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Designing Global Strategies: Comparative and Competitive Value-Added Chains
Abstract
This article, the first of a two-part series, shows how the value-added chain can be used to analyze sources of international strategic advantages. The author argues that it is essential that a distinction be drawn between competitive and comparative advantage. He illustrates the importance of this distinction by looking at structural shifts in the world economy and arguing that these shifts reflect changes in comparative advantage. The impact of these changes leads to only a few choices for the firm facing import competition and possessing no competitive advantage. The author stresses that if the global advantages acquired by international participation are not sustained, competition reverts to domestic competition among firms with different national names.
... "Montra virtual" de produtos e serviços, gera padrões e permite a junção de mercados no mercado mundial. Kogut (1985) Fonte: elaboração própria com base em Martin e Lopez (2007) (2004), Bartlett e Goshal (1989), Kogut (1985). ...
... "Montra virtual" de produtos e serviços, gera padrões e permite a junção de mercados no mercado mundial. Kogut (1985) Fonte: elaboração própria com base em Martin e Lopez (2007) (2004), Bartlett e Goshal (1989), Kogut (1985). ...
... Exportação direta, a retalho, pois a empresa comercializa diretamente com o consumidor final e indireta através de distribuidores. Detentora de produtos únicos no mundo, a empresa aproveita ainda todas as vantagens que o e-commerce lhe pode proporcionar desde a redução de custos, aumento de credibilidade, maior e mais rápido acesso à informação, eliminação de intermediários e o acesso a um mercado de maiores dimensões, pelo que, neste âmbito, o processo enquadra-se na perspetiva de Kogut (1985). Como a exportação é sempre feita na base da compra direta pelo distribuidor, os mesmos não encaram a loja online como concorrência contornando uma das principais desvantagens apontadas a este modo de entrada. ...
A temática da internacionalização constitui uma área de pesquisa que se mantém muito atual, na medida em que a internacionalização se assume como estratégia chave para a competitividade das empresas e das economias. No contexto português, a internacionalização e diversificação de mercados parece assumir um papel fundamental para a sustentabilidade dos negócios. Sendo definido como um processo complexo, envolvendo riscos elevados, o objetivo deste trabalho será estudar o Processo de Internacionalização (PI) de empresas portuguesas. Seguindo uma metodologia qualitativa, assente no estudo de caso, pretende-se identificar estratégias, dificuldades e captar a complexidade e especificidade desses processos. Dado que, ao analisar o PI de uma empresa, é importante confrontar modelos teóricos com a prática empresarial, procuraremos confrontar e verificar a validade das teorias e literatura relevantes com os casos em análise. Os resultados indicam que não é possível enquadrar os casos em estudo num único modelo teórico e que o Modelo não Sequencial parece ser o mais indicado para caraterizar a estratégia das empresas em causa.
... Second, in addition to increased market access, cross-border M&As allow exploitation of favorable government policies and regulations in other countries to, for instance, optimize taxation (Markides & Ittner, 1994) or reduce factor costs (i.e., wages, material, capital costs) (Bertrand & Capron, 2015;Kogut, 1985). Cross-border M&A deals allow for greater opportunities to benefit from efficiency gains resulting from economies of scale and scope on a global scale through, for instance, standardized products and production processes across countries (Bertrand & Capron, 2015;Doukas & Travlos, 1988;Kogut, 1985). ...
... Second, in addition to increased market access, cross-border M&As allow exploitation of favorable government policies and regulations in other countries to, for instance, optimize taxation (Markides & Ittner, 1994) or reduce factor costs (i.e., wages, material, capital costs) (Bertrand & Capron, 2015;Kogut, 1985). Cross-border M&A deals allow for greater opportunities to benefit from efficiency gains resulting from economies of scale and scope on a global scale through, for instance, standardized products and production processes across countries (Bertrand & Capron, 2015;Doukas & Travlos, 1988;Kogut, 1985). Cross-border M&As can thus lead to increased bargaining power (i.e., over suppliers, distributors, or customers), which helps reduce costs (Hitt et al., 1997;Kogut, 1985). ...
... Cross-border M&A deals allow for greater opportunities to benefit from efficiency gains resulting from economies of scale and scope on a global scale through, for instance, standardized products and production processes across countries (Bertrand & Capron, 2015;Doukas & Travlos, 1988;Kogut, 1985). Cross-border M&As can thus lead to increased bargaining power (i.e., over suppliers, distributors, or customers), which helps reduce costs (Hitt et al., 1997;Kogut, 1985). In summary, we argue that based on fewer opportunities to increase revenues and reduce costs, domestic M&As underperform cross-border M&As: ...
Extant research has yielded conflicting theoretical and empirical predictions about whether family firm acquirers perform better or worse in mergers and acquisitions (M&As) than their nonfamily firm counterparts. To help resolve this controversy, we take a socioemotional wealth (SEW) perspective to theorize that family members’ desire to preserve their SEW favors the pursuit of M&A strategies that are both beneficial (industry-related M&As) and detrimental (domestic M&As) to M&A performance. We further theorize that the desire to preserve SEW leads to family firm idiosyncratic SEW resources that help family firm acquirers, on average, achieve better M&A performance than nonfamily firm acquirers. Meta-analytic results based on 51 primary studies covering 242,123 M&A deals are in line with our predictions. Thus, our study contributes to the literature on family firms and M&A performance by explaining how the different M&A strategies chosen by family firms have positive and negative consequences for M&A performance. Our theory and findings have implications for future family business and M&A research.
... According to Bartlett & Ghoshal (2002), they argue that to address the needs of different countries, there is a need for firms to provide both global integration and local responsiveness. Kogut, (1985) in his work discusses how globalization forces companies to work towards attaining operational excellence through supply chain and manufacturing networks. According to Kogut (1985), MNCs derive economies of scale and scope with cost advantages and better structural position. ...
... Kogut, (1985) in his work discusses how globalization forces companies to work towards attaining operational excellence through supply chain and manufacturing networks. According to Kogut (1985), MNCs derive economies of scale and scope with cost advantages and better structural position. Globalization calls for strategic flexibility, as pointed out by Johnson et al. (2008). ...
This Research aims to establish the effects of globalization on the global management of business venturing and applies case studies on MNCs. The study reveals important findings by analyzing strategic adaptations of major MNCs such as Apple Inc., Unilever, and Toyota Motor Corporation. When the strategies of these companies are examined, it is discovered that innovation, localization, and sustainability are strategic factors that define success in the global market. These findings reveal a clear understanding of the relationship between globalization and business strategies and how MNCs can manage the challenges and opportunities of today’s global business environment. This research provides recommendations for MNCs to overcome the issues and uncertainties of globalization and enhance their performance and thus can contribute to the discussion on the international business environment in the contemporary world.
