Domestic value chains as stepping stones to global value chain integration

Identifying the determinants of global value chain (GVC) integration is essential to understand the past expansion and current slowdown in GVCs. In this paper, we study the role of domestic value chains (DVCs) for GVC integration. In the presence of industry‐specific fixed costs of fragmenting production and of switching across input suppliers, DVCs can either be stepping stones or stumbling blocks for subsequent GVC entry. Focusing on backward linkages, that is, the sourcing of intermediates, we provide robust empirical evidence in favour of the stepping‐stone hypothesis. In our benchmark specification, a one standard deviation increase in DVC integration raises subsequent GVC integration by about 0.4%. To identify the mechanisms at work, we exploit two dimensions of industry‐level heterogeneity: product differentiation (a proxy of fragmentation costs) and relationship specificity (a proxy of the costs of switching between suppliers). We find that DVC integration is less conducive to GVC integration in industries that are characterised by relatively high switching costs and relatively low fragmentation costs.     

Asian firms and the restructuring of global value chains

Asian trans-national garment manufacturers are transforming the structure of global value chains in the apparel industry. Recent studies show such first tier suppliers undertaking a greater range of functional activities. In many cases, these firms originate from the so-called ‘Rising Power’ economies, particularly ‘Greater China’ and South Asia. We argue that such, transnational, Asian firms can play a pivotal and strategic role in shaping the geography and organisational restructuring of the global value chain. Drawing on secondary sources and primary research we illustrate how such firms manage complex international production linkages, and ensure the incorporation of Jordan into the global garment industry. The paper contributes to the understanding of the role of these firms and how their behaviour is driven by complex dynamics linked to their own business strategies, their linkages with buyers, and their ability to exploit production and trade opportunities while maintaining high levels of global locational flexibility.     

Applicability of global value chains analysis to tourism: issues of governance and upgrading

Tourism firms are increasingly integrated in value chains that often operate across many different countries. As a result, the concepts and the methodology of the global value chains begin to be applied to the tourism industry. This paper aims to explore the applicability of this methodological approach for a specific service industry, such as tourism. It pays particular attention to the impact of different patterns of governance within global tourism value chains on the possible forms of upgrading. First, a set of regional case studies carried out on this subject leads us to identify the main patterns of governance in the Andalusian tourism industry. Secondly, an empirical analysis allows us to consider in which way upgrading can vary according to the governance patterns.     

Determinants of the adoption of HRM practices in tourism SMEs in Spain: an exploratory study

This paper explores the relationship between the adoption of HRM practices in Small and Medium-sized Enterprises (SMEs) and the characteristics of the firm and the person responsible for HRM. We propose a conceptual model based on the resource-based view, which is tested with quantitative data from 164 tourism’s SMEs in Catalonia (Spain). As predicted, the adoption of HRM practices is positively associated with the presence of an HRM department. Also, SMEs in which the person responsible for HRM has previous experience in similar positions are greater adopters of HRM practices. Finally, SMEs which cooperate with other organizations are more likely to implement HRM practices.     

Impact of exchange rates on ASEAN's trade in the era of global value chains: An empirical assessment

ABSTRACT

Exchange rate risk remains a key concern for export-oriented economies in Southeast Asia. Traditionally, export performance is thought to be adversely affected by exchange rate appreciation and high exchange rate volatility. Nonetheless, in the context of global value chains where export production relies heavily on imported inputs, the trade effects of exchange rate may be weakened. Using the OECD-WTO Trade in Value-added (TiVA) database, this paper seeks to tease out the association between exchange rate movements, volatility and aggregate exports of goods and services among ASEAN economies. More importantly, it investigates whether integration into GVCs affects these relationships. Applying panel regression techniques to a sample of eight ASEAN countries over the period 1995–2011, we found that high share of foreign value added (FVA) embodied in exports almost completely offsets the negative effect of an appreciation in the real effective exchange rate (REER) on real gross exports. At the same time, high FVA share also dampens the negative association between exports and increased REER volatility.     

