Dear friends and colleagues,  

The third issue of Global Strategy Journal in 2020 is available! It contains the special issue on Global Strategy and Global Value Chains edited by Gary Gereffi, Pavida Pananond, and Torben Pedersen.  

You can learn about the latest thinking on global value chains from the introduction (Pananond, Gereffi & Pedersen) five articles selected for the special issue (Lee, Jimenez, Yang & Song; Dindial, Clegg & Voss; Ryan, Buciuni, Giblin & Andersson; Lechner, Lorenzoni, Guercini, & Gueguen; and Murphree & Breznitz) and another two regular articles on the topic (Li & Bathelt; Torres de Oliveira, Sahasranamam, Figueira & Paul).  

The ideas are particularly useful for the current discussions on the resilience and governance of global value chains in the face of disruptions.  

Best wishes,  

Gabriel Benito, Alvaro Cuervo-Cazurra, and Ram Mudambi, Co-editors of Global Strategy Journal 



Volume 10, Issue 3 

Special Issue: Global Strategy and Global Value Chains 

 Issue Edited by: Gary Gereffi, Pavida Pananond, & Torben Pedersen 




An integrative typology of global strategy and global value chains: The management and organization of cross‐border activities 

Pavida Pananond, Gary Gereffi, Torben Pedersen 

We contend that a synthesis between the literatures on global strategy and global value chains (GVCs) is mutually beneficial. A typology of four themes—managed cross‐border activities, network optimization, bottom‐up upgrading, and strategic coevolution—illustrates the underlying concepts and mechanisms that these two approaches share in common. Our integrative typology provides an analytical framework to understand the interplay between the statics of GVC governance and the dynamics of firm strategy. Firm‐level actions are a key factor in effective GVC‐level policy making, and our framework provides a roadmap to analyze how major disruptions, such as digitalization and pandemics, affect the symbiotic relationships between GVCs and firm strategy. 

Political risk, internal versus global value chain knowledge, and subsidiary operational integration 

Jeoung Yul Lee, Alfredo Jiménez, Young Soo Yang, Yunah Song 

This study combines transaction cost economics and network learning literature to examine the moderating effect of knowledge from internal versus external local supplier on subsidiary‐level intrafirm trade within multinational enterprises' (MNEs) global value chain networks. We conceptualize knowledge in a multidimensional way, disentangling it into institutional knowledge in high‐risk countries and internationalization knowledge in all countries. Empirical results from 5,660 observations of 487 Korean MNEs (1995–2013) show that MNEs' institutional knowledge with external local suppliers in high‐risk countries has a stronger negative effect on the relationship between political risk and subsidiaries' intrafirm trade integration than with internal suppliers. Internationalization knowledge from external local suppliers in all countries also has a stronger negative effect on the relationship between political risk and subsidiaries' intrafirm trade integration than with internal suppliers. 

Between a rock and a hard place: A critique of economic upgrading in global value chains 

Miguel Dindial, Jeremy Clegg, Hinrich Voss 

Researchers have tried to understand how insertion into global value chains (GVCs) can lead to economic upgrading for the developing country firms (DCFs) involved. Many of these studies operationalize upgrading as a DCF's movement into higher value‐added activities, where the creation and appropriation of value‐added are assumed to be symbiotic. In doing so, they divorce economic upgrading from its effect on interfirm bargaining power. We address this core assumption by introducing insights from theories on power‐dependence relations. We argue that pursuing an economic upgrading trajectory can be positioned a necessary but insufficient condition for DCF value‐added appropriation. In so doing, we theoretically explicate the conditions under which an economic upgrading trajectory is likely to result in DCF value‐added capture. 

Subsidiary upgrading and global value chain governance in the multinational enterprise 

Paul Ryan, Giulio Buciuni, Majella Giblin, Ulf Andersson 

Upgrading and governance in global value chains (GVCs) have been understood mainly through studying the buyer–supplier transaction, where the supplier is typically an independent contractor from a developing economy. Little is known about how subsidiaries of multinational enterprises (MNEs) can upgrade in a GVC, whose core activities are coordinated through the “hierarchy” governance model. Using an in‐depth longitudinal single case study in the medical devices industry, we explain how a subsidiary can accomplish upgrading in an intra‐MNE GVC and, over time, increase its control of this GVC reaching a joint coordinator role for its governance. Our findings show that partaking in innovation may not be the final stage of a subsidiary's upgrading but can represent the start of a new phase that culminates with joint coordination of the GVC. 