... The geographical proximity of suppliers is crucial for the automotive industry as a single vehicle contains tens of thousands of parts and components, e.g., suppliers are clustered around the assembly plants in Detroit (the US) for the ease of delivery of bulky parts (Klier & mcmillen 2008). According to the European Association of Automotive Suppliers (CLEPA), a modern vehicle contains an average of 30,000 parts and each part could have been produced in 15 different countries and can contain up to 30 components (cAmpbell & pooler 2017). ...
... First, it apparently shows that physical distance has no direct effect on the sourcing of codified and less codified parts by automakers. This is generally consistent with the 'follow the customers' in overseas markets, as reported by sturGeon & vAn biesebroecK (2011) in the automotive industry but inconsistent with the importance of geographical proximity argued by Klier & mcmillen (2008). Second, there are many more observations of codified parts (with above median level of codifiability, at 1.319). ...
This methodological paper proposes two codifiability indicators to examine trade and manufacturing statistics and the spatial distribution of value-added manufacturing activities. Codifiability is defined as the level of documentation about the manufacturing processes of a product required to allow tasks to be replicated by other suppliers. First, the codifiability indicators allow researchers to examine products that are grouped under the same sub-product class in conventional statistics, but the manufacture of such products could involve vastly different technologies and thus the level of value-added. A proprietary database was used to delineate the supply networks of automakers in passenger vehicles and their major tier-I suppliers between 2000 and 2015. Second, codifiability allowed the researchers to unpack the spatial distribution of value-addedness of each supplier in the production network, as illustrated by the top two parts suppliers to the automotive industry, Bosch and Denso. The importance of codified standardized commodity parts with lower value-added in the continental European home market illustrates the importance of geographical proximity for Bosch, while the dominance of non-standardized service parts with lower level of codification and higher value-added in its exports to North America is also consistent with the ‘follow the customers’ process in the overseas market reported in the automotive industry. The relative importance of service parts with lower level of codifiability in Denso’s home market illustrates the division of labour with other cross-holding suppliers (especially Aisin and JTEKT) and thus the effects of the interlocking cross-holding of Japanese automobile and parts suppliers, which reconfirms the importance of cultural proximity in Asia’s (Japanese) supply networks.
... From the perspective of enterprises participating in the GVC, since different positions of enterprises in the GVC will result in different values (Kogut, 1985), many researchers have examined the dynamic changes of enterprises embedded in the GVC. Tang and Zhang (2018) calculated the positions of Chinese enterprises in the GVC from 2000 to 2008 and found slight rises. ...
The international division of labor has entered the era of the global value chain (GVC) due to the continuous influence of the scientific and technological revolution. At the same time, sustainable development has taken center stage in the evolution of international trade, and the export spell is an important indicator to measure the sustainable development of export trade. Based on the China customs data, the Chinese industrial enterprises database and the Chinese input-output table from 2000 to 2012, this paper uses the survival analysis method to estimate the enterprises’ export spells and calculate their positions in the GVC through upstreamness. It then investigates the impact of export spells on the position changes of the GVC enterprises. According to the paper, export enterprises near the bottom of the GVC are more vulnerable to extinction. And the duration of enterprises’ export spells has a U-shaped relationship with their positions in the GVC, which means that enterprises will continue to move downstream of the GVC as duration increases, but positions will shift upstream if duration reaches the inflection point. The mechanism test shows that the quality of export products is an important channel through which the duration of enterprises’ export spells influences their GVC positions.
... Instead, our paper addresses these gaps by combining an institutional perspective that takes into account NAEs' tendency to act as second-movers, and a meso-level perspective that focuses on the characteristics of global production networks, the multi-firm structures that determine the contours of competitiveness in most complex manufacturing sectors (Kogut 1985;Coe and Yeung 2015;Baldwin 2016). Our approach is based on two assumptions: that the organization of global production networks can take multiple forms, each with distinct strengths and weaknesses (Gereffi et al. 2005) and that the disaggregated structure of global production networks provides multiple entry points to innovation across the production chain (Breznitz 2021). ...
What determines the ability of firms based in New Advanced Economies to generate innovation in the transition to electric vehicles (EVs)? Under what conditions are they more likely to break with their established pattern as fast followers to create innovation that is new to the world? To address these questions, we introduce a meso-level framework focused on the organization of global production networks. The framework examines three aspects of such networks: the position of the firm within the network, the number of lead firms, and the links between lead firms and suppliers. We illustrate the explanatory power of our framework through the cases of South Korea and Spain, the two New Advanced Economies with the largest automotive sectors. We characterize Korea’s production network as a unipolar, captive structure and Spain’s as part of an EU-wide multipolar, modular production network. We argue that contrary to common perceptions, Korea’s structure delayed the transition to EV’s and strengthened Korea’s role as a fast follower. Meanwhile, Spain’s embeddedness in the EU production network offered significant opportunities for turnkey suppliers to generate novel innovation despite the absence of a domestic lead firm.
... As indicated above, there is extensive literature on the I-P relationship. This literature describes the conditions under which a firm that decides to implement an internationalization strategy can improve its performance (Gomes & Ramaswamy, 1999;Grant, 1987;Kogut, 1985). ...
This paper, through an analysis of the relationship between internationalization and a novel concept of performance at the firm level, sheds new light on this stream of literature, as our analysis presents a new approach by examining the internationalization-performance relationship at the firm level and arguing that this relationship is dependent on firm-specific assets. To test this argument, we use a sample of 267 manufacturing firms in Spain. We use a Bayesian stochastic frontier model with random coefficients to adequately capture the heterogeneity of resources across firms. The results reveal that the effect of internationalization on performance is heterogeneously distributed across firms. Finally, the strategic implications of these results for achieving a sustained competitive advantage by firms are discussed.
... Alongside the value-added trade analysis, the examination of FDI flows is also a fundamental component of understanding the trends of the global economy. The relevancy of FDI-analysis from a GVC perspective lies in the fact that crossborder vertical specialization activitiesi.e. firms increasing production efficiency and optimizing costs through establishing foreign subsidiaries in other countries, while keeping the control and ownership in-house, as opposed to outsourcing value chain activities to foreign contractors who are independent by ownership from the original firm (Kogut, 1985;Yi, 2003) can be most appropriately measured through foreign direct investments (Blonigen, 2005). For the sake of completeness, it needs to be noted that there is no perfect way of precisely breaking down the composition of FDI to have a clear metric for GVC-related investments aiming to build productive capacities (Kalotay-Sass, 2021). ...
