chains and Production Networks? IDS Bulletin 32 (3), 9–18.
• Sturgeon, T.J. (2002) Modular Production Networks: A New American Model of Industrial Organization. Industrial and Corporate Change 11 (3), 451–96.
• Sturgeon, T.J. (2009) From Commodity Chains to Value Chains: Interdisciplinary Theory Building in an Age of Globalization. In J. Bair (ed.) Frontiers of Commodity Chain Research . Stanford: Stanford University Press, pp. 110–35.
• Talbot, J.M. (1997) Where Does Your Coffee Dollar Go? The Division of Income and Surplus Along the Coffee Commodity Chain. Studies in Comparative International Development 32 (1), 56.
• United States Agency for International Development (2005) Trade, Micro and Small Enterprises, and Global Value Chains. microREPORT #25 February.
• Whitley, R. (1996) Business Systems and Global Commodity Chains: Competing or Complementary Forms of Economic Organisation. Competition and Change 1 (4), 411–25.
• Williamson, O. (1985) The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting . New York: Free Press.

Links to Digital Materials

Center on Globalization, Governance and Competitiveness (CGGC), Duke University. At www.cggc.duke.edu , accessed July 27, 2009. The CGGC, directed by Gary Gereffi , focuses on using global value chains methodology to study the effects of globalization on various topics of interest, including industrial upgrading, the environment, global health, engineering and entrepreneurship, and innovation in the global knowledge economy. The website lists recent studies conducted by the center.

Danish Institute of International Studies (DIIS). At www.diis.dk , accessed July 27, 2009. DIIS is an independent research institution engaged in research in international affairs. Its trade and development research unit, headed by Peter Gibbon , examines how developing countries could better participate in the global economy, focusing on standards, smallholders in international trade, international trade regimes, and African development.

Duke University–Venice International University (VIU) International Summer Research Workshops. At www.dukeviuworkshop.org , accessed July 27, 2009. These multiyear workshops, co-organized by Duke’s Center on Globalization, Governance and Competitiveness (CGGC) and VIU’s Center for Studies on Technologies in Distributed Intelligence Systems (TeDIS), aim to train future scholars with two institutions’ complementary research foci: CGGC’s GVC approach and the TeDIS’s research of Italian industrial districts. The 2009 workshop will be held at Duke University following its inaugural workshop in Venice in 2008.

Global Value Chains Initiative. At www.globalvaluechains.org , accessed July 27, 2009. The GVC Initiative is a loose network of researchers, activists, and policy makers who seek to consolidate and foster the GVC perspective. Its website provides information on researchers involved in GVC studies and their publications. As of November 2008, more than 330 researchers and 380 publications are listed in a searchable form.

A Handbook for Value Chain Research (by Raphael Kaplinsky and Mike Morris , 2000). At www.globalvaluechains.org/docs/VchNov01.pdf , accessed July 27, 2009. Manual for Value Chain Research on Homeworkers in the Garment Industry (by Dorothy McCormick and Hubert Schmitz , 2001), www.globalvaluechains.org/docs/wiegomanualendnov01.pdf . These two publications provide comprehensive guidance for conducting a GVC analysis. The Handbook covers the basic definition of the key concepts, major analytical constructs, and methodological issues. The Manual is widely regarded as an exemplar of applying GVC methodology to a specific case. It also covers other quite useful topics, such as visualizing value chains.

Institute of Development Studies (IDS). At University of Sussex, www.ids.ac.uk/ids/ , accessed July 27, 2009. IDS is a leading global organization for research, teaching, and communications on international development, founded in 1966. Globalization and governance are among the key research themes of the Institute. Its Globalization Team uses the concept and methodology of value chains for research and policy work aimed at promoting sustainable growth and reducing poverty.

United States Agency for International Development (USAID), microLINKS: Value Chain Approach. At www.microLINKS.org/valuechains , accessed July 27, 2009. This USAID website provides information on the organization’s value chain framework, including key background materials, an introduction to the USAID value chain framework, and the organization’s activities concerning the application of value chain-related concepts to development projects. Its Wiki website contains such entries as “value chain analysis,” “governance”, “upgrading,” and other GVC-related concepts.

Acknowledgments

The author is grateful to Gary Gereffi and two anonymous reviewers for their helpful comments and to Marcy Lowe for her editorial assistance on earlier drafts of this essay. Responsibility for any error that remains, however, is the author’s.

