Search results

This paper aims to examine the relationship between economic upgrading (implementing higher value-added activities) and social upgrading (improvements in workers’ rights and employment) of supplier firms in global value chains (GVCs) governed by multinational enterprises (MNEs). This paper answers Buckley and Ghauri’s (2004) and Buckley and Strange (2015) calls to incorporate other theoretical approaches within the international business (IB) literature. Furthermore, the paper also responds to Lee and Gereffi (2015) argument, published in Critical perspectives on international business, of the need to incorporate the social impact of upgrading in the IB literature.

Semi-structured interviews were undertaken with representatives from five supplier firms each in Bangladesh and Sri Lanka, as well as with industry representatives.

Governance patterns within GVCs can create the conditions for economic upgrading leading to social upgrading achievements. Institutional factors also affect the conditions for social upgrading. Although moving to higher value-added activities is critical for supplier firms, this does not necessarily lead to social upgrading. This paper’s research findings suggest that the combination of economic and social upgrading is positively associated with suppliers manufacturing high value-added products and operating in relational networks. In contrast, economic upgrading, by itself, was limited to those firms manufacturing low value-added products, typically those in captive networks.

This research is among an emerging body of literature seeking to integrate the GVC literature with the IB field. Importantly, it also contributes to the GVC literature by providing insight into an under-theorized aspect – the relationship between social and economic upgrading.

The purpose of this paper is to introduce the global value chain (GVC) approach to understand the relationship between multinational enterprises (MNEs) and the changing patterns of global trade, investment and production, and its impact on economic and social upgrading. It aims to illuminate how GVCs can advance our understanding about MNEs and rising power (RP) firms and their impact on economic and social upgrading in fragmented and dispersed global production systems.

The paper reviews the GVC literature focusing on two conceptual elements of the GVC approach, governance and upgrading, and highlights three key recent developments in GVCs: concentration, regionalization and synergistic governance.

The paper underscores the complicated role of GVCs in shaping economic and social upgrading for emerging economies, RP firms and developing country firms in general. Rising geographic and organizational concentration in GVCs leads to the uneven distribution of upgrading opportunities in favor of RP firms, and yet economic upgrading may be elusive even for the most established suppliers because of power asymmetry with global buyers. Shifting end markets and the regionalization of value chains can benefit RP firms by presenting alternative markets for upgrading. Yet, without further upgrading, such benefits may be achieved at the expense of social downgrading. Finally, the ineffectiveness of private standards to achieve social upgrading has led to calls for synergistic governance through the cooperation of private, public and social actors, both global and local.

The paper illuminates how the GVC approach and its key concepts can contribute to the critical international business and RP firms literature by examining the latest dynamics in GVCs and their impacts on economic and social development in developing countries.

Despite substantial economic upgrading, Bangladesh’s apparel industry remains confronted by claims of precarious working conditions. This paper aims to understand the challenges of achieving social upgrading and whether benefits of economic upgrading can transfer to workers and their dependents through social upgrading.

Semi-structured interviews were undertaken with 90 participants from six apparel firms in Bangladesh. The interviews were conducted following the Rana Plaza disaster.

The results suggest that social upgrading has not occurred to the same extent as economic upgrading. Social upgrading has been compromised in part, by the tiered factory system operating and a lack of governance within the lower tier firms.

Single country and one industry constitute the main limitations of this research. Future research could include multiple countries and industries to allow for greater generalization of findings.

The paper provides new insights on how social upgrading might be compromised within the global value chains context and its impact on developing country supplier firms, workers and their families.

The purpose of this paper is to investigate the intended and unintended consequences of compliance and auditing pressures in the Bangladeshi garment industry. To explore this issue the authors draw on three medium-sized suppliers. The institutional changes that followed the Rana Plaza accident in April 2013 make Bangladesh in general and the garment industry in particular an interesting and suitable research setting for standards compliance.