The implementation of China's "reform and opening-up" policy paved the way for leveraging the country's comparative advantage in labor costs and its abundant pool of low-skilled workers to attract foreign investments and transform the country from isolation to become an integral part of the global economy. China gradually deepened its embeddedness in global value chains (GVCs) and ultimately emerged as the leading trading partner to most of the developed countries, however a shift in global sentiment and a fundamentally wavered belief in trade liberalization – initially triggered by the aftermath of the 2008 financial crisis, subsequently amplified by geopolitical tensions, protectionist policies, national security concerns and the COVID-19 pandemic – set back the pace of globalization and specifically raised concerns about the inherent risks associated with the significant reliance on China – as well as on the geographically spread production networks in general – when it comes to global production. The aim of the paper is to examine how the aforementioned events of the past decade and the lately arising call for increased resilience affected China's role and weight in global production, as well as to identify trends in the dynamics of the country's GVC participation through the combination of qualitative and quantitative methods.
... Porter's theory differentiated between a firm's internal value creation activities, emphasizing the interdependence among these activities, and the external perspective of the industry, emphasizing the connection between an enterprise's value chain and the value chains of its suppliers and buyers [16]. In the 1985, Kogut introduced the concept of a 'value-added chain,' emphasising the vertical division of labour within the value chain [17]. ...
Traditional value chains link factors of production and production to final consumption, adding economic value. To reduce the negative effects of the value chain on the environment and societies, the sustainable business model must be integrated into all parts of the global value chain. This necessitates responsible production and procurement, but all participants must recognise the importance of reusing resources, increasing the product life cycle, and minimising waste. However, this does not imply that all value chain participants in the value chain have equal responsibilities, as they have varying degrees of dominance, interests, and environmental and societal impact in their value chain-related activities. We claim that regional trade agreements are the key to balancing each other’s interests in an international value chain, assisting participants in reaching a consensus. On the other hand, existing regional trade agreements have flaws in how they distribute value. Furthermore, their standard-setting does not contribute to developing a sustainable global value chain because it ignores the impact of the sustainable business models of value chain participants on the global value chain. So, the article will focus on reconstructing global value chains by introducing a sustainable business model and using regulatory incentive systems to guide value chain participants in fulfilling corporate social and environmental responsibilities. As a result, this article discusses how a sustainable business model can aid in developing the global value chain in a sustainable direction, as well as how regulation can help.
... This notion shares certain characteristics with the concept of GVC in the future. Following that, Kogut also put up the concept of a value chain, and, unlike Porter, he saw a connection between the vertical breakdown of the value chain and the redistribution of space globally [12]. The research of Lv Yanfang, et al. put digital technologies into GVC when they first proposed the conception of digital global value chain. ...
It is a fact that as a result of the developing new round of scientific and technological revolution and industrial transformation, nations all over the world must concentrate on the digital economy if they are to seize new opportunities for development and establish new competitive advantages. Businesses now face possibilities and difficulties as they deal with a new cycle of global value chain reconfiguration. The integration of digital technology has changed how individuals participate in global value chains and how they are geographically organized. As a new economic structure, it can encourage a significant driving force for economic and social progress and is a key factor in altering a nation's competitiveness. Additionally, it dramatically alters the geographical configuration of the value chain's division of labor to facilitate the growth of digitization, services, disintermediation, and manufacturing customization. This paper examines the status of China today, the participation and development of the digital economy, as well as the role and impact of the digital economy on China's global value chain. The study mentioned above is used in this paper to draw conclusions on the uneven development of China's many regions and the lack of adequate data governance, as well as to suggest workable solutions.
... Today, innovation policies valorize technoscientific knowledge-as patents, trademarks, and scalable accumulation-while devaluing production and reproduction (Irani 2019, 36-37). As countries attempt to climb higher on the value chain, they reorganize their production to control their competitive advantage while outsourcing the rest to subcontractors, often by offshoring (Kogut 1985). Those putatively non-innovative economic activities-maintenance, production labor, and reproductive labor-are subjected to global competition that diminishes their value on the market (Irani 2019, 84 and 188). ...
What could be gained by putting science and technology studies (STS) in conversation with innovation studies (IS)? These distinct fields have shared people over decades, as they build concepts, careers, institutions, and even nations. I review how this collection offers accounts of how STS and IS have been practiced in different times and locations: resisting underdevelopment, Western and middle-class assumptions about progress, or technology-centric policy. I argue, however, that it is critical to clarify the difference between innovation as an analytic and as an emic and ideological category. Neither STS nor IS should take for granted the ways political economy, class relations, racialization and gendering, and even national(ist) ideologies shape what counts as desirable forms of newness, what newness ought to be contained or criminalized, and the hierarchies of socio-technical transformation that emerge out of that. I offer three examples: San Diego’s “smart streetlights” program where “innovation” as an ideology devalues or erases the creativity and knowledge already manifest among residents; Amazon® Mechanical Turk worker advocacy and the limits of doing scholarship with policy relevance when workers do not have organized power; and mid-twentieth-century Iran, where I show what IBM® throwing computers into the ocean can tell us about innovation as a form of enclosure, repression, empire, and waste of collective resources and knowledge.
... The labor force has the ability to adapt mature technologies (Buckley et al., 2002;Loof et al., 2002). Kogut (1985) attributes the value-added chain to labor intensity. Hendricks and Singhal (2001) find that labor-intensive firms are likely to offer more opportunities for process improvements. ...
This study examines the relation between a firm’s labor intensity and its operating performance. Using a large sample of US public firms from the period 2001 to 2018, we find that firms with a higher level of labor intensity are less likely to engage in mergers & acquisitions (M&As) activities. Our main finding suggests that a firm’s operating performance, proxied by return on assets and return on equity, decreases with a higher level of labor intensity. Further analysis shows that if labor-intensive firms engage in M&As, they are less likely to use cash and stock as payment methods and consider the target’s legal forms of business orientation. The negative relation between labor intensity and firm performance is aggravated (attenuated) by the firm’s advertising intensity (stock payment method and private target of potential M&A characteristics). Finally, labor productivity is also negatively associated with labor intensity.
