The research project investigates whether automotive component manufacturers located in South Africa are taking advantage of their participation in global value chains to functionally upgrade. Two factors, namely position in the value chain and global connectedness are assessed in terms of their effect on the propensity for firms to innovate and upgrade. Continuous pressure from value chain leaders to reduce costs coupled with increasing competition from other low-cost, developing economies means that South African automotive component manufacturers have to upgrade to improve their competitiveness and maintain their positions in the global value chain. This quantitative study analysed data collected through interviews from 76 companies in the National Association of Automotive Component and Allied Manufacturer‟s database of firms. The results support previous literature and demonstrate that indigenous innovation does occur under certain conditions. Whilst participation in global value chains seems to stimulate innovation, it does not necessarily guarantee that innovation will occur nor does it mean that innovation will automatically result in upgrading. Questions that require further investigation include among others the upgrading trajectory firms over time and a deeper understanding of the mechanisms used by innovation leaders to absorb and deploy the knowledge and technology obtained from global interactions. Copyright / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

To counteract the colonial division of labour and equalise trade relations across the global North and South, Global Value Chains (GVC) analysts have advocated value chain upgrade. Such upgrade would entail a much-needed financial improvement for Southern producers. Rather than turning to governments and IGOs, GVC analysts have generally addressed their policy suggestions to firms directly. There is an idea that firms can actively disentangle and disrupt prevalent hierarchies in their own activities. This thesis looks closer at prefigurative politics as a political strategy and asks: are prefigurative upgrade projects a successful tool for equalising trade relations across colonial divides? Can individual firms disentangle colonial inequalities in trade? As marxists and decolonial theorists have argued, global trade inequalities are about more than money: economic relations are inherently political. The 'value' in Global Value Chains should be understood not only as return on investment or profit, but also as something broader, a question of what makes a good life and a balanced division of work in society. GVC analysis has hitherto paid insufficient attention to these insights. As a remedy this thesis proposes the addition of a new concept to the GVC toolbox, voice' upgrade', i.e. an improvement of the ability of all actors in the chain to speak and listen about the political questions of value. Two case studies are used to ground the discussion: firstly, the trading of coffee from the Zapatistas in Mexico to Café Libertad in Germany. Secondly, the export of spice blends and sauces from the Western Cape of South Africa via the firm Turqle. These prefigurative projects both subvert and reproduce prevailing hierarchies. Importantly, while the former is possible,it requires deliberate facilitation.

The internationalization of Chinese companies is a new reality. This is even more innovative if we isolate Chinese private firms and in particular those having businesses in developed countries as targets. If the first internationalizations of Chinese private firms to developed countries showed us less than optimal results; the latest show mixed outcomes. Interestingly, some of the latest firms with positive results are breaking through stable and complex global value chains, such as the automotive industry, to become first tier suppliers to transnational assemblers and even acquire large and apparently more capable first-tier global suppliers in developed countries. Based on the relevant literature, namely: automotive global value chain (Holweg et al., 2009; Humphrey & Memedovic, 2003; Sturgeon & Lester, 2004; Sturgeon & Van Biesebroeck, 2011; Thun, 2001); developing countries firms internationalization (Boisot & Meyer, 2008; Buckley et al., 2007; Child & Rodrigues, 2005; Dunning, 2006b; Luo & Tung, 2007; Mathews, 2006); and Chinese business system (Redding & Witt, 2009; Whitley, 1992, 1999b; Witt & Redding, 2013a, 2013b; Zhang & Whitley, 2013); this is not expected. This is why we decided to thoroughly understand the dynamic capabilities of one of such firms. Using an in-depth case study the analysis was performed with an integrative tri- perspective approach using institutional, industrial and firm levels. The starting point was on the understanding of the dynamic capabilities that the Chinese firm had since its incorporation until become a first-tier supplier to a transnational assembler followed by its internationalisation. Delving deeper into the internationalisation of the organisation, the study analysed, using the business system framework, how the Chinese firm was able to acquire and manage its new acquisition, which had superior tangible and intangible capabilities, and successfully overcame the predictable clashes that such a setting creates. This is in line with the call for exploratory research (Deng, 2012; Meyer, 2014; Narula, 2012; Ramamurti & Singh, 2009) due to the still infancy of the problem under study, the anecdotal descriptions, and the lack of reliable quantitative data. Our findings show us a Chinese firm with specific and divergent dynamic capabilities since its incorporation, when compared with the expected and typical companies, that should have emerged from the Chinese business system. A clear focus in a unique industry associated with the ambition, yet constraints, to become a global company, combined with the necessity of an industrial upgrade, and a deliberate strategy that allowed the firm to become a turnover company of €1 Billion in less than ten years. Furthermore, the long-term vision of the group and the use of a supportive partnering strategy for the post- acquisition period has been an essential component of the firm's success. Finally, we found that the firm has been joining disperse competences and resources it was lacking, using different dynamic capabilities, by grouping and directing them into a specific well-stated vision. From a theoretical perspective, these findings are particularly important since they do not support the institutional arbitrage literature nor accommodate the current different theoretical extensions on international business literature. From an empirical sense we explain that firms are not fate to integrate in a post M&A period and describe how this can be achieved.