Printed from Oxford Research Encyclopedias, International Studies. Under the terms of the licence agreement, an individual user may print out a single article for personal use (for details see Privacy Policy and Legal Notice).

date: 18 May 2024

• Cookie Policy
• Privacy Policy
• Legal Notice
• Accessibility
• [66.249.64.20|185.194.105.172]
• 185.194.105.172

Character limit 500 /500

Emerging research themes in global value chains

International Journal of Emerging Markets

ISSN : 1746-8809

Article publication date: 23 January 2020

Issue publication date: 23 January 2020

Arora, A.S. and Hartley, N. (2020), "Emerging research themes in global value chains", International Journal of Emerging Markets , Vol. 15 No. 1, pp. 1-3. https://doi.org/10.1108/IJOEM-02-2020-603

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

Global supply chains are continually evolving and transforming the way emerging world economies do business with their developed counterparts. Developing nations are joining forces with developed nations through these rapidly transforming global value chains (GVCs) without investing in building their own; thus saving time, money and gaining access to technological innovations. Today, developing countries are exerting greater influence globally, economically and politically, given the power of GVCs. Through international organizations, such as the World Bank, the World Trade Organization, the International Labor Organization, and the US Agency for International Development, GVCs lead the way for shaping international trade, governance, production, employment, growth, development and competitiveness. Global economy is entering a “major inflection point,” whereby GVCs are becoming increasingly predominant in both emerging and industrialized countries, and emerging economies have become a major engine of growth for global businesses and international trade ( Stephenson, 2016 ).

In this special issue of the IJOEM , we present papers focused on supply chains as value chains in emerging (vs developed) economies, international trade, and interrelationships amongst logistics, supply chain management and global trade. These papers offer conceptual and empirical insights into the nature and processes of value chains, GVC approaches and frameworks in different world economies, channel development and management, geographical collaborations, and global supply chains. There are some research themes that emerged out of these papers that we have highlighted below.

Research Theme 1: the emergence of inventive process, institutional theory and transformative models

Agmon (2020) focuses on the inventive process as metamorphic innovative ideas in technology in today’s business world. In his research, he explains how multinational enterprises (MNEs) can use inventive process for their growth in both developed and emerging markets. He dives into the inventive process and shows interrelationships between innovative technology and innovative management. In similar vein, Rottig et al. (2020) have applied institutional theory and legitimacy to explore how MNEs need to understand and adapt to, for successfully operating in emerging markets ( Rottig et al. , 2020 ). Due to technology supported GVCs that are created by individuals and small teams/organizations, there are new innovative international business models created worldwide which have proven to be more powerful than the existing MNEs. GVCs are built on collaborative supply chain activities and endeavors with institutional pressures and efficiencies in order to build socially, economically and environmentally sustainable organizations ( Tate et al. , 2010 ; Mudambi, 2007 ; Clarke and Boersma, 2017 ). Yeoman and Mueller Santos (2020) support a collaborative approach to supply chain structure which centers on supply chain fairness. This transformative model is resultant in both positive organizational and system level outcomes. Here, a new supply chain structure, achieved through the adoption of plural fairness principles and practices, transforms the interactions of key supply chain stakeholders including the firm, mediating institutions and governments. These papers denote the complexity of GVCs and the need for emerging economies to look to new and innovative models and systems to manage their growing presence in the global arena.

Research Theme 2: overcoming barriers and new GVC configurations

Emergent GVCs are faced with a plethora of economic, sociological and geographical challenges which have the power to negatively affect the growth of organizations in many emerging countries. Best practices of how to navigate the complexity of GVC systems when new worlds of trade arise are noted in the following three papers. Vickova and Thakur-Weigold (2020) examine and compare the economic outcomes and positions of both a highly developed and emerging GVC within the medical technology (MedTech) industry. Their findings highlight organizational barriers (i.e. the apparent focus on low value activities) and weak links between education institutions and industry for the emerging market GVC as key barriers to growth.

Further, organizational and industry factors were empirically examined in Olaitan et al. ’s (2020) study of barriers to horticulture product export. Here, the authors analyzed five key stakeholder groups upstream in the supply chain and identified that: the existing institutional framework, infrastructure and logistics issues, market penetration issues, stakeholders’ incompetence, food safety and quality issues, high transaction costs, operational challenges of exporting, neglect of agriculture and the existing airline market structure are prominent barriers that require resolution, if horticultural product exports are to increase. These research papers identify key supply chain factors that need to be traversed in emerging markets; however, considerations also need to include how GVCs are configured to enhance the likelihood of barrier mitigation. Petersen et al. (2020) explore GVC configuration from a geographic lens and denote a shift away from GVCs orchestrated by MNEs from more developed economics which have been defined by operational efficiency logics to a new “breed” of GVCs. These new configurations successfully combine operational efficiency with societal goals. These societal goals are politically defined and afford a considerable influence over the GVC configuration. The close co-operation between businesses and government in emerging markets has been previously identified ( Behrman, 1970 ; Stopford and Henley, 1991 ); however, the findings from this paper highlight a more prominent role of government in the geographical configuration of GVCs.