... The global value chains (GVCs) revolution has reshaped trade dynamics, resulting in shifts in trade growth-development links, trade-competitiveness links, and trade-governance options [2,3]. Kogut [4] defined the value chain as a combination of production elements, including products, services, and technology, culminating in the creation of intermediate goods. These intermediate goods are subsequently assembled into final products, which go through stages of market transactions and consumer consumption to achieve a value cycle and foster the sustainable development of enterprises. ...
In contrast to the past, the trade behavior of countries has become increasingly intricate, encompassing domestic trade rooted in local markets, traditional trade centered on final exports, and value chain trade reliant on intermediate goods. To tailor their strategies to their unique circumstances, nations judiciously allocate their economic focal points across these three trade modalities, engendering distinct national development models. By discerning the varying emphases placed by countries on these three trade modes, this paper employs clustering techniques to extract and analyze divergent national development models. Additionally, this paper assesses countries’ performance in various trade activities and introduces a new indicator, Total Trade Ability (TTA), to examine the impact of these models on the economy. With our approach, one can easily distinguish how different countries develop their economies. Our findings indicate a strong correlation between economic growth and TTA. In general, countries with higher TTA tend to exhibit higher economic growth.
... Value chain activities can be generally explained to comprise the processes by which technology is combined with material and labour inputs, and then processed inputs are assembled, marketed, and distributed [29]. Although no single definition of the term "value chain" exists today, an all-encompassing description put forward by The Global Value Chains Initiative [30] states that the value chain describes the full range of activities that firms and workers do to bring a product from its conception to its end use and beyond. ...
Abstract: Recent studies on the global value chain (GVC) have highlighted the need to better integrate the value chains of developing countries of the global South with that of the global North regions, which are more highly developed. This is aimed at enhancing the economic and social sustainable upgrading of the value chains of the global South regions. The paper thus seeks to answer a critical question as to whether the existing GVC set-up pertaining to global North and South countries
is equitable and whether it would yield the needed socio-economic and wider sustainable benefits, particularly to global South countries. a conceptual Global Value Chain (GVC) model is developed based on the economy-wide and system-based Multi-Regional Input–Output methodology to achieve this goal. Subsequently, this was empirically tested to measure embodied flows in capital and labour for sustainable development between global North and South regions. These are
achieved using the GVC networks of the UK (from the global North) and some countries in sub-Saharan Africa (from the global South) to exemplify these developments. With implications for equitable, sustainable development, our study shows significant imbalances exist in the flows of value added activities from the global South to the global North, particularly in the primary industries, which produce low-value products in their raw state. Subsequently, this creates a disproportionate economic disadvantage for South countries. As such, if global South countries are to fully benefit from GVC, the study shows that these imbalances must be addressed, such as through structural changes in the economies of global South countries from their dependencies on the primary industries.
... The decision to select which segments of the value chain to specialize in, by "trading tasks" (Grossman & Rossi-Hansberg, 2008), is determined by the competitive advantage of firms. It is this complex interplay between comparative and competitive advantage that defines the firm's global strategy (Kogut, 1985a). The fact that these decisions "are based upon considerable uncertainty over future costs, market developments, and technologies" (Kogut, 1985b), is the point of departure for real options theory. ...
The economic disruptions experienced during the COVID-19 pandemic and Russia’s invasion of Ukraine have generated a narrative of resilience and deglobalization that brings the old world order into question. Heightened public attention on perceived supply chain failures has exerted pressure on governments to intervene in firm-level operations to assure supply of essential or strategic goods. This paper argues that the narrative is founded on false premises. In particular, three supply chain myths have emerged in public and academic discourse: (i) lean management has gone too far and exacerbated disruptions in global supply chains; (ii) efficient supply chains are less resilient; and (iii) foreign supply makes supply chains less resilient. We argue that these beliefs are not adequately supported by evidence. They can displace analysis to negatively impact policy and actually diminish resilience. Drawing upon IB and supply chain management research, we investigate the root causes of perceived market failures. Recommendations are for an evidence-based debate on current events and policies.
... Porter (1985) yKogut (1985) van desarrollando este enfoque, planteando que toda actividad y unidad empresarial, se encuentran inmersas dentro de un sistema mayor, donde deben interactuar con otras unidades empresariales. El planteamiento de estos autores sostiene que es el resultado de dicha interacción, la que permite generar ventajas competitivas, siempre y cuando dicha coordinación sea óptima y eficiente. ...
La producción del carbón vegetal genera una gran fuente de empleos y entrada
de flujos monetarios, reflejando para ello nuevas formas de gestión
empresarial, para una correcta toma de decisiones e implementación de las
estrategias empresariales en la búsqueda de fuentes competitivas.
Cuba que se encuentra en pleno proceso de actualización de su modelo
económico para su inserción de manera armonizada en el contexto económico
internacional, pretende aumentar el uso de la cadena de valor como
herramienta para lograr la eficiencia en el entorno de las relaciones
empresariales y lograr así un mayor encadenamiento productivo.
La presente investigación se planteó proponer un procedimiento para el diseño
de la cadena de valor del carbón vegetal, como soporte en la gestión contable
que permita el cálculo de la utilidad, en la empresa de Agroforestal de Pinar del
Rio. En el cual se fundamenta el marco teórico - conceptual relacionado con el
diseño de la cadena de valor en la industria forestal, después se procede a
diagnosticar la situación existente en la empresa de Agroforestal en cuanto a la
utilización de este instrumento, respecto al cálculo de las utilidades en la
producción del carbón vegetal, para finalmente diseñar el procedimiento en la
empresa.
El procedimiento propuesto permite calcular las utilidades a través de cada uno
de los eslabones definidos por la cadena de valor, definiendo así aquellas que
consumen más recursos que otras y cuales agregan valor al proceso.
... Hayes and Wheelwright (1984) defined it as a chain linking raw materials producers to end users. This concept is related to existing materials management (Ammer 1968;Lee and Dobler 1965) and value chains (Porter 1985;Johnston and Lawrence 1988;Kogut 1985). � Dyadic or a two-party relationship with immediate supplier: ...