<p>Smallholder farmers have been at the center of the development discourse not only because they represent a significant portion of the world's extreme poor but because of their potential role in food security, climate change and gender equality. Smallholders account for 70% of global food production but most of them in the developing world operate in the informal markets. Market formalization is accelerating even in the least developed countries, however, and formal market channels are gradually displacing informal ones. Global value chain based formal markets may also offer opportunities for smallholders to tap into fast growing international markets for high value agricultural products.</p><p> One of the key challenges policymakers, the development community and agribusinesses face, however, is smallholders' limited formal organization ("producer organizations") that aggregate their production and demand for goods and services in order to enable more effective market participation ("aggregation"). Only 5-10% of farmers globally are estimated to participate in formal producer organizations. This is despite the fact that such organizations have been supported by both policymakers and the development field as a way of tackling poverty and addressing market failures. </p><p>The shift towards food production being organized based on global value chains and production networks and the fast dissemination of supermarkets and other modern food retail outlets around the world is creating increased need for smallholders to partake in some form of aggregation mechanism in order to become contributors to the global food system.</p><p>Agribusinesses that buy agricultural products have therefore also been encouraging producer organizations as a way to improve their ability to source from smallholders. Nonetheless, of the producer organizations that do exist in emerging economies, only a negligible portion have been able to achieve stable access to the growing global market of high value agricultural products.</p><p>The objective of this dissertation is to contribute to the understanding of this paradox and to identify factors that may improve the likelihood and effectiveness of aggregation. The structure of this work is as follows: first the research problem and the gap in the literature (Chapter 1) will be defined, followed by the review of existing scholarship on smallholder agricultural producers, the globalization of agribusiness and global value chains as well as the literature on the aggregation of smallholder production, producer organizations and their access to global and modern value chains (Chapter 2). </p><p>Next a conceptual framework will be proposed based on which a model for smallholder global-value-chain-relevant aggregation (Chapter 3) will be developed that takes into account the producer organization types, the services offered by the producer organizations, producer organizations' access to financing and the requirements of global value chains. </p><p>The model will be tested first using the population of Hungarian producer organizations, and then a sample of Central American and Peruvian producer organizations (Chapter 4), utilizing the following hypotheses:</p><p>1. "Collective identity narratives", manifesting themselves in Collective Identity Activities, play an important role in facilitating the growth and competitiveness of POs.</p><p>2. Services, including access to financing for farmers, provided by POs play an important role in facilitating scaling.</p><p>3. Cooperatives are at a disadvantage compared to other producer organization (PO) forms in achieving the conditions of global value chain access.</p><p>The empirical analysis has five main findings. First, because trust is so important in enabling farmer participation in collectives, shared narratives that establish collective identity may play a role in ensuring not only farmer loyalty but also may help improve producer organizations' performance, particularly as organizations grow. Second, organizations that offer more services to farmers are more likely to scale and hence achieve global value chain access. However, this study found that considerable variation among services, some having much more significant relationship to the ability to scale than others. Third, cooperatives, the producer organization form most often supported by policymakers and the