The study adopts a multiple case study approach. Face-to-face interviews have been conducted with the owners of three Bangladeshi garment manufacturing firms and several workers. Additionally, organisational documents and local newspaper articles had been collected wherever possible.

The results indicate that the pressure for compliance has led the case companies to prioritise the implementation of measurable standards over the socially grounded needs and priorities of workers. As a consequence certain initiatives instead of adding new social value in fact destroyed previously existing social value. Furthermore, the pressure for compliance created the necessity to find ways to cover the sizable cost of compliance. This prompted firms to pursue process upgrading through technological advancements and increased work pressures on the labour force. These initiatives led to an increased power imbalance and the exclusion of unskilled workers from the job market.

The paper contributes to the understanding of the human rights implications of compliance and auditing pressures and initiatives. Furthermore, in order to further enrich existing knowledge in the critical accounting literature, the study draws on insights from the global value chains (GVC) and international business (IB) literatures.

The paper contributes to the understanding of the human rights implications of compliance and auditing pressures and initiatives. Furthermore, in order to further enrich existing knowledge in the critical accounting literature, the study draws on insights from the GVC and IB literatures.

The purpose of this paper is to investigate the relevance and contradictions of development aid in crafting governance responses for enabling long term social upgrading in global garment value chains. Since governance responses are multilevel, we propose to analyse the interrelation between the global and the local level through the case study of a private regulatory initiative of a new type: the Accord on Fire and Building Security in Bangladesh, operationally run like a development aid programme. We aim at explaining the reasons why it has been banned from operating in the country.

We use the framework of the Global Value Chain (GVC) approach since it is operationally used in development aid and has broadened its focus to investigating the link between economic and social upgrading. It further helps to understand multilevel and multiactor governance responses. Using multiple secondary sources we describe the context in which the Accord emerged, explore its provisions and operations, and analyse the contestation pertaining to its termination. We analyse the Accord both as a global governance tool and a field-level development aid actor that addresses social issues in GVCs.

As an ILO led operational programme, the Accord, since its inception, has proven globally effective at improving workplace safety for many workers. However it has been resented for being hegemonic and, as a governance tool, it has neither succeeded in addressing the flaws of private regulatory initiatives nor changed existing power relationships in GVCs.

The early termination of the Accord has not yet been analysed. In light of this, we propose new insights on the rising role of development aid in private governance responses.

Upgrading in global value chains (GVCs) has become a crucial strategy for enhancing competitive advantage and attaining higher profitability, especially among firms in developing countries. Drawn from the sociological approach, this study treats GVC upgrading as an entrepreneurial act and examines factors affecting firms' intention to move up in their chains based on the theory of planned behavior. The authors also further test the moderating effects of firms' knowledge about rule of origin and governmental supports on the intention-behavior gap.

In-depth interviews with eight Vietnamese business managers were implemented to support the development of hypotheses and measurement scales. Afterwards, the authors conducted a survey on decision-makers of 402 Vietnamese firms which currently have export-import activities to collect quantitative data for testing the hypothesized relationships.

The empirical results indicate that both attitudes, behavioral control and social norms have significant positive impacts on the intention to upgrade in GVCs. In turn, such intention could further activate actual behaviors to move up in their chains. However, those who have better knowledge about rule of origin and receive governmental supports either in terms of finance, credit or technology have a higher probability of demonstrating actual behavior to upgrade in GVCs once their intentions are formed than those who do not.

This research provides valuable implications for policymakers in accelerating firms' actions to upgrade within their chains, hence, actively enhancing not only organizational performance but also significantly contributes to the national economic development.

While most of the previous studies examine the preconditions for firms to participate and upgrade in their GVCs, there is limited attention on determinants of firms' own intention and actual behavior to upgrade in their chains once they have participated in the GVC. Specifically, this research not only contributes to the existing knowledge regarding factors affecting firms' intention to upgrade in their chains but also closes the gap between the intention and the actual GVC upgrading behavior.