Purchasing is a fundamental step of materials procurement in the construction sector, and since materials can represent up to 70% of the project's construction costs, reducing wastage and improving productivity can have big benefits, both for the environment and the economy, especially for Micro, Small, and Medium-sized Enterprises (MSMEs). This manuscript will focus on the process of purchasing materials from these companies’ perspective, seeking to investigate the impact of effective materials management on site. In light of the acknowledged absence of system thinking for MSMEs, this research aims to build a new conceptual framework that illustrates the complexity of the materials purchasing process in construction and embodies the risks linked to materials, relationships, information, and cash flows. The conceptual framework aims to influence supply management in construction and is based on the recognition of five main levels, going from the specification of materials to data management and feedback. It is designed to illustrate the sequence, logical structure, and complexities of the purchasing process. Data from the literature, followed by on-site observations, feeds into the framework.
... Therefore, the three fishery industries' interconnection occupies a crucial position in the value chain comprising fishery capture and aquaculture, aquatic products processing, and recreational fishery. Value chain theory holds that the value chain is a process of integrating production factors together to shape various input links, forming a final product through assembly and finally completing the value cycle through market trade and consumption [18]. This paper takes labor, land, capital, and technology as the input elements, and the output value and output as the output elements. ...
The efficiency change, mutual cooperation, and interaction among the three fishery industries in China can accurately reflect the level of economic development within the industry. Studying the relationships between the three fishery industries under the existing structural system is conducive to enhancing the endogenous power and steady progress of the industry. Using the DEA-Malmquist model, gray correlation, impulse response, and variance decomposition methods, this paper focuses on the specific value appreciation process of the three fishery industries, namely, fishery capture and aquaculture (primary industry), aquatic processing (secondary industry), and recreational fishery activities (tertiary industry), in order to analyze the synergy and interactive response relationship among the three fishery industries during the period of 2003 to 2020 based on the value chain. We propose specific policy suggestions regarding the overall efficiency level and integration degree of the three fishery industries. The results show the following: (1) the efficiency of fishery capture and aquaculture (primary industry) and aquatic processing (secondary industry) show significant regional differences, and the change in trend in the efficiency of recreational fishery activities (tertiary industry) is better than that of the other two. (2) Most of the synergy degrees of fish capture and aquaculture efficiency, aquatic processing efficiency, and recreational fishing efficiency, are medium and above. (3) The interactions among the efficiencies of the three fishery industries in the country and that in different regions vary. From a national perspective, the efficiency of the fishery industries can be dependent on economic inertia. There is a regional heterogeneity among the interactive responses to the efficiency of the three fishery industries in China; the interaction of fishery value chain efficiency in the four economic regions differs in both strength and direction. Exploring the synergy and interactive response among the three fishery industries in China from the value chain perspective can provide a basis for the precise governance of different regional characteristics and help to modernize the fishery industry.
... When it comes to the contribution to global strategy, an application of the ARCTIC framework goes beyond the application of VRIO resources to the operations of an individual corporation in individual foreign countries (Ghemawat 2007;Kogut 1985). Moreover, recent research (Chi et al. 2019) points out the ability to switch as another source of competitive advantage built into multinational corporation-acquired affiliates. ...
Although the interdependence between the core competencies of the collaborating partners and synergy as an important consideration when companies decide to go for a merger is theoretically understood and evident, further empirical research is needed to integrate two concepts into a coherent empirical construct. The paper aims to develop an empirical framework useful for scholars and practitioners to incorporate real options theory into resource-based views (RBV) to measure collaborative synergies of M&As. Having done the empirical research on the case study of the Souq.com acquisition by Amazon.com as one of “the biggest-ever technology M&A transactions in the Arabic world”, the paper provides a conceptual construct of research that encompasses not only Amazon.com and Souq.com but can be useful to other companies pursuing strategic growth by M&As
... On the other hand, it has squeezed the profits of enterprises and reduced their production capacity to some extent. In the short run, enterprises do not have enough funds to complete the optimal allocation of production factors and improve their position in GVC [22][23][24][25][26][27][28][29]. ...
In order to tackle increasingly serious environmental problems, China has been promoting the development of a green economy and guiding the green transformation of various regions and industries through environmental regulation in recent years. By participating in international trade, Hebei Province has been embedded in the global value chain. However, Hebei’s involvement in the high-energy-consuming and polluting manufacturing sector and its lower position in the global value chain have led to serious environmental issues. In practice, the government has promulgated environmental regulations to restrict economic activities of enterprises. What role does environmental regulation play in Hebei’s manufacturing industry’s participation in the global value chain? In order to explore the impact of environmental regulation on Hebei’s manufacturing industry in the global value chain, this paper constructs a fixed-effect econometric model based on the panel data of the embedding level of the value chain of 12 manufacturing sectors in Hebei Province. The research results show that: first, the R & D capacity of the manufacturing industry in Hebei Province still needs to be improved. Second, environmental regulation has promoted the global value chain position of Hebei’s 12 manufacturing sectors. Third, environmental regulation will show obvious heterogeneity to manufacturing industries with different capital intensities and different pollution levels. The impact of environmental regulation on the manufacturing industry with different intensities is different. Therefore, the government should formulate targeted environmental regulation to promote the position of Hebei’s manufacturing industry in the global value chain, such as further improving environmental regulation and increasing the intensity of environmental regulation and increasing the investment of human capital, and cultivating innovative talents.
... Porter [20] defined the activities of vertically integrated enterprises that can increase enterprise value as the value chain of enterprises, and analyzed the strategic links in the value chain to enhance the core competitiveness of enterprises. Kogut [21] elevated the value chain to the regional and national levels and defined it as the circular process of production factor input, product assembly and trading, laying the foundation for the construction of GVC. After connecting the theory of value chain to the global economic and industrial organizations, the relatively mature theory of Global Value Chain (GVC) was born. ...
This study takes Tianjin as an example to analyze how to build the manufacturing industry chain ecosystem. Based on the ecosystem theory, the related literature of manufacturing industry chain and value chain, and combined with various action plans for the development of manufacturing industry in Tianjin, the structure chart and construction roadmap of industrial chain ecosystem were drawn. Based on the input–output data of 42 sectors in Tianjin, this study calculated and analyzed the changes in embedment degree of various manufacturing industries in Global Value Chain (GVC) and National Value Chain (NVC) in Tianjin from 2010 to 2017. It is found that the industrial chain ecosystem is mainly composed of four elements: the enterprises on the industrial chain, the information flowing among enterprises, the goods circulating among enterprises, and the external environment of enterprises. The connection of supply and demand chains, enterprise chains, space chains and value chains forms an industrial chain, and the value chain is a crucial relationship chain in the connection mechanism. In addition, 2015 is a turning point for Tianjin manufacturing industry to embed in GVC and NVC, mainly due to the industrial economic adjustment in Tianjin, the global economic turmoil, and the establishment of the manufacturing industrial park. In terms of R&D intensity, high and medium high-tech manufacturing industries tend to be embedded in GVC, but are easily affected by enterprises and environmental factors. However, low and medium low-tech manufacturing industries still have ample space to integrate into GVC, information and products are important factors to determine the upgrading of its industrial chain. Therefore, in order to better construct the industrial chain ecosystem of manufacturing industry and enhance the industrial competitiveness of Tianjin’s manufacturing industry, it is necessary to give priority to the development of high-tech manufacturing industry, expand the international openness of low-tech manufacturing industry, support regional advantageous industries, and carry out dynamic regulation of industrial ecology.