development field, on average were found less effective than other forms of producer organizations in their ability to connect farmers to global value chains. Having said that, it is important to highlight that the study also identified several cooperatives and some common patterns among them that outperformed both their cooperative and non-cooperative peers. Fourth, while this study adds to the evidence that smaller farmers within the smallholder group are at a disadvantage when it comes to PO participation and may, therefore, require differentiated support when it comes to interventions, it also identified several POs that work with some of the smallest farmers and still outperform their peers. Fifth, the study found that POs' access to financing is important for modern market access, in addition to meeting quantity and quality requirements.</p><p>The policy implications of these findings are considerable and recommendations for interventions conclude the paper (Chapter 6) after the discussion of this study's limitations (Chapter 5). The key policy findings include that cooperatives are not the panacea for development and policymakers should also consider other forms of producer organizations for support. Importantly, policymakers should rather consider linking their support to certain aggregator characteristics and activities, including services offered since some services appear to have stronger relationships than others with POs' ability to succeed. Among these services access to finance for farmers as well as research and development and innovation play crucial role and therefore deserve heightened attention from policymakers while access to finance at the PO level has also been found to be important. In addition, PO activities that help build collective identity are associated with POs' productivity and ability to scale.</p><p>In terms of the arguable trade-off between sustainability and smallholder inclusion, a finding of the present work is that smallholders have the potential to achieve significantly higher productivity than their larger counterparts and their POs can successfully access modern markets as long as they are provided with the necessary support related to sustainable intensification of their production and access to capital for making the necessary investments.</p> / Dissertation

This thesis explores the mechanics of governance within several layers of participating firms in the global value chain of the automotive industry, and how new forms of governance shape the development of the Brazilian and Chinese automotive industry. In particular, it examines how the local supply firms from Brazil and China can integrate and upgrade in the globalized automotive industry. By using the global value chain (GVC) framework, the changing inter-firm dynamics between buyer and supplier are analyzed, and their impact on the indigenous supply firms from Brazil and China examined. The results highlight the role of product architecture in defining the value chain governance approach. Through the evolution of product architecture, the lead-firms can globalize their approaches to procurement and supply chain management. Moreover, the globally harmonized products allow the lead-firm to effectively restructure the global supply base to establish a globally harmonized components supply industry by internationalizing the most capable supply firms. Oligopolies along the entire GVC are consciously created by the lead firm. The dynamics of competition between supply firms are changing, as the market for integral components with high asset-specificity are merging into one global market with oligopolistic and oligopsonistic features. While some supply firms from the emerging markets have been able to utilize their business ties with western assembly firms to upgrade within the GVC, most are under pressure to be squeezed out of the GVC through increased global competition. The thesis contributes to the field of development studies by analyzing the prospects for emerging market firms to participate and upgrade in the GVC of western lead-firms. Furthermore, it contributes to the economic theory of governance by presenting evidence of forms of influence outside the realm of supplier-buyer contracts. The thesis further extends the global value chain framework by introduction a fine-tuned approach to ‘power’ as a determinant of governance.

