The sustainability of global chain governance

Network structures and local supplier upgrading in Thailand

Sungchul Cho, Up Lim

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

Although it has been widely accepted that insertion into global production networks may play a critical role in fostering local supplier upgrading, scholars have yet to fully incorporate heterogeneous configurations of buyer-supplier relationships within networks into empirical testing. Using a representative sample of manufacturing firms in Thailand, we propose a more nuanced empirical framework that asks which features of buyer-supplier relationships are related to which aspects of local supplier upgrading. Our findings, derived from latent class analysis, show that the ways value chains are governed can exert varying effects on different types of technological upgrading. Being a multinational corporation (MNC) supplier was found to have positive effects on process and minor product upgrading, irrespective of the types of buyer-supplier networks. However, we found a more radical type of upgrading (i.e., the development of own brands) to be negatively related to insertion into 'quasi-hierarchical' or 'buyer-driven relationships', whilst involvement in 'cooperative networks' was associated with a significantly higher tendency of product and brand upgrading. Understanding this inherent relationality provides a crucial balance to previous firm-level findings, suggesting that the sustainability of participation in global value chains depends on the relational structures in which local manufacturers are embedded.

Original languageEnglish
Article number915
JournalSustainability (Switzerland)
Volume8
Issue number9
DOIs
Publication statusPublished - 2016 Sep 8

Fingerprint

supplier
Thailand
Sustainable development
sustainability
governance
Testing
Industry
manufacturing
value chain
firm
multinational corporation
effect
product
participation
analysis

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Management, Monitoring, Policy and Law

Cite this

@article{45d44c30958543f7b85b8320ff659ea3,
title = "The sustainability of global chain governance: Network structures and local supplier upgrading in Thailand",
abstract = "Although it has been widely accepted that insertion into global production networks may play a critical role in fostering local supplier upgrading, scholars have yet to fully incorporate heterogeneous configurations of buyer-supplier relationships within networks into empirical testing. Using a representative sample of manufacturing firms in Thailand, we propose a more nuanced empirical framework that asks which features of buyer-supplier relationships are related to which aspects of local supplier upgrading. Our findings, derived from latent class analysis, show that the ways value chains are governed can exert varying effects on different types of technological upgrading. Being a multinational corporation (MNC) supplier was found to have positive effects on process and minor product upgrading, irrespective of the types of buyer-supplier networks. However, we found a more radical type of upgrading (i.e., the development of own brands) to be negatively related to insertion into 'quasi-hierarchical' or 'buyer-driven relationships', whilst involvement in 'cooperative networks' was associated with a significantly higher tendency of product and brand upgrading. Understanding this inherent relationality provides a crucial balance to previous firm-level findings, suggesting that the sustainability of participation in global value chains depends on the relational structures in which local manufacturers are embedded.",
author = "Sungchul Cho and Up Lim",
year = "2016",
month = "9",
day = "8",
doi = "10.3390/su8090915",
language = "English",
volume = "8",
journal = "Sustainability",
issn = "2071-1050",
publisher = "MDPI AG",
number = "9",

}

The sustainability of global chain governance : Network structures and local supplier upgrading in Thailand. / Cho, Sungchul; Lim, Up.

In: Sustainability (Switzerland), Vol. 8, No. 9, 915, 08.09.2016.

Research output: Contribution to journalArticle

TY - JOUR

T1 - The sustainability of global chain governance

T2 - Network structures and local supplier upgrading in Thailand

AU - Cho, Sungchul

AU - Lim, Up

PY - 2016/9/8

Y1 - 2016/9/8

N2 - Although it has been widely accepted that insertion into global production networks may play a critical role in fostering local supplier upgrading, scholars have yet to fully incorporate heterogeneous configurations of buyer-supplier relationships within networks into empirical testing. Using a representative sample of manufacturing firms in Thailand, we propose a more nuanced empirical framework that asks which features of buyer-supplier relationships are related to which aspects of local supplier upgrading. Our findings, derived from latent class analysis, show that the ways value chains are governed can exert varying effects on different types of technological upgrading. Being a multinational corporation (MNC) supplier was found to have positive effects on process and minor product upgrading, irrespective of the types of buyer-supplier networks. However, we found a more radical type of upgrading (i.e., the development of own brands) to be negatively related to insertion into 'quasi-hierarchical' or 'buyer-driven relationships', whilst involvement in 'cooperative networks' was associated with a significantly higher tendency of product and brand upgrading. Understanding this inherent relationality provides a crucial balance to previous firm-level findings, suggesting that the sustainability of participation in global value chains depends on the relational structures in which local manufacturers are embedded.

AB - Although it has been widely accepted that insertion into global production networks may play a critical role in fostering local supplier upgrading, scholars have yet to fully incorporate heterogeneous configurations of buyer-supplier relationships within networks into empirical testing. Using a representative sample of manufacturing firms in Thailand, we propose a more nuanced empirical framework that asks which features of buyer-supplier relationships are related to which aspects of local supplier upgrading. Our findings, derived from latent class analysis, show that the ways value chains are governed can exert varying effects on different types of technological upgrading. Being a multinational corporation (MNC) supplier was found to have positive effects on process and minor product upgrading, irrespective of the types of buyer-supplier networks. However, we found a more radical type of upgrading (i.e., the development of own brands) to be negatively related to insertion into 'quasi-hierarchical' or 'buyer-driven relationships', whilst involvement in 'cooperative networks' was associated with a significantly higher tendency of product and brand upgrading. Understanding this inherent relationality provides a crucial balance to previous firm-level findings, suggesting that the sustainability of participation in global value chains depends on the relational structures in which local manufacturers are embedded.

UR - http://www.scopus.com/inward/record.url?scp=84990984053&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84990984053&partnerID=8YFLogxK

U2 - 10.3390/su8090915

DO - 10.3390/su8090915

M3 - Article

VL - 8

JO - Sustainability

JF - Sustainability

SN - 2071-1050

IS - 9

M1 - 915

ER -