The bargaining power,value capture,and export performance of Vietnamese manufacturers in global value chains

This study examines the payoff of various initiatives taken by Vietnamese manufacturers to increase their bargaining power relative to global buyers and capture a larger share of the value generated in global value chains. The study focuses on functional upgrade initiatives (i.e., product development, after-sales services, distribution, and promotion) and negotiation process initiatives (i.e., market intelligence and improvement of negotiation skills). A structural equation modelling method is used to analyse the data collected in 2017 from 354 Vietnamese manufacturers inserted in global value chains. The study finds that all initiatives, except after-sales services, significantly strengthen the manufacturers' bargaining power, which, in turn, enhances their export performance.     

Firms' efficiency and global value chains: An empirical investigation on Italian industry

This paper investigates the effect of participation in global value chains (GVCs) on firms' efficiency and explores heterogeneity in this impact across different firms, according to GVC governance, positioning in the chain and time length of participation. Our analysis takes advantage of survey data providing information on involvement in GVCs for a large set of Italian industrial SMEs between 2008 and 2012. We employ Data Envelopment Analysis (DEA) to retrieve a measure of firms' technical efficiency (i.e., DEA efficiency scores) and estimate the impact of involvement in GVCs on firms' efficiency through propensity-score matching techniques and truncated regression. Our results show that participation in GVCs induces significant efficiency premia, especially for suppliers, with stronger effects in the case of relational modes of participation.     

Stuck at the bottom: Role of tacit and explicit knowledge on innovation of developing-country suppliers in global value chains

We take a social exchange theoretical perspective of innovation to develop and test a model of the intervening role of tacit and explicit knowledge exchange in explaining innovation of developing-country suppliers in non-equity-based global value chains (NEGVCs). Results of structural equation modelling for a sample of Bangladeshi suppliers embedded in apparel NEGVCs show that tacit and explicit knowledge fully mediate the associations between network competence and both low value-added and high value-added innovation contingent on the quality of network relationships. We also found that both tacit and explicit knowledge contribute more to low value-added innovation than to high value-added innovation. The managerial and policy implications of our findings as to why developing-country suppliers in NEGVCs are stuck in low value-added activities are fully discussed.     

Nurturing International Business research through Global Value Chains literature: A review and discussion of future research opportunities

This article offers a comprehensive and systematic review of the literature on Global Value Chains (GVCs). The GVC framework has received growing attention in the last decade, providing theoretical concepts and analytical tools to understand and assess patterns of value creation in view of the new international division of labour. In this area, a broad overlap of research interest exists with the international business (IB) literature. Yet, few interactions between the two fields of study have been recorded so far. Performing a quantitative content analysis on all academic publications on GVCs in the period 1994−2018, this paper describes the evolution of GVC studies, emphasizing points of contact and potential synergies with the IB literature. It also identifies research opportunities along the four key dimensions of the GVC framework: geographical and industrial scope, governance, upgrading, and institutional context.     

Internationally leading SMEs vs. internationalized SMEs: Evidence of success factors from South Korea

Previous studies on the internationalization of small and medium-sized enterprises (SMEs) have typically compared the performance of internationalized SMEs (I-SMEs) with that of non-internationalized SMEs. However, not all I-SMEs can successfully lead the international market either unless they should consistently strive to attain and maintain competitive advantages. Thus, this study aims at identifying success factors which influence efforts of I-SMEs to lead international markets as internationally leading SMEs (IL-SMEs). To examine the success factors of the IL-SMEs, in this paper, IL-SMEs are specifically defined as I-SMEs which occupy dominant positions in the international market, i.e., ranking among the top three worldwide. The results based on a sample of 88 South Korean SMEs including 18 IL-SMEs and 70 I-SMEs indicate that 18 factors (out of 47 factors) show significant differences between IL-SEMs and I-SMEs in terms of customer relations/service, technological innovation, and corporate strategies. Also, by factor analysis and logistic regression analysis, three factors influencing the success of IL-SMEs are identified in the perspectives of technological innovation (R&D) and international marketing (customer satisfaction and demand quality/scope). Surprisingly, internationalization strategies and external markets have no relationship with performance of IL-SMEs. These results provide important implications to policy-makers interested in the sustainably international competitiveness of SMEs.     

