GVC and GPN

Question 1

World System Theory (Frey)

Answer 1

World system and globalization can be described as (ecological unequal exchange). The world system consists of: core, semi-periphery and periphery.

Wealth flow from the periphery and accumulation in the core, leading to environmental and socio-economic consequences

Displacement of anti-wealth (waste and hazardous production) flows from the core to periphery zones.

Question 2

Industrial cluster

Answer 2

(horizontal interaction) firms and organizations engaged in similar activities within spatial boundaries → reduce TC, nurture trust and informal networks → flow of information, skills, and knowledge
Collective efficiency: scale and scope economics and joint actions

Question 3

Upgrading typology

Answer 3

Process upgrading: transforming inputs into outputs more efficiently or re-organizing production systems or introducing superior technology.
Product upgrading: moving into more sophisticated product lines or increased unit values.
Functional upgrading: acquiring new functions in the chain or increase the overall skill content of activities.
Intersectorial upgrading: Applying acquired competencies in a different sector (economies of scope)

Question 4

Characteristics of global production

Answer 4

• Globalization of production and trade -> disintegration of production -> re-integration of trade
• Fine slicing of the value chain -> shifting towards vertical integration -> reduced ownership of non-core activities

Question 5

GVC governance structure

Answer 5

Market based: simplistic products, low switching, and high cost competition

Modular governance: supplier produces according to buyer specification

Relational governance: characterized my mutual dependence, high degree of supplier capability, and asset specificity

Captive governance: small supplier, limited bargaining power, and limited capabilities being dependent on buyer. Relationship with asymmetries in information and bargaining power.

Hierarchical governance: completely vertical integrated firm often lacking competent suppliers for complex products

Question 6

Chain governance for sustainability (Bush)

Answer 6

In chains: firm as chain actors aiming at improvements e.g. though managerial systems. Often limited to one node of the chain with no direct spillover to others

Of chains: one firm exercising control over others. Demands travel up (or down) the supply chain.

Through chains: broad level of governance involving the chain firm actors and other actors collectively steering towards sustainable production

Question 7

Issues with upgrading (Ponte)

Answer 7

• It is important to distinguish between upgrading at the level of firms, sectors, and countries
• It is important to distinguish between upgrading process and upgrading outcome
• Fallacy of composition: supplier face pressure to upgrade (in terms of cost, quality, delivery time etc.) -> early mover reap the benefit -> setting a new status quo -> no additional benefit

Question 8

Chain governance and interfirm strategies (Havice and Camplimg)

Answer 8

Four firms strategies which work within a model of chain governance dominated by lead firms:

1. Intrafirm coordination (Internationalization)
2. Interfirm control (lead firm organized externationalization)
3. Interfirm partnership (collaboration, co-evolution and joint development of a lead firm and its strategic partners for competitive advantages)
4. Extrafirm bargaining (negotiation and accumulation between firms and extra firm actors around value capture).