The discourse on global value chains (GVC) is undergoing a transformation in terms of its conceptualisation, theorisation and pragmatic applications. Today, the production systems have become more complex as global economic order continues to witness marked geo-economic manoeuvring. Thus, the direction of discourse on GVC ought to move from mere theoretical propositions toward becoming more evidence based. There have been recent studies that have used the governance and upgrading propositions by Gary Gereffi and others to seek quantitative evidence. This study aims to decipher the quantitative discourse on GVC and to set the emerging and future research agenda.

Through a systematic literature review, the authors first analyse the quantitative studies on GVC carried out during the last two decades. The authors then outline a future research agenda and examine a few relevant modelling techniques that could potentially be used to solicit newer evidence in GVC research.

The authors categorise the quantitative discourse on GVC into three crucial themes, namely, GVC framework, GVC participation and position, environmental aspects and regionalisation in GVC. The most commonly used quantitative techniques are gravity model, panel data estimation, structural decomposition analysis and computable general equilibrium modelling.

This paper contributes to the GVC discourse in two ways. Firstly, the authors argue that the theoretical frameworks within the GVC discourse should be complemented by evidence-based quantitative studies. Secondly, the authors suggest potential modelling techniques that can be used on the emerging and future research agenda.

The paper seeks to review the literature on CSR in industrial clusters in developing countries, identifying the main strengths, weaknesses, and gaps in this literature, pointing to future research directions and policy implications in the area of CSR and industrial cluster development.

A literature review is conducted of both academic and policy‐oriented writings that contain the keywords “industrial clusters” and “developing countries” in combination with one or more of the following terms: corporate social responsibility, environmental management, labor standards, child labor, climate change, social upgrading, and environmental upgrading. The authors examine the key themes in this literature, identify the main gaps, and point to areas where future work in this area could usefully be undertaken. Feedback has been sought from some of the leading authors in this field and their comments incorporated in the final version submitted to Corporate Governance.

The article traces the origins of the debate on industrial clusters and CSR in developing countries back to the early 1990s when clusters began to be seen as an important vehicle for local economic development in the South. At the turn of the millennium the industrial cluster debate expanded as clusters were perceived as a potential source of poverty reduction, while their role in promoting CSR among small and medium‐sized enterprises began to take shape from 2006 onwards. At present, there is still very little conceptual and empirical work that systematically investigates the linkages between industrial clusters and CSR in developing country contexts. Hence, the authors recommend that future work in this area should focus on conceptually developing and empirically testing “cluster and CSR” impact assessment methodologies in Asia, Africa, and Latin America. This will provide insights into whether joint CSR interventions in clusters bring about their intended consequences of improving economic, social, and environmental conditions in the South.

This article is likely to be the first systematic review of the literature on industrial clusters and CSR in developing countries.

Public policy to promote corporate social responsibility (CSR) can be a tool used by the state to promote the creation of social value by multinational enterprises (MNEs) and their global suppliers. Yet, this aspect has been little explored in the literature on social value creation in international business. While there is a substantial literature on the interactions of public and private regulation of firm behaviour in the global economy, little is known about the emergence of local institutional environments aimed at creating social value from MNE activities. This paper aims to address this gap in the literature.

Conceptually, the paper draws on the literatures on global production networks (GPNs) and on institutional approaches to CSR to grasp the local institutional environment for social value creation in MNEs and their suppliers. Empirically, the case of China is examined based on a review of literature, policy documents and interviews. The key questions the paper seeks to address is as follows: How can the emergence of local Chinese CSR standards be explained? How does the emergence of such CSR standards fit into wider policy objectives in the context of Chinese export-oriented growth?

The paper argues that the emergence of CSR standards in China needs to be seen in the context of changing industrial policy objectives to enhance both the social and economic value of participation in GPNs. Specifically, the evolution of Chinese CSR standards corresponds to a shift from structural towards functional coupling in GPNs, associated with increased policy attention on enhancing local skills and technology. Taking the case of the textile and apparel sector as an example, the paper illustrates how the adoption of China’s first CSR management system has taken place in a context of shifting strategic coupling objectives.