The Indonesian manufacturing sector faces significant challenges in its attempt to upgrade and remain competitive in both domestic and global markets. Indonesian manufacturing firms are increasingly integrated into global markets via global value chain ties. Yet, little is known about how such involvement impacts upon the ability of Indonesian firms to upgrade. This study aims to understand the nature of upgrading processes within the Indonesian manufacturing sector through a comparison of the Indonesian garment and consumer electronics manufacturing firms. To gain a better understanding of upgrading processes, this study integrates the conceptual frameworks of technological capability (TC) and global value chains (GVC) in its analysis. While the GVC literature provides useful insights into the role played by global value chain leaders in assisting, or constraining, through the ways in which they govern value chain ties, the upgrading processes of local producers, the TC framework gives a valuable understanding of the role of capabilities of local manufacturing firms and their ability to undertake upgrading processes. By combining these two frameworks, this study asks the following question: what roles do governance and technological capability play in upgrading processes within the Indonesian garment and consumer electronics value chains?To address the research question, this study gathered both quantitative and qualitative data through surveys and in-depth interviews of Indonesian garment and consumer electronics firms. Firm level case studies are analysed to obtain detailed insights into the process and dynamics of upgrading, value chain governance and capability acquisition undertaken by Indonesian garment and consumer electronics manufacturing firms. Based on the evidence drawn from the survey and eleven case studies within the Indonesian garment and consumer electronics sectors, this study suggests that forms of value chain governance and types of technological capability both play important roles in upgrading processes. Furthermore, upgrading processes and dynamics take place not only in global value chains but also in domestic value chains. Insertion into domestic value chains may, in fact, promote the ability of some Indonesian garment and consumer electronics manufacturing firms to undertake functional upgrading. By demonstrating that the technological capability of the Indonesian garment and consumer electronics manufacturing firms can play an important role in upgrading especially when firms are engaged in domestic value chains but is less pronounced when firms are engaged through hierarchical ties into global value chains, the study provides a more dynamic perspective then standard studies on upgrading and value chain linkages. In terms of policy, this paves the way for a more active role of local manufacturing firms from developing countries to be recognised as contributing to upgrading processes.

The desegregation of global value chains has accelerated the development of a fabric of connectedness between firms, locations, and inventors. The modern global business world is now characterized by these connections, which serve as conduits of high value knowledge between specialist repositories, or centers of excellence. The properties of knowledge repositories are a function of the co-evolution of their constituent firms and the locations themselves. Thus, it is of great interest to scholars of international business, economic geography, and innovation studies to understand the roles and characteristics of the firms and locations that participate in global value chains. This dissertation explores the movement of knowledge from seemingly disparate locations and firms as it coalesces into ideas, and then follows the path of transformation into a commercialized product or service. In the first chapter, I laid the theoretical groundwork for the dissertation and review how the different studies contribute to the our understanding of how firm and location characteristics interact with global innovation connectedness, and vice versa. Three chapters that study innovation dynamics at within global value chains then follow. In the second chapter, I explore the characteristics of orchestrating firms, high order specialists that coordinate the movement of knowledge and activities in global value chains. With evidence from the pharmaceutical industry I find that not all orchestrating firms are created equal: a core insider group, known as “majors”, possess a unique legitimacy that enables the absorption of risk and grants access to greater resources that are required to control the value capture from market-defining innovation. In the third chapter, I discuss the interdependencies of orchestrating firms and industrial change by examining the Detroit auto cluster. I argue that the very forces that led to significant manufacturing loss in the Detroit area may also be behind the resilience of its knowledge production, a finding underwritten by significant innovation connectedness to other auto clusters. In the fourth and final chapter, I find that knowledge connectivity is a crucial driver of exploration into new technological areas, and that firms may be connected both internationally and domestically. Further, I find that the operational footprint of the firm is a vital amplifier of its connectivity efforts. / Business Administration/Strategic Management