Research Theme 3: cross-cultural collaborative strategies supporting GVCs

Alvarado-Vargas and Kelley (2020) utilize bullwhip effect to investigate uncertainty levels in the marketplace that creates global and regional supply chains disruptions. The authors suggest implications to mitigate disruptions enabling supply chain sustainability. Uncertainties and associated risks are higher in global supply chains due to intense bullwhip conditions. Pratono’s (2020) study focuses on cross-cultural collaboration between developed and emerging economies through creative innovation and technology transfer utilizing typologies of GVC collaboration in a global rattan industry. This cross-cultural GVC transformation involves selectivity, enlisting intermediaries, joint strategy, relational capital, multilateral feedback and distribution.

In navigating the complexity of supply chain partnerships, de Waal and de Haas (2020) apply and empirically examine the application of strategies adopted in developed markets to enhance GVC success. In light of the difficulties faced by organizations in creating successful supply chain partnerships ( Gomes et al. , 2016 ; Sabath and Fontanella, 2002 ), the authors seek to examine the application of an internally driven collaborative culture to value chain outcomes. The HPP framework is focused on the establishment of long-term relationships between value chain intermediaries, and when applied to an emerging market setting, has been shown to derive improved performance outcomes, including enhanced profitability for each partner firm in the value chain.

In conclusion, this IJOEM special issue highlights research papers in three research themes (identified above) that contribute to an improved understanding of GVCs and GVC-related factors that pivots on inventive process, transformative models, institutional theory, GVC configurations and cross-cultural collaborative strategies. A transformative GVC approach will help firms, stakeholders, institutions and government policy makers. Future GVC research will benefit from the three research themes identified in this issue, which are based on co-operation and collaboration amongst all stakeholders, including firms, suppliers, intermediaries, consumers, business partners, governments, trade unions, cooperatives and non-profit organizations.

Agmon , T. ( 2020 ), “ The role of multinational enterprises in global valuation ”, International Journal of Emerging Markets , Vol. 15 No. 1 , pp. 4 - 23 .

Alvarado-Vargas , M.J. and Kelley , J.K. ( 2020 ), “ Bullwhip severity in conditions of uncertainty: regional vs global supply chain strategies ”, International Journal of Emerging Markets , Vol. 15 No. 1 , pp. 131 - 148 .

Behrman , J.N. ( 1970 ), National Interests and the Multinational Enterprise , Prentice-Hall , Englewood Cliffs, NJ .

Clarke , T. and Boersma , M. ( 2017 ), “ The governance of global value chains: unresolved human rights, environmental and ethical dilemmas in the apple supply chain ”, Journal of Business Ethics , Vol. 143 No. 1 , pp. 111 - 131 .

de Waal , A. and de Haas , J. ( 2020 ), “ Creating high performance partnerships in Asia: the case of NEH the Philippines ”, International Journal of Emerging Markets , Vol. 15 No. 1 , pp. 171 - 188 .

Gomes , E. , Barnes , B.R. and Mahmooda , T. ( 2016 ), “ A 22 year review of strategic alliance research in the leading management journals ”, International Business Review , Vol. 25 , pp. 15 - 27 .

Mudambi , R. ( 2007 ), “ Offshoring: economic geography and the multinational firm ”, Journal of International Business Studies , Vol. 38 No. 1 , p. 206 .

Olaitan , F.O. , Hubbard , J.N. and Bamford , G.C. ( 2020 ), “ The potential for the participation of Nigeria in global horticulture value chains ”, International Journal of Emerging Markets , Vol. 15 No. 1 , pp. 93 - 110 .

Pratono , H.A. ( 2020 ), “ Cross-cultural collaboration for inclusive global value chain: a case study of rattan industry ”, International Journal of Emerging Markets , Vol. 15 No. 1 , pp. 149 - 170 .

