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Exploring the relationship between upgrading and capturing profits from GVC participation for disadvantaged suppliers in developing countries
Author(s) -
Choksy Umair Shafi,
Sinkovics Noemi,
Sinkovics Rudolf R.
Publication year - 2017
Publication title -
canadian journal of administrative sciences / revue canadienne des sciences de l'administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 48
eISSN - 1936-4490
pISSN - 0825-0383
DOI - 10.1002/cjas.1455
Subject(s) - disadvantaged , leverage (statistics) , developing country , argument (complex analysis) , business , agency (philosophy) , industrial organization , product (mathematics) , face (sociological concept) , economics , economic growth , sociology , social science , biochemistry , chemistry , geometry , mathematics , machine learning , computer science
The existing literature on global value chains (GVCs) suggests that functional upgrading is a key determinant of whether suppliers are able to capture higher profits in GVCs. However, it is unclear whether the same argument holds for disadvantaged suppliers who face high barriers to achieving functional upgrading. Through a review of existing empirical studies, the present paper aims to explore how disadvantaged suppliers in developing countries increase their profits in the face of barriers to functional upgrading. The findings from the literature analysis suggest that the ability of disadvantaged suppliers to benefit from GVC participation depends on the extent of their managerial agency and their ability to leverage multiple upgrading/downgrading trajectories (whether product, process, or functional) and transform them into profitable outcomes. Copyright © 2017 ASAC. Published by John Wiley & Sons, Ltd.