Industrial policy in the era of global value chains: Towards a developmentalist framework drawing on the industrialisation experiences of South Korea and Taiwan

In this paper, I present a framework for GVC-oriented industrial policy that merges the so-called GVC perspective and the so-called developmentalist perspective—the latter of which is a perspective that industrial policy is most often analysed through, but has been somewhat neglected by the GVC perspective. I argue that the GVC perspective too quickly dismisses the relevance of industrial policy in the East Asian development experience, particularly those in South Korea and Taiwan between roughly 1960 and 1990. By drawing on the industrialisation experiences of these two countries, my framework for industrial policy suggests that the GVC perspective's ideas for industrial policy would be strengthened by more clearly acknowledging the continued importance of three observations by the developmentalist perspective: (a) the need for governments in developing countries to bargain with foreign investors for the purpose of domestic industrialisation; (b) policy design should not only focus on increasing exports, but also focus on replacing some imports with domestic production; and (c) linking up to the value chains of transnational corporations based in high-income countries can bring about some benefits, but ultimately, successful industrialisation necessitates a degree of competing with transnational corporations. State-owned enterprises have historically played an important role in this respect.     

An investigation of B-to-B brand value: evidence from manufacturing SMEs in Taiwan

Purpose: The importance of brand value has been increasingly recognized in business-to-business (B-to-B) marketing settings. Leek and Christodoulides (2012) proposed a comprehensive B-to-B brand value framework based on qualitative examination, which has yet to be quantitatively examined. As such, the objectives of this study are twofold: first, to quantitatively investigate Leek and Christodoulides’ (2012) B-to-B brand value framework and reveal the relative importance of the various attributes/elements; second, to explore whether the attribute/element priority in Leek and Christodoulides’ (2012) value framework differs for various types of buyers with respect to supplier characteristics, environmental factors, and situational factors. The research context is small- and medium-sized enterprises (SMEs) in Taiwan. For industrial marketers, a better understanding of attribute/element priority pertaining to brand value is helpful in terms of marketing efficiency and success probability.

Methodology/Approach: Based on data from 22 SME buyers in Taiwan, a cluster analysis was performed to classify SME buyers into different buyer groups based on supplier characteristics, environmental factors, and situational factors, while an analytic hierarchy process was used to indicate the preference structure under different buyer groups.

Findings: The results reveal that the functional value items outperformed emotional value ones; further, quality, technology, and after-sales service were the top three elements of brand value. However, the attribute/element priority varied across different buyer groups. In general, the importance of functional value items was greater than that of emotional value items for most SME types. Top attributes/elements that exceeded 10% importance weight were almost all function-related, aside from emotion-related credibility—the primary concern (20.3%) of forced SMEs that held pessimistic perceptions regarding the economic environment, and procured within a highly concentrated market structure.

Originality/Value: This research study contributes by indicating the relative importance of brand value attributes/elements in the SME context and examining whether the attribute/element priority varies for distinct types of buyers. Based on the results, a target marketing strategy is provided for B-to-B marketers to effectively design marketing offerings and create brand value for their business buyers.     

我国中小企业现状分析与发展对策研究

中小企业对国民经济的发展起着十分重要的作用。为保证我国中小企业健康、稳定、持续发展,必须从建立中小企业创新机制、构建中小企业良好的融资环境、提升中小企业的国际竞争力等方面制定我国中小企业的发展对策。     

中小企业应收账款质押融资模式中的道德风险研究

应收账款质押融资作为供应链金融较常见的融资模式,是解决中小企业融资难的有效途径。该模式的风险因素包括信用风险、道德风险、法律风险和行业风险。其中道德风险主要由银企之间信息不对称引起。博弈论分析表明,道德风险受核心企业的监督意愿、银行和核心企业的监督成本以及对违约企业的惩罚力度的影响。     