Rottig , D. , Muscarella , S. and de Oliveira , R.T. ( 2020 ), “ Managing formal institutional challenges when entering Cuba: a multinational corporation perspective ”, International Journal of Emerging Markets , Vol. 15 No. 1 , pp. 24 - 49 .

Sabath , R.E. and Fontanella , J. ( 2002 ), “ The unfulfilled promise of supply chain collaboration ”, Supply Chain Management Review , Vol. 6 No. 4 , pp. 24 - 29 .

Stephenson , S. ( 2016 ), Trade Governance Frameworks in a World of Global Value Chains: Policy Options, E15 Expert Group on Global Value Chains: Development Challenges and Policy Options – Policy Options Paper, E15Initiative , International Centre for Trade and Sustainable Development (ICTSD) and World Economic Forum , Geneva .

Stopford , J.M. and Henley , J.S. ( 1991 ), Rival States, Rival Firms: Competition for World Market Shares , Cambridge University Press , Cambridge .

Tate , W.L. , Ellram , L.M. and Kirchoff , J.F. ( 2010 ), “ Corporate social responsibility reports: a thematic analysis related to supply chain management ”, Journal of Supply Chain Management , Vol. 46 No. 1 , pp. 19 - 44 .

Vickova , J. and Thakur-Weigold , B.S. ( 2020 ), “ Global value chains in the MedTech industry ”, International Journal of Emerging Markets , Vol. 15 No. 1 , pp. 70 - 92 .

Yeoman , R. and Mueller Santos , M. ( 2020 ), “ A complex systems model for transformative supply chains in emerging markets ”, International Journal of Emerging Markets , Vol. 15 No. 1 , pp. 50 - 69 .

Related articles

We’re listening — tell us what you think, something didn’t work….

Report bugs here

All feedback is valuable

Please share your general feedback

Join us on our journey

Platform update page.

Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

Questions & More Information

Answers to the most commonly asked questions here

Global Value Chains

Participation in global value chains can lead to increased job creation and economic growth.

Participation in global value chains (GVCs), the international fragmentation of production, can lead to increased job creation and economic growth. In order to reap the gains from value chain participation, countries must put in place the right kind of trade and investment policies. The COVID-19 pandemic has highlighted the urgent need to understand the dependency of many countries on suppliers across the world. The World Bank Group is helping developing countries understand the role that GVCs can play in delivering growth, increasing regional and global integration, and managing external shocks. 

What are GVCs?

• Companies used to make things primarily in one country. That has all changed. Today, a single finished product often results from manufacturing and assembly in multiple countries, with each step in the process adding value to the end product.
• Through GVCs, countries trade more than products; they trade know-how, and make things together. Imports of goods and services matter as much as exports to successful GVCs.
• GVCs integrate the know-how of lead firms and suppliers of key components along stages of production and in multiple offshore locations. The international, inter-firm flow of know-how is the key distinguishing feature of GVCs.
• How countries engage with GVCs determines how much they benefit from them.

Why are GVCs important for growth?

• GVCs are a powerful driver of productivity growth, job creation, and increased living standards.
• Countries that embrace them grow faster, import skills and technology, and boost employment.
• With GVC-driven development, countries generate growth by moving to higher-value-added tasks and by embedding more technology and know-how in all their agriculture, manufacturing, and services production. GVCs provide countries the opportunity to leap-frog their development process.

Are developing countries part of the new GVC paradigm?

• Some developing countries have fully embarked on the GVC revolution, but they still face challenges in aligning GVCs with their national development strategies.
• Others view GVCs as recreating the core vs. periphery pattern, with the “good” jobs concentrated in the North and “bad” jobs in the South.
• Yet even the most reluctant skeptics recognize that the GVC-driven success of nations like China and India illustrates the significant boost in a country’s competitiveness that can be delivered by combining competitive costs of production with high technology.
• The right strategies can help developing countries maximize their participation in GVCs.

How does the World Bank Group help countries seize GVC opportunities?

• The World Bank Group Global Practices and Cross-Cutting Solutions areas help client countries design and implement effective, solutions-oriented reforms.
• The Bank Group provides integrated solutions tailored to country needs. Advisory services and financial support—including development policy lending to governments, investment in the private sector, and MIGA guarantees—can cover long-term strategies for deep structural reform or support for more targeted policy interventions addressing shorter-term challenges.
• The Bank Group brings to bear its hands-on local presence, access to lead firms and investment communities, rich data, and world-class analytical capabilities.

What can developing countries do to optimize participation in GVCs?