A lack of data does not allow any conclusions on the impact of the Chinese institutional environment on social value creation and economic upgrading at firm level. This question could be addressed in further research. In addition, the findings open new questions around possible synergies between local policies and MNE efforts on sustainability. Increasing cooperation between Chinese and international standard setters around CSR opens the question of whether this leads to a convergence of horizontal and vertical governance on sustainability in the apparel GPN.

Findings show that there may be a window of opportunity for international practitioners to seek further dialogue with Chinese actors around promoting socially and environmentally sustainable business in a global economy.

The paper contributes to a better understanding of changes in the institutional environment for social value creation for MNEs and their suppliers in a key emerging economy. It illustrates how institutional approaches to CSR and the GPN framework can be combined to grasp the institutional environment for social value creation in an international business context.

In developing countries like Tanzania, gems and jewellery industry mainly consists of disintegrated and unstable micro and small workshops which operate in a way that misalign value addition processes. This study is aimed to bridge gap by focussing on exploitation of industrial clusters in social normalisation and economic resilience to developing countries. The world economic shocks has been not only individually experienced but also globally shared while disrupted lives across all countries and communities and negatively affected global socio-economic growth.

Furthermore, the explorative design was adopted in this study in order to explore needs of respondents, and with the aim to direct the study towards a descriptive design. The sample frame consists of participants in gems and jewellery activities in Tanzania whereby sample was drawn from Dar es Salaam and Arusha. Semi-structured interview was used to collect quantitative data to establish evidence of Tanzanians’ SSJs linked to global value chains (GVCs).

Results revealed the benefits of exploitation of artisanal industrial clusters to Tanzanians’ SSJs when linked to global value chains (GVCs). Findings of the study demonstrate the importance of artisanal industrial clusters in facilitating Tanzanians’ SSJs to access GVCs. Further, insufficient education, trust and social protection directly affects inclusive GVCs, inferring that the impact of artisanal industrial clusters on inclusive GVCs in social normalisation and economic resilience.

Study findings reveals shortcomings in existing regulatory framework of linking Tanzanians’ SSJs to artisanal industrial clusters, for improvements to better support the inclusiveness in GVCs. Findings of this research invite interventions on institutional capabilities and entrepreneurial competencies to enhance the capabilities of small-scale jewellers (SSJs). Like other studies, this study involved cross-sectional data, limit targeted study population as representative of SSJs in industrial clusters and GVCs in economic crises at limited time.

The study findings makes important practical contributions to the Tanzania’s SSJs by examining mediating role of artisanal industrial clusters hence informing policymakers of mining sector how to improve accessibility on GVCs by focus on offering great institutional capabilities and entrepreneurial competencies. These findings will help SSJs and policy makers to get better understanding of the relationships in exploitation of artisanal industrial clusters when accessing GVCs. Therefore, they can make better decisions on implementing artisanal industrial clusters as well as management accessing GVCs, so that SSJs will attain the best possible performance.

This emphasises the importance of community empowerment in the GVCs process through artisanal industrial clusters. Study findings indicate the influence of industrial relations to social dynamics which are previously inadequately addressed and scantly researched. In actual fact study propose initiatives that ensure local communities benefit socially from the integration of SSJs into GVCs through artisanal industrial clusters. Findings suggest local communities that take into account inter-sectionality of artisanal industrial clusters and inclusive GVCs, by considering how factors like education, trust and social protection status intersect to influence the social inclusiveness of SSJs.

There is limited evidence of linking Tanzanians’ SSJs to GVCs in social normalisation and economic resilience and few researchers have explored this topic. This article leverages exploitation of industrial clusters in normalisation and economic resilience to developing countries such as Tanzania as way of improving shared prosperity, sustainability, inclusive growth, cohesion, value chain upgrading and financial inclusion to SSJs.