Submitted by Adriana Alves Rodrigues (aalves@espm.br) on 2017-11-21T14:50:55Z No. of bitstreams: 1 Luis_Eduardo__Maturano_Cipolla.pdf: 1592066 bytes, checksum: d6aa39817cd4a326f137a2b23765d205 (MD5) / Approved for entry into archive by Adriana Alves Rodrigues (aalves@espm.br) on 2017-11-21T15:09:06Z (GMT) No. of bitstreams: 1 Luis_Eduardo__Maturano_Cipolla.pdf: 1592066 bytes, checksum: d6aa39817cd4a326f137a2b23765d205 (MD5) / Approved for entry into archive by Ana Cristina Ropero (ana@espm.br) on 2017-11-22T12:59:49Z (GMT) No. of bitstreams: 1 Luis_Eduardo__Maturano_Cipolla.pdf: 1592066 bytes, checksum: d6aa39817cd4a326f137a2b23765d205 (MD5) / Made available in DSpace on 2017-11-22T13:00:00Z (GMT). No. of bitstreams: 1 Luis_Eduardo__Maturano_Cipolla.pdf: 1592066 bytes, checksum: d6aa39817cd4a326f137a2b23765d205 (MD5) Previous issue date: 2017-03-31 / The process of internationalization of emerging economies´ companies, from the point of view of insertion in the Global Value Chain, is the object of study of several researchers. The companies seek insertion in Global Value Chain through capability for the international market, using several Upgrade mechanisms, among them, improvements in product, in process, or in the expansion of the technological functions in the company's activities or inter-sectoral. This dissertation´s objective is to analyze the upgrade mechanism, using as a case study the company Bodega Catena Zapata. Through knowledge´s accumulation, the company added value to its products and the interpretation of these results is presented based on the Matrix of Competences, developed by Sato and Fujita (2009). The empirical study was done through a single, multilevel, exploratory case study (YIN, 2005), in a wine company located in Mendoza, Argentina. The main contribution of this dissertation is the interpretation of the results using the Matrix of Competences of Sato and Fujita (2009) in two different moments. The evaluation was elaborated for the stage that the company was in the 1990s and in 2016, describing the company´s evolution in relation to the knowledge accumulation process. It was verified that these processes are related to the company's performance in the international market, which gradually seeks to be included in the Global Value Chain of the wine sector. / O processo de internacionalização de empresas de economias emergentes, sob o ponto de vista de inserção na Global Value Chain, é objeto de estudo de vários pesquisadores. As empresas buscam a inserção por meio de capacitação para o mercado internacional, utilizando-se de vários mecanismos de Upgrade, dentre eles, melhorias no produto, no processo, ou na ampliação das funções tecnológicas nas atividades da empresa ou inter-setoriais, dentro da cadeia de valores. O objetivo desta dissertação é analisar o mecanismo de Upgrade, usando como Estudo de Caso a empresa Bodega Catena Zapata. Por meio de acumulação de conhecimentos, a empresa agregou valor aos seus produtos e a interpretação desses resultados é apresentada com base na Matriz de Competências, desenvolvida por Sato e Fujita (2009). A empiria foi feita por meio de um estudo de caso único, multinível, em caráter exploratório (YIN, 2005), em uma empresa do segmento de vinhos localizada em Mendoza, Argentina. A principal contribuição desta dissertação está na interpretação dos resultados com o uso da Matriz de Competências de Sato e Fujita (2009) em dois momentos distintos. A avaliação foi elaborada para o estágio que a empresa se encontrava na década de 1990 e no ano 2016, para descrever a evolução da empresa com relação aos processos de acumulação de conhecimentos. Verificou-se que esses processos estão relacionados com a atuação da empresa no mercado internacional que, gradativamente, busca se inserir na Global Value Chain do setor vitivinícola

In the context of globalisation and liberalising economies, an increasing number of local firms based in developing countries and emerging markets are encouraged to internationalise their business activities and thus participate in foreign trade. Their sustained success is founded on two key factors; their ability to access potential foreign markets, and their ability to upgrade their capabilities and thus improve their positioning in global markets. This thesis investigates the internationalisation process and upgrading prospects of Indian Garment Manufacturers (IGMs). It begins by examining how IGMs gain access to foreign markets and discusses the factors that help or hinder their progress. The thesis subsequently explores the ways in which IGMs upgrade their activities to higher value-added activities and investigates the contributory factors that drive and shape their upgrading prospects. Existing studies employ the concept of ‘Diaspora networks’ or ethnic ties to explain how local firms from emerging markets are able to internationalise their business activities. These studies highlight the integral role played by Diaspora networks in enabling this internationalisation. Diaspora networks help connect local firms with foreign, world class buyers (or ‘lead firms’) using the Diaspora’s own pre-established ties and links with such lead firms. Similarly, Global Value Chain (GVC) proponents assume the upgrading prospects of these local firms can be enhanced as a result of linking up with ‘lead firms’ because of the benefits that can be derived from knowledge and technology transfer imparted through working with world class