• Governments need to have a clear vision and mandate to improve coordination among government players, and ensure the involvement of the private sector.
• Opening borders and attracting investment can help jump-start entry in GVCs.
• Countries will derive the greatest benefit by maximizing the absorption potential of the domestic economy and by strengthening its linkages with GVCs.
• Many diverse policy areas affect the success of GVCs. They include, among others, trade policy, logistics and trade facilitation, regulation of business services, investment, business taxation, innovation, industrial development, conformity to international standards, and the wider business environment fostering entrepreneurship.
• Finally, countries should identify measures that will complement their GVC strategies. These include a large swath of dimensions, from investment in education and vocational training to environment and urbanization, from ICT and infrastructure building to labor market mobility.

What role does the World Bank Group’s The Macroeconomics, Trade and Investment Global Practice play?

• As the world of GVC production matures, the need for context-specific assessment and intervention has become more important in answering fundamental questions about GVC participation, sustainability, and the benefits to host countries.
• The Macroeconomics, Trade and Investment Global Practice (MTI) provides evidence-based policy options to formulate and implement context-specific GVC strategies.
• MTI uses analytical and diagnostics tools and data-gathering to offer solutions in terms of analytical services, lending and investment operations, as well as guarantees customized to specific country needs.

What Are Global Value Chains?

• Global Value Chains in Light of COVID-19: Trade, Development & Climate Change
• Trading for Development in the Age of Global Value Chains

Building African Participation in Global Value Chains

• Regional Integration
• Umbrella Facility for Trade
• How global value chain participation affects wage inequality and worker tasks

This site uses cookies to optimize functionality and give you the best possible experience. If you continue to navigate this website beyond this page, cookies will be placed on your browser. To learn more about cookies, click here .

• Publications

From Disruption to Opportunity: Strategies for Rewiring Global Value Chains

Global value chains continue to face challenges ranging from the climate crisis to geopolitical headwinds and next-generation technologies. Manufacturers must decide how best to reconfigure their supply chains to safeguard their operations well into the future.

Last year’s report, A Global Rewiring: Redefining Global Value Chains for the Future , produced by the World Economic Forum in collaboration with Kearney, identified five trends shaping the rewiring of global value chains, including a shift to a digital-first model of operations, greater focus on customer value, and greater emphasis on skills and innovation.

This white paper notes the developments in these five trends over the past year, drawing on insights from over 300 global operations executives and over 30 consultations. It outlines strategies that represent a playbook of proven best practices and can enable global value chains to navigate future market turbulence while encouraging a step-change in collaboration between the public and private sectors.

World Economic Forum reports may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License , and in accordance with our Terms of Use .

Globalization presents numerous challenges and opportunities. Firms and workers in widely separated locations affect one another more than they have in the past. Some of these effects are quite straightforward, such as when a firm from one country establishes a new factory or engineering center in another country. Others are more complex, such as when a firm in one country contracts with a firm in another country to coordinate production in plants owned by yet another firm in a third country, and so on.

In the midst of this environment, policymakers strive for inclusive development and improved competitiveness. To accomplish these goals, many seek new language and tools to understand globalization and economic development. These are among the reasons why 35 clients – international organizations, national governments and foundations – have contracted research resulting in over 100 reports. This research has provided practical, real-world advice that has informed decision-making on topics such as workforce development, the environment, food security, small- and medium-enterprises’ inclusion in the global economy, competitiveness, upgrading and public-private partnerships.

The Global Value Chain (GVC) framework and other analytical tools provide an industry-centric view of economic globalization that highlights linkages across countries and firms. It can be applied to any industry at multi-country, regional and subnational levels.

Research is customized for each client. Deliverables vary based on the client’s needs and may include reports, research and policy briefs, journal articles, presentations, databases, or websites.

WHAT CLIENTS SAY

“We found the GVC framework developed by Duke GVC Center to be a very valuable tool to analyze our industry position in different GVCs. It is a well structured and organized tool that shows both the qualitative and quantitative elements, and allows for identifying possible policy interventions.” – Francisco Monge, Deputy Director General of the Ministry of Foreign Trade of Costa Rica

“We were were very pleased with the results of the study and the center’s quality work. It was very relevant to our efforts. There are lots of opportunities for new lines of investigation moving forward.” – Gabriela Castro, formerly the Minister’s Chief of Staff and currently the Head of Investment of the Policy Division at COMEX (Ministerio de Comercio Exterior de Costa Rica; Ministry of Foreign Trade in Costa Rica)

