Are Multinationals and Governments from Emerging Economies Configuring Global Value Chains in New Ways?

Claes Alvstam, Inge Ivarsson, Bent Petersen*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Purpose: The hallmark of today’s global value chains (GVCs), still dominated by multinationals from advanced economies, is a sophisticated international division of labor based on scale economies and prevailing factor endowment differences between countries. However, GVCs led bymultinationals from large emerging economies may be configured on the basis of considerations that supplement factor cost efficiencies, namely, those of societal objectives as formulated by political actors in the home country. In this context, the purpose of this paper is to examine the implications of political and socio-economic factors on GVC configuration of multinational firms.Design/methodology/approach: This paper provides an in-depth case study of a leading Chinese car manufacturer, Zhejiang Geely Holding Group (ZGH) and its value-chain configuration, with a special focus on the acquisition of Volvo Car Corporation. Findings: The authors show how ZGH’sconfiguration of its GVC, including that of acquired Volvo Car Corporation, takes place in symbiosis with political actors. The advantages and disadvantages of this symbiosis are highlighted. Research limitations/implications: The study focuses on GVC configuration of one company, ZGH, in one industry, the automotive industry, in one emerging economy. The external validity of the study may therefore be limited. Furthermore, the focus is on the geographical/locational configuration of GVCs and ignores the ownership aspects. Originality/value: The paper provides novel empirical evidence to better understand GVC configuration of multinational firms from emerging economies.
Original languageEnglish
JournalInternational Journal of Emerging Markets
Number of pages20
ISSN1746-8809
DOIs
Publication statusPublished - 7 Mar 2019

Bibliographical note

Epub ahead of print. Published online: 7. March 2019

Keywords

  • China
  • Automotive industry
  • Emerging economy multinational
  • Global value-chain configuration
  • Political embeddedness

Cite this

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title = "Are Multinationals and Governments from Emerging Economies Configuring Global Value Chains in New Ways?",
abstract = "Purpose: The hallmark of today’s global value chains (GVCs), still dominated by multinationals from advanced economies, is a sophisticated international division of labor based on scale economies and prevailing factor endowment differences between countries. However, GVCs led bymultinationals from large emerging economies may be configured on the basis of considerations that supplement factor cost efficiencies, namely, those of societal objectives as formulated by political actors in the home country. In this context, the purpose of this paper is to examine the implications of political and socio-economic factors on GVC configuration of multinational firms.Design/methodology/approach: This paper provides an in-depth case study of a leading Chinese car manufacturer, Zhejiang Geely Holding Group (ZGH) and its value-chain configuration, with a special focus on the acquisition of Volvo Car Corporation. Findings: The authors show how ZGH’sconfiguration of its GVC, including that of acquired Volvo Car Corporation, takes place in symbiosis with political actors. The advantages and disadvantages of this symbiosis are highlighted. Research limitations/implications: The study focuses on GVC configuration of one company, ZGH, in one industry, the automotive industry, in one emerging economy. The external validity of the study may therefore be limited. Furthermore, the focus is on the geographical/locational configuration of GVCs and ignores the ownership aspects. Originality/value: The paper provides novel empirical evidence to better understand GVC configuration of multinational firms from emerging economies.",
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Are Multinationals and Governments from Emerging Economies Configuring Global Value Chains in New Ways? / Alvstam, Claes; Ivarsson, Inge; Petersen, Bent.

In: International Journal of Emerging Markets, 07.03.2019.

Research output: Contribution to journalJournal articleResearchpeer-review

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