... MFIs can design suitable policies for taking advantage of economies of scale in providing similar products and services to more number of people. Cost can be saved through replication of similar products and services (Kogut, 1985). Strategies such as-group lending scheme can be adopted to avoid failure of repayment of loans by clients. ...
The aim of the current work is to predict the impact of MFI specific internal factors on the social performance of Indian microfinance institutions (MFIs) by using machine learning techniques. Social performance index (SPI) is designed by taking data of 73 Indian MFIs for 10 years with the help of an indexing technique where six different factors (operational self sufficiency, number of women borrowers, number of rural borrowers, gross loan portfolio, average loan balance per borrower / GNI per capita and cost per borrower) representing different dimensions of functioning of MFIs are considered. The data is taken from MIX data repository. Pooled OLS regression model is used for analyzing impact of various MFI specific factors on SPI. For predicting the SPI, Artificial Neural Networks (ANN) machine learning model is considered that takes all independent variables as input. The results of regression model indicate that size, legal status, outreach and service provisions significantly affect SPI. ANN analysis result indicates that social performance of MFIs gets determined by MFI specific internal factors. The experimental result indicates that the proposed ANN prediction model is providing better result for predicting the SPI. The findings suggest that MFIs can contribute for development of the society by adopting suitable policies keeping in view certain internal factors.
... Some family firms are reluctant to internationalize as they are afraid to incur additional costs due to inexperience of the family and risk of losing their SEW that could translate into a loss of absolute control of the business (Gomez-Mejia et al., 2011). Other family firms are motivated to internationalize in their aim to diversify the risk of investing only in their home country, as well as to have access to expand their operations and therefore have access to a wider range of suppliers and customers from different contexts (Kogut, 1985). ...
This chapter examines how business families operating in a weak and complex institutional environment internationalize their business and family asset portfolios. We discuss the case of business families from the Arab Middle East. We argue that business families have unique capacities to adapt to difficult institutional environments and expand their operations to more stable institutional environments through a process of institutional borrowing and arbitrage. Business families’ internationalization approach in this context reveals a bright side of SEW where non-economic goals are catalyzing and reinforcing economic objectives.
... Another key decision linked to the configuration of the value chain is where to locate activities-in the home country or some other country or region. To make the best decision, entrepreneurs should analyze the interaction between the comparative advantages of the country and the firm (Kogut, 1985). In recent decades this analysis has led firms to disperse their value chains internationally, in search of-among other things-more competitive costs and/or higher quality resources. ...
This chapter intends to analyze and develop the concept of the entrepreneurial university and social innovation ecosystem from multiple viewpoints, including HEI regional knowledge spillover and social innovation ecosystem theoretical approaches, as well as policy and research views. The emerging perspectives of the entrepreneurial universities in the knowledge economy are considered as an instrument for “innovation and development” that acts as an elixir for the social innovation paradigm. Due to its vital position in the horizon EU strategy, respectively entrepreneurial universities and the social innovation ecosystem are gaining increasing importance in the EU’s regional knowledge-based economic growth policy discourse. Since then, they’ve been used by policymakers around the world as building blocks for executing various innovation policies, including research and innovation, smart inclusive regional knowledge growth, social innovation, industrial development, and regional development policies. The responsiveness of entrepreneurial universities and the social innovation ecosystem is envisioned in this chapter as a “facilitator” for increasing knowledge-based economic development and innovation-driven regional growth.
... Another key decision linked to the configuration of the value chain is where to locate activities-in the home country or some other country or region. To make the best decision, entrepreneurs should analyze the interaction between the comparative advantages of the country and the firm (Kogut, 1985). In recent decades this analysis has led firms to disperse their value chains internationally, in search of-among other things-more competitive costs and/or higher quality resources. ...
In the European Union, SMEs represent as much as 99% of businesses, but only 3 out of 10 companies have some international involvement. EU policy makers perceive SMEs internationalization as a desired path for global growth; thus, they have put forward certain tools which aim to boost the pace and scope of internationalization, i.e., by creating and facilitating access to support activities, sharing information, promoting cluster and networking initiatives, making support schemes consistent throughout the EU, etc. (Della Corte, Handbook of research on startegic Management in Small and Medium Enterprises. IGI Global, 2014). However, a vital point in creating a successful internationalization framework requires understanding that SMEs internationalization models may and do differ from those of multinational enterprises (MNEs). SMEs have a different structure, and they act differently, since their aims vary from those of MNEs (Knight and Liesch, Journal of World Business 51(1): 93–102, 2016; Buckley, Journal of World Business, 51(1): 74–82, 2016).
Former studies of European SMEs indicate that there are specific traits of company characteristics that determine their internationalization process. Amongst the distinguished factors, size, activities performed, age, and experience counted as the most significant determinants of the expansion. However, these findings refer to occurrences dating back at least 5 years. In the era of rapid digitalization and—still—ongoing globalization, the impact of these factors might have diminished, making place for others. Therefore, the rising importance of digitalization calls for the need to identify new barriers and opportunities for SMEs to become international.
The aim of this chapter is to see whether and how digitalization has influenced the internationalization models of Polish SMEs. We do not provide quantitative analysis that would allow us to statistically verify hypotheses on that matter; however, given the recent developments of the business world and internationalization trends, we assume that digitalization has had an impact on how companies expand abroad nowadays. The study has a screening aim and should allow us to determine whether, in the case of the Polish context, the matter requires further pursuit. The remainder of this chapter is structured as follows: first, we discuss the internationalization models which commonly referred to the international expansion of SMEs. Secondly, we discuss how digitalization can influence the process and its determinants. Finally, we present our research results based on quasi-focus group discussion with Polish SMEs. The study concerned the impact the digitalization has on the internationalization experience of those companies.