Best value supply chains: A key competitive weapon for the 21st century

All executives would like their organizations to perform better, and most seek ways to make that happen. This paper focuses on how supply chains — the series of activities through which products and services are created and then distributed to customers — can enhance firm performance. For the last couple of decades, most firms have emphasized maximizing speed or minimizing costs within their supply chains. In the current business landscape, however, a broader approach is needed. We describe the main advantages of developing best value supply chains as a tool for enhancing performance. These chains differ from traditional chains in important ways. Best value supply chains are used by organizations as a central element of strategy, not simply as a means to move materials. Rather than focusing primarily on speed or cost, best value supply chains are designed to deliver superior total value to the customer in terms of speed, cost, quality, and flexibility. Our contention is that organizations that develop best value supply chains will enhance their performance. We support this contention with examples from leading firms that reflect a best value approach.     

Linking inward/outward FDI and exploitation/exploration strategies: Development of a framework for SMEs

The purpose of this paper is to examine the relationships between exploitation/exploration strategy and foreign direct investment (FDI) involving small and medium-sized enterprises (SMEs). Drawing on qualitative data collected from 45 FDI projects reported by 38 SMEs in a small open economy (SMOPEC), we develop an empirically grounded framework and research propositions that suggest inward FDI (into the SME) is associated with exploration driven by a strategic asset-seeking motive, and outward FDI (by the SME) is associated with exploitation driven by market and efficiency-seeking motives. Further, for the SMEs in this study, ambidextrous exploration and exploitation appear complementary and co-occur either simultaneously through an inward FDI project, or sequentially through separate inward and outward FDI projects, respectively. Our findings, however, reveal a lack of clear sequencing between inward and outward FDI, in contrast to previous research that has conceptualised inward FDI as a strategic means to achieve outward FDI. Implications for theory, practice and policy are discussed.     

Managing knowledge work in Asia Pacific contexts: case studies of Hong Kong SMEs

This study explores how knowledge creation and sharing practices are fostered in a sample of small- and medium-sized enterprises (SMEs) in Hong Kong. Our analysis indicates that three types of managerial interventions – initiating intervention, reinforcing intervention and aligning intervention – are particularly useful to promote knowledge management activities among employees. Such findings provide insights into researchers and managers on the important role of managerial interventions in knowledge management (KM) as well as the idiosyncrasies of KM in SMEs in Chinese societies.     

Corporate Governance and Strategic Change in SMEs: The Effects of Ownership,Board Composition and Top Management Teams

This paper investigates how governance mechanisms affect the ability of small- and medium-sized enterprises (SMEs) to introduce strategic change. Previous research typically assumes that governance mechanisms operate independently of each other. Building on agency theory and insights from the literature on small firm governance, we hypothesize that governance variables related to ownership, the board of directors and the top management team all affect strategic change and that it is important to examine the interaction effects of these governance mechanisms. Using a longitudinal sample of over 800 SMEs, our general logic and hypotheses are supported by the analyses. We find that closely held firms exhibit less strategic change than do SMEs relying on more widespread ownership structures. However, to some extent, closely held firms can overcome these weaknesses and achieve strategic change by utilizing outside directors on the board and/or extending the size of the top management teams. Implications for theory and management practice in SMEs are discussed. All three authors have contributed equally to the paper. Their names are listed alphabetically.     

Credit granting to small firms: A Brazilian case

Transaction costs limit the supply of credit to small and medium-sized firms (SMEs). From a sample of 65,535 SME credit proposals submitted to a large Brazilian bank between January 2004 and September 2006, this research analyzes credit granting decisions. Results suggest that small firms face credit rationing and that low risk credit contracts with liquid collateral are their primary source of credit. Also, the bank captures private information through its lending relationships with borrowers, which affects its credit granting decisions. The findings reveal that the bank under study faces difficulties in expanding the supply of credit to small firms mainly because of cost, collateral-dependency and constraints due to asymmetric information.