buyers. The extant literature however is vague on the internationalisation processes of IGMs. Furthermore, it does not adequately address the extent to which IGMs utilise Indian Diaspora networks to access foreign markets and to internationalise their business activities. It is also unclear what mechanisms are employed to impart knowledge from lead buyers to suppliers and to what extent the knowledge and technology transferred plays a key role in progressing IGMs upgrading activities; especially in the higher value added functions of design. This thesis contributes by addressing and shedding further light on these unresolved issues. It examines the issues using a combined approach, where theories and concepts from international business (IB) and GVC are employed in analysing the subject matter and thus allows for a more nuanced and comprehensive understanding of the issues under investigation. To explore the above themes a case study based approach was employed. Interviews were conducted with key decision makers/owners of 23 case companies. Further interviews with key industry, academic and government heads were conducted as a means of triangulation. Interviews were, in turn, supplemented with documentary evidence and published material from company websites, industry and academic journals, and newspaper articles, so as to arrive at a more comprehensive understanding of the issues in question. Findings from this study suggest that IGMs rarely use Diaspora networks to access foreign markets. Instead, the majority of IGMs have achieved internationalisation as a result of well-developed networks of formal intermediaries based in India who have facilitated connections with prospective buyers. Furthermore, their manner of internationalisation reveals IGMs tend to access foreign markets initially at a very young age and at a rapid pace. Thus process-based theories of internationalisation seem inappropriate in explaining this rapid pace of internationalisation; insights from the literature on Born Globals and International New Ventures (INVs) seem, at first, to offer better explanations. However, employing concepts such as the ‘mature’ born global and the ‘failed’ born global leads one to re-examine and reconsider these initial findings. Re-examined findings indicate that in fact maturing IGMs are realigning their internationalisation trajectories to be better positioned to take advantage of favourable domestic market conditions. These findings are better explained using a more inclusive definition of internationalisation; particularly, concepts of de-internationalisation and extra-regional expansion from the field of IB. Additional findings, related to the issue of upgrading, indicate that contextual factors, usually related to the domestic economy and the firm’s internal circumstances, play a significant role in affecting the upgrading prospects of IGMs. These findings are contrary to GVC-based explanations of what drives and shapes IGMs’ upgrading activities, which place excessive emphasis on the role of the ‘lead firm’. In particular, GVC-based assumptions regarding the knowledge and technology transfer benefits available to local manufacturers by linking with larger world class buyers or lead firms seem of limited applicability to IGMs; here, firm-specific factors seem more important in determining firm choices concerning upgrading trajectories.

This thesis deals with the globalization of production, a salient feature of the modern economy. The development of international outsourcing as a widespread business practice and the simultaneous decrease in trade and transport costs have contributed to the growth of a phenomenon known as global value chains. The main aim of the thesis is to understand how global value chains alter the location of economic activity. The thesis also studies the extent of firms' participation in global value chains and its consequences for firm performance.   The thesis consists of four papers studying the behavior of firms in global value chains. Paper 1 analyzes how production fragmentation influences the importing and exporting behavior of Swedish firms in the manufacturing sector. Paper 2 focuses on manufacturing firms in the ICT sector and analyzes the effect of global sourcing on firm performance. In Paper 3, the thesis examines deeper implications of global production by investigating whether exposure to trade raises firms' sensitivity to external shocks. The final paper in the thesis studies the location patterns of multinational firms and analyzes the effect of institutional distance on the number of multinational entries in developing countries.   A number of patterns emerge from these studies. The first is that Swedish manufacturing firms increasingly participate in global value chains by sourcing production inputs from overseas to create products for local and foreign customers. As a result, global value chains help to alter the specialization patterns of manufacturing firms. The second finding is that firms reap benefits from global sourcing in the form of greater efficiency. However, global sourcing may also raise the responsiveness of firms to negative external shocks. The final key result points to a developing trend in the location of activity in which emerging market multinational firms are becoming significant sources of foreign direct investment flows and their investment patterns challenge existing theories of multinational location choice.