... Another key decision linked to the configuration of the value chain is where to locate activities-in the home country or some other country or region. To make the best decision, entrepreneurs should analyze the interaction between the comparative advantages of the country and the firm (Kogut, 1985). In recent decades this analysis has led firms to disperse their value chains internationally, in search of-among other things-more competitive costs and/or higher quality resources. ...
Great Transformations like the Digital Transformation and Sustainability Transformation, their challenges and their consequences for society are increasingly discussed in theory and practice. In this context, especially the issue of dealing with fundamental and profound changes in economy, politics and society is coming to the fore. In countries with liberal democratic systems such as Germany, an entrepreneurial mindset is granted an important role in dealing with these transformations in a proactive and formative way. Thus, the issue as to how more entrepreneurial individuals and organizations—and therefore more “out of the box thinking”—can systematically be tapped and developed in Germany becomes essential. To this end, this chapter proposes a newly conceptualized interdisciplinary and integrative approach, which was distinctly designed for the addressing and winning of entrepreneurial individuals and organizations in a systematic and targeted manner. Because it is specifically tailored to the prevailing circumstances and structures in Germany, the approach emphasizes enlightened, voluntary and self-sustaining actions. Doing so, it offers an effective, but also legitimate way to address and win entrepreneurial personalities and organizations to contribute to actively shaping the Digital and Sustainability Transformation.
After completing this chapter, you should be able to:
Supply chain management (SCM) is a commonly used term in business and academia, but with many different meanings, representing different perspectives and varying spans of influence and interest. This chapter traces the development of materials planning and control, purchasing and supply relationships and logistics perspectives of supply chain management to today’s more strategic, holistic conceptualisation. Supply chain management is positioned here to be a multi-systems level, strategic endeavour, integrating strategic management thinking from operations management, logistics, purchasing and supply management and industrial marketing. At its core is the transformation of resources from original sources to supply goods and services to ultimate end users. The academic field of supply chain management would benefit from greater conceptual clarity to enhance legitimacy and cohesion required for it to become a recognised discipline.
The study aimed at assessing the effect of credit terms on the performance of SMEs in Uganda, case study being Nakawa Division. The researcher used a case study research design with both qualitative and quantitative methods with a population study of 576 SMEs out of which a sample size of 92 SMEs were chosen. Using purposive and convenience sampling techniques respondents were chosen from the area and these were SMEs in Nakawa division. Both questionnaires and interview guides were used to collect data from the selected respondents. Both the primary and secondary data was used during collection of data. Data was collected by use of questionnaires, interview guides and analyzed in form of tables, graphs and pie charts. Findings revealed that interest rates have a positive effect on the performance of SMEs despite the magnitude is not very significant, E-payment has on Performance of SMEs thus implying that collateral security affects Performance of SMEs and credit terms impact on Performance of SMEs thus implying that credit terms affects Performance of SMEs to a small extent. Finally the researcher recommended that the credit providers should issue credit at low interest rates affordable to their clients, they should also not strictly base on the collateral security as a determinant for someone to access credit and they should make credit terms and conditions simply to their clients. This will encourage debtors to access credit to boost the operation of their SMEs
Cross-border investment is essential for western China’s globalization. Global value chain (GVC) forms cross-border investment networks between industries in western China and overseas cities. Focusing on GVC, this study uses the social network analysis method, entropy method, multi-index comprehensive evaluation method, and quadratic assignment procedure analysis method to examine the characteristics and influencing factors of the urban networks of research and development (R&D), production, and sales formed as a result of the overseas investments of listed manufacturing companies in western China. Results showed that the three types of investment networks involved multiple industry types and multiple central cities with differentiated diversity and multicentrality. The R&D urban network’s leading sub-industries were the mechanical equipment and instruments, medicine and biological products, and metal and nonmetal industries. The destination cities were mostly those home to educational and scientific research centers. The production urban network’s leading sub-industries were the mechanical equipment, instrument, and food and beverage industries. The destination cities were mostly regional central cities in developing countries. The sales urban network’s leading sub-industries were the mechanical equipment and instrument, metal and nonmetal, and petrochemical and plastics industries. The destination cities were numerous and scattered. In addition, the R&D urban network easily formed specialized clusters, core nodes easily controlled the production urban network, and individual nodes did not easily control the sales urban network. Technological and economic system advantages greatly impacted the three network types. Considering the different influencing factors, this study suggests optimizing the institutional investment environment to narrow the institutional gap, adjusting and optimizing the investment layout to expand overseas markets, and increasing R&D funds to stimulate technological progress and overseas investments in western China.
One of the most important questions in business partners’ collaboration is whether their strategies create a collaborative synergy and, thus, add market value. This chapter aims to develop a conceptual framework useful for scholars and practitioners to the foresight of explicit synergies and value a tacit synergy in strategic collaborative ventures. This chapter is novel theoretical and empirical contributions to foresight an explicit competence-based synergy in international alliance from the resources-based view employing the ARCTIC framework and values a tacit competence-based synergy using compound real option applications. This is the main theoretical contribution of this chapter. Moreover, this chapter makes several theoretical and empirical contributions to strategic management, international business, and corporate finance disciplines. In the end, this chapter discusses research limitations and future work.KeywordsExplicit synergyTacit synergyResource-based viewCore competenceThe ARCTIC frameworkReal optionsInternational alliance
Research Summary
We investigate how the presence of populist rulers affects foreign direct investment in democratic countries. Our analysis sheds light on the mechanisms by which this political force impacts firms' decisions, considering the effect of institutions and internationalization strategies at the firm level in the global arena. We test our theory using instrumental variables with a panel dataset of US multinationals in 37 democratic countries between 1999 and 2020. Our findings suggest that the presence of a populist ruler at the helm of government seems to undermine firms' foreign investment and it is potentially moderated by country‐level institutions and firm‐level internationalization. Collectively, our results offer new insights on how populism affects multinationals' investment decisions, contributing to the literature that examines the relationship between political pressure and investment decisions.
Managerial Summary
Investing in countries with populist rulers poses a challenge for multinationals. Populist leaders constantly threaten to abruptly change the institutions that provide certainty for foreign investments. This study argues that the presence of a populist negatively affects firms' foreign investment, moderated by institutions and internationalization strategies. The adverse impacts of populism on investment are mitigated in countries with robust institutional frameworks. In such cases, the credibility of populists' promises to alter the established “rules of the game” is lower than in countries with weaker institutions. Additionally, by expanding their degree of internationalization, firms are better equipped to navigate the lack of information generated by populist rulers. Our research provides implications for managers in assessing the risks and opportunities associated with investing in such contexts.