“The strength of the Center is the multi-country global experience. The Duke GVC Center is very effective at telling the story of what a value chain does in a sector and describing it thoroughly.” – Carlo Pietrobelli, Lead Specialist in the Competitiveness and Innovation Division of the Inter-American Development Bank

“The Duke GVC Center is a team of smart researchers who know how to model supply chains really well. By tapping their contacts in select industries and conducting original, in-depth research interviews, they were able to provide us with us with keen insights that informed our program work and strategic planning.” – Greg Andeck, former Manager, Environmental Defense Fund

“Being a research center linked with a university lends credibility to the Duke GVC Centerthat goes beyond what one would get from hiring a pure consulting firm. This definitely makes a difference to organizations such as the World Bank and governments.” – Tom Farole, World Bank

“The GVC framework provides a good snapshot of the global value chain. It connects well both the domestic dimensions of GVC participation, but also helps you understand where the country is positioned in the broader value chain. It is implemented at a very detailed level, resulting in great recommendations. I think the framework can be applied to countries irrespective of their level of development. It helps countries understand where they sit on the value chain at the international level, and then to identify the restraints domestically and how to go about addressing these restraints.” – Anabel Gonzalez, Senior Director of the Trade and Competitiveness practice at the World Bank and formerly Costa Rica’s Minister of Foreign Trade

PROJECT WEBSITES

• Frontiers in Nutrition
• Nutrition and Food Science Technology
• Research Topics

Storage and Deep-Processing of Fruit and Vegetable Products

Total Downloads

Total Views and Downloads

About this Research Topic

With the increasing development of the global food supply chain and the growth of international trade, the study of fruit and vegetable drying and high-value intensive processing has become one of the cutting-edge topics in the field of food science. One of the most significant categories of agricultural products in agricultural production is fruits and vegetables. Drying is a crucial food processing technique, as well as a means of food preservation. Nowadays, people are more and more concerned about the quality of products after drying, and the requirements for the drying of agricultural products are becoming more and more stringent. Through the use of advanced technologies and innovative methods, researchers are constantly exploring ways to maximise the retention of nutrients in fruits and vegetables or to elucidate their drying mechanisms. High-value deep processing is to improve quality and efficiency, through the optimisation of the drying process or deep processing and other ways to further improve the added value of fruit and vegetable products. Therefore, drying and high-value deep processing of fruits and vegetables have become an important area of food science research today, attracting more and more attention and input from scholars and industries. The purpose of this topic is to shed light on the mechanisms involved in the drying and processing of fruits and vegetables as well as how to implement the intensive processing pathway using various pre-treatment technologies, drying technologies, and contemporary novel techniques. This Research Topic aims to contribute to promote the storage and processing of fruits and vegetables, reducing costs and improving quality and efficiency. This research topic welcomes submissions of the following article types: Brief Research Report, Conceptual Analysis , Data Report, General Commentary, Hypothesis & Theory, Methods, Mini Review, Opinion, Original Research, Perspective, Policy and Practice Reviews, Review, Systematic Review, Technology and Code. This research topic welcomes manuscripts relevant to processing technology and mechanism research, including but not limited to the following aspects: ● Application of different drying and pre-treatment technologies in fruit and vegetable. ● The drying and desiccation mechanism in microscopic level: the effect of different drying and pretreatment techniques on the microstructure observed by microscopic techniques such as SEM and TEM. ● Optimized drying process, providing a new way for high-quality further-processing. ● Design and flow field simulation modelling of fruit and vegetable dryers. ● Studies related to mathematical modelling of fruit and vegetable drying. ● Research on precision drying. Accurate prediction of drying endpoints through the study of moisture migration during drying by means of intelligent technologies, such as vision or low-field nuclear magnetic resonance (LF-NMR).

Keywords : Drying, Fruit and vegetable products, Deep-processing, High-quality process, Drying process and quality

Important Note : All contributions to this Research Topic must be within the scope of the section and journal to which they are submitted, as defined in their mission statements. Frontiers reserves the right to guide an out-of-scope manuscript to a more suitable section or journal at any stage of peer review.

Topic Editors

Topic coordinators, submission deadlines, participating journals.

Manuscripts can be submitted to this Research Topic via the following journals:

total views

• Demographics

No records found

total views article views downloads topic views

Top countries

Top referring sites, about frontiers research topics.

With their unique mixes of varied contributions from Original Research to Review Articles, Research Topics unify the most influential researchers, the latest key findings and historical advances in a hot research area! Find out more on how to host your own Frontiers Research Topic or contribute to one as an author.