The use of global value chain/global production network related literature in international business research: investigating the nature and degree of integration

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

We live in a world in which the production, distribution and consumption of goods and services are becoming progressively more complex, with increasing geographical spread and functional integration between economic activities (Dicken, 2015). These economic activities are undertaken within complex and geographically dispersed webs of production circuits and networks, conceptualised by a body of scholars as global production networks (GPNs) (Ernst & Kim, 2002; Coe, Dicken & Hess 2008; Dicken, 2015). Dicken (2015, p. 54) defines a GPN as ‘the circuit of interconnected functions, operations and transactions through which a specific commodity, good or service is produced, distributed and consumed’. The GPN framework has close linkages with global commodity chain (GCC) analysis, proposed by Gereffi (1994), which subsequently evolved into the global value chain (GVC) framework (Gereffi, 1999; Gereffi, Humphrey & Sturgeon, 2005). Whilst GCC analysis focused on a ‘set of inter-organisational networks clustered around one commodity or product’ (Gereffi & Korzeniewicz, 1994, p. 2), GVC exploration concentrated on value-generating activities not only for ‘commodities’ but throughout the entire production process for goods and services. In this way, GVC scholars have analysed the characteristics of value chain transactions by proposing five distinct forms of inter-firm governance based on the complexity of transactions, supply base capabilities and codifiability of production (Gereffi, Humphrey & Sturgeon, 2005). Parallel to GCC/GVC analysis, GPN scholars study the networked nature of economic activities (Dicken et al., 2001; Coe, Dicken & Hess, 2008). They emphasise that, within the changing contours of the world economy, such networks integrate firms, industries and national economies (Coe, Dicken & Hess, 2008). Therefore, GPN analysis adopts the network rather than the chain as the central unit of analysis, positing that firms are part of wider networks of globalised production (Dicken et al., 2001). In this chapter, we refer to these two bodies of literature combined as the GVC/GPN literature. Whilst the GVC/GPN literature places the chain or network at the heart of the analysis, international business (IB) scholars have traditionally been interested in firms, and particularly multinational enterprises (MNEs) (Gui, 2010). The fragmentation of economic activities and functional integration have deeply transformed the way MNEs structure and manage productive and commercial activities on a global scale (de Marchi, di Maria & Ponte, 2014). In contrast to traditional forms of vertical integration associated with internationalisation, MNEs have more recently opted to extend their organisational boundaries to form equity and non-equity based relationships with other actors operating along the value chain, such as suppliers, distributors, agents and partners (Buckley, 2016). Therefore, in order to keep pace with the rapidly shifting world economy, de Marchi, di Maria and Ponte (2014) urge for continual insights on MNEs’ changing organisational forms, internationalisation paths between outsourcing and offshoring, and approaches to knowledge management within organisations and networks. The emergence of these networked multinationals has also changed the process of value creation, and power and knowledge dynamics between MNEs and other actors in value chains (Johns et al., 2015). For this reason, a broader range of GVC/GPN actors beyond MNEs have started to gain analytical and empirical importance. The increasing interdependencies between MNEs and other actors have set the groundwork for analysing inter-firm and non-firm relationships, governance and power dynamics and the distribution of gains throughout GPNs. However, such foci of analysis have so far received insufficient attention in IB and, we would argue, can no longer be overlooked (cf. Cairns & Sliwa, 2008). Not surprisingly then, a number of IB scholars have noted potential incoherence between theoretical progress made in IB and the practical impact of recent processes of economic globalisation (Storper, 1997; Dicken et al., 2001; Dicken, 2015). Whilst IB studies are increasingly adopting network-based perspectives to study MNEs (e.g. Parkhe & Dhanaraj, 2003; Mathews, 2006) along with other actors in the network (McDermott & Corredoira, 2010; Li, Kong & Zhang 2016), the emphasis on internationalisation aspects combined with an analytical preoccupation with Western MNEs is still predominant in IB (Cairns & Sliwa, 2008; de Marchi, di Maria & Ponte, 2014). More recently, a number of IB scholars, including Giuliani and Macchi (2013), de Marchi, di Maria and Ponte (2014), and Johns et al. (2015), have called for interdisciplinary research to integrate broader dimensions of analysis into IB scholarship. In particular, they urge for the integration of GVC/GPN-related ideas. Johns et al. (2015) have pointed out numerous commonalities between the IB and GVC/GPN literatures, noting that GVC/GPN concepts can contribute to key debates and unanswered questions in IB. Based on a bibliographic analysis of IB papers published from 2005 to 2014, they furthermore recognise that IB studies have very slowly been taking up references from the GVC/GPN literature. The authors identify 75 papers published in IB journals that have either cited or mentioned the term GVC/GPN. However, a more in-depth, qualitative examination of these papers was beyond the scope of their study. The purpose of this chapter is to build on and extend Johns et al.’s (2015) work by examining the nature and degree of integration of GVC/GPN-related articles cited in IB research. The focus is on the analysis of papers published since the mid-2000s in IB journals. We also examine the disciplinary origin of the authors as this is an important factor in the discussion of idea migration and integration. To undertake this analysis, we adopt Cairns and Sliwa’s (2008) perspective on the boundaries of IB. They suggest that, in order to critically engage with the nature of contemporary IB, it is necessary to study IB processes as a network of power relations. They furthermore warn against viewing IB as a ‘value-free activity of a purely economic nature’ (p. 162), urging scholars to understand the power dynamics of different forms of networked relationships and the impact of MNEs’ economic activity on other GVC/GPN actors. Subsequently, they call for broadening the boundaries of IB beyond the analysis of MNEs alone, by drawing upon neighbouring disciplines to solve key debates in IB whilst opening up possibilities for alternative structures and forms of IB. In view of that, Cairns and Sliwa (2008, p. 5) adopt a broader ‘stakeholder-based approach’ in order ‘to take account of the different actors involved in and affected by IB’. Rather than (Western) MNEs alone, they consider all stakeholders within the boundaries of IB, such as suppliers, linkage firms, industries, employees, consumers, broader society and the natural environment. In this chapter, we utilise Cairns and Sliwa’s (2008) stakeholder-based perspective of IB to identify the degree to which the GVC/GPN literature is adopted in IB studies. The contents of this chapter are structured as follows. The first section presents a brief literature review on how the IB literature has evolved and taken shape over the ten-year period since the mid-2000s, along with how GVC/GPN studies can contribute to contemporary IB. The second section outlines the methodology of the systematic bibliographic analysis performed here. The third section discusses the findings regarding the nature of GVC/GPN integration into IB studies. This section also investigates the relationship between the authors’ disciplinary backgrounds and the level of integration. The final section concludes with a summary of key findings along with recommendations for future research.

Bibliographical metadata

Original languageEnglish
Title of host publicationThe Routledge Companion to the Geography of International Business
EditorsGary Cook, Jonathan Beaverstock, Jennifer Johns, Frank McDonald, Naresh Pandit
Place of PublicationLondon
PublisherRoutledge
Pages258-296
ISBN (Print)9781138953345
Publication statusPublished - 2018