A central building block of the prevailing development discourse, which was and remains deeply euro- and ethnocentric, remains the debate between modernization and dependency theories. Although my observations may appear to be a truncated debate from a historical perspective, this paper emphasizes that the fundamental issues that characterized this early discussion still form an essential core to influence current questions about the scope and meaning of development that remain unresolved. The promises of industrial modernization and progress stand on shaky grounds in the face of environmental destruction and decay. The unfortunate but widely accepted label of developing countries as “backward,” as was standard in the 1960 and the 1970s, cemented a widely uncritical belief that development equates with industrial progress, which has proven to be a fatal delusion.
Research Summary
In this second collection of articles relating to global strategy, we address the well‐established but unresolved issue of the relationship between multinationality and performance among multinational firms. The M‐P relationship has been the topic of many articles in many journals for many years, but its true nature is still not established. Both theory and empirical findings provide different and often opposed views, as can be seen in the articles collected here. We see two main perspectives on this issue. Some scholars suggest that differences in data and analytical tools have prevented consistent empirical results, and that more consistent and carefully chosen empirical modeling can yet establish the true M‐P connection. Others believe that basic problems in theory and in building testable frameworks that are truly consistent with theory have made this an inherently intractable problem. The collection provides important articles that test the M‐P relationship as well as critiques from both perspectives. We see considerable power in the view that individual firms are likely to have their own idiosyncratic optimal level of multinationaliation. We finish by calling for and suggesting new approaches to the issue, such as a micro‐foundations approach, as opposed to simply using more sophisticated tools to test problematic models based on well‐established but ultimately inadequate theory.
Managerial Summary
The relationship between the level of multinational diversification and performance in multinational firms is at the heart of global strategy. If operating at ever increasing levels in ever more countries does not provide reliably superior performance, why do firms continue to expand internationally? One view suggests that since firms continue to increase their international presence, there must be some ultimate benefits—difficult as they may be to establish. The opposing view suggests that since an equal amount of research finds no such benefits, it may be that no level of multinational diversification is generally optimal, but that depending on its particular resources and capabilities, experience, industry, and national portfolio, each multinational must discover its own optimal level of cross‐border investment.
The world economy has changed in significant ways during the past several decades, especially in the areas of international trade and industrial organization. Two of the most important new features of the contemporary economy are the globalization of production and trade, which have fueled the growth of industrial capabilities in a wide range of developing countries, and the vertical disintegration of transnational corporations, which are redefining their core competencies to focus on innovation and product strategy, marketing, and the highest value-added segments of manufacturing and services, while reducing their direct ownership over ‘non-core’ functions such as generic services and volume production. Together, these two shifts have laid the groundwork for a variety of network forms of governance situated between arm's length markets, on the one hand, and large vertically integrated corporations, on the other. The purpose of this chapter is to generate a theoretical framework for better understanding the shifting governance structures in sectors producing for global markets, structures we refer to as ‘global value chains’. Our intent is to bring some order to the variety of network forms that have been observed in the field.
The evolution of global-scale industrial organization affects not only the fortunes of firms and the structure of industries, but also how and why countries advance—or fail to advance—in the global economy. Global value chain research and policy work examine the different ways in which global production and distribution systems are integrated, and the possibilities for firms in developing countries to enhance their position in global markets. We hope that the theory of global value chain governance that we develop here will be useful for the crafting of effective policy tools related to industrial upgrading, economic development, employment creation, and poverty alleviation.
Fragmentation, Coordination, and Networks in the Global Economy
For us, the starting point for understanding the changing nature of international trade and industrial organization is contained in the notion of a value-added chain, as developed by international business scholars who have focused on the strategies of both firms and countries in the global economy. In its most basic form, a value-added chain is ‘the process by which technology is combined with material and labor inputs, and then processed inputs are assembled, marketed, and distributed.
Corporate strategy refers to the decisions of a firm’s top management concerning the scope of the firm, in terms of its geographic and product markets, as well as the degree of 10.1057/978-1-137-00772-8_452. Corporate strategy defines the firm in terms of the extent of its international activities, the degree of vertical integration, and the diversity of the product markets in which it competes. Acquisitions, divestments, foreign direct investments and internal capital investments all constitute decisions that are likely to impact on the strategic scope of the firm and thus its corporate strategy.
Since the 1980s, the rapidly evolving globalization has led to the increasing integration of national economies across the world and ushered in the era of global cities. In the meantime, the rapid growth of global trade and foreign direct investment (FDI) driven by multinational corporations has reshaped the spatial structure of the global economy. On the one hand, global value chains (GVCs), which are an important feature of the current global economy, have tightened the ties between countries and cities around the world, creating huge material, information, and money flows, and changed the pattern of the world economy as well as the trade, financial and industrial ties between countries and cities.
The decision-making process reflects not only the consecutive approaches for decisions taken withinthe company, but it is the main direction to identify, develop, implement, and evaluate the business processes. The levers used to develop a strategic performance management denote the measures to reduce the riskin the decision-making process, which reflect the chance of unfavourable elements with negative consequences on the decision. In other words, the decision-making process is influenced by events or phenomenathat influence the business of modern companies, being the expression of the non-realization of the desiredprofit or loss within the economic transactions. To make a decision, it is necessary to take into account therisk of events that may have unfavourable consequences on the proposed goals, trying to avoid the risks or,if possible, to minimize them, transferring them to another implementation stage. In this article, the conceptof risks as a concept, their typologies and characteristics have been presented, from the perspective of possible financial-economic decisions in the company's business context, as well as the consequences that mayoccur. In real company practice, as a rule, the manager of a private company lacks sufficient data aboutconsiderable aspects of risk factors and thus takes decisions with delayed effects.
Nowadays world trade, investment and production are increasingly built within the framework of global value chains (GVCs), which, as the flagships of the modern economy, form the main directions and pace of development, including both developed and developing countries. China’s accession to the WTO in 2001 entailed not only the strengthening of China’s role in world trade and production, but also symbolized the beginning of China’s accelerated integration into the GVCs. Initially, China was of interest to developed countries as a location with a relatively cheap labour force, but gradually its role in the GVCs changed, and China turned into the largest exporter of intermediate and final demand products in industrial supply chains, primarily in the automotive and electronics industries. In this monograph, the authors aimed to trace kea features, trends and prospects for China’s participation in global value chains.
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