Supplier evolution in global value chains and the new brand game from an attention‐based view 

Christian Lechner, Gianni Lorenzoni, Simone Guercini, Gaël Gueguen 

Suppliers from emerging economies have been particularly active in acquiring brands from advanced economies. We analyze changes in the global value chain (GVC) of the sports shoe industry and show how hollowing out the asset bases of brand‐holding firms through increasing outsourcing has enabled the emergence of rising power firms, as well as a new brand game and a market for brands. These developments in the GVC might be a future challenge for traditional brand‐holding lead firms. We show that managers focused on branding and distribution issues were myopic towards the strategic initiatives of suppliers. Managers need to pay attention to the potential long‐term consequences of outsourcing and offshoring activities, as suppliers could become competitors or acquirers of their order‐giving firms, leading to the question: Are we approaching a state of dual GVC leadership, or do lead firms risk being kicked out by their suppliers? 

Collaborative public spaces and upgrading through global value chains: The case of Dongguan, China 

Michael Murphree, Dan Breznitz 

How do multinational enterprises (MNEs) address host‐country challenges after the initial investment? And when does foreign direct investment (FDI) result in local upgrading? Using a study of FDI and global value chain participation in Dongguan, China, we find a mechanism in which FDI results in sustained local economic upgrading and improved MNE subsidiary performance: a collaborative public space (CPS). A CPS is a social space based on trust that enables different and divided actors to engage, sharing concerns and information in ways that they otherwise would be disinclined to consider. Using the CPS concept, we expand understanding of the effectiveness of MNE strategies in host‐country environments and the conditions in which FDI leads to change in global value chains. 



Headquarters‐subsidiary knowledge strategies at the cluster level 

Pengfei Li, Harald Bathelt 

This article examines how multinational enterprises (MNEs) leverage knowledge across clusters. Based on the geographical sources and the contextuality of knowledge, we construct a typology of four MNE knowledge strategies across space: replicating, scouting, connecting, and integrating, and take into consideration their spatial, industrial, and leadership contexts. A fuzzy‐set qualitative comparative analysis of 49 pairs of headquarters‐subsidiary linkages between Canada and China suggests that replicating strategies occur in cluster‐to‐non‐cluster contexts or in fields with a knowledge gap between the two countries, whereas scouting strategies are typical in non‐cluster‐to‐cluster investments. Connecting and integrating strategies are focused on cluster‐to‐cluster contexts. We also find that while connecting occurs in fields where knowledge is locally bounded, integrating takes place in nonlocally bounded contexts. Finally, scouting and integrating strategies are associated with home nationals as subsidiary leaders. 

Upgrading without formal integration in M&A: The role of social integration 

Rui Torres de Oliveira, Sreevas Sahasranamam, Sandra Figueira, Justin Paul 

By adopting a phenomenon‐based research approach, we examine the case of an emerging market (EM) supplier upgrading its position in the automotive global value chain (GVC) through the acquisition of a technologically advanced firm from a developed market (DM). Drawing on GVC and social integration literature, we explore the role of social integration adopted by the EM acquirer to achieve upgrading through acquisition. We develop a conceptual framework where we explain the different social integration mechanisms that EM multinationals employ before and after acquisitions to achieve upgrading. 




     Professor, International Business and Strategy, Northeastern University

     Co-editor, Global Strategy Journal

     D'Amore-McKim School of Business, 360 Huntington Avenue, Boston MA 02115, USA

     [log in to unmask]+1-617-373-6568.  

 Recent articles:

     State ownership and internationalization: The advantage and disadvantage of stateness. Journal of World Business

     State ownership and international expansion: The S‐Curve relationship. Global Strategy Journal

     Skepticism on globalization and global strategy: Increasing regulations and countervailing strategies. Global Strategy Journal

     Pro-market institutions and global strategy: The pendulum of pro-market reforms and reversalsJournal of International Business Studies

Recent books: 

     State-Owned Multinationals: Governments in Global Business. Palgrave  

     Mexican Multinationals: Building Multinationals in Emerging Markets. Cambridge University Press

     Emerging Market Multinationals: Solving Operational Challenges in Internationalization. Cambridge University Press.

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