Social upgrading and cooperative corporate social responsibility in global value chains: the case of Fairphone in China

In this article, we explore how a lead firm's strategy for corporate social responsibility influences the social upgrading of a supplier in a global value chain. Based on a single case study approach, we investigate the interaction between Dutch smartphone producer Fairphone and its Chinese supplier Guohong. On the one hand, the case illustrates how a cooperative approach to corporate social responsibility can lead to progress in suppliers' social upgrading. In particular, we highlight the role of a so‐called workers' welfare fund as a mechanism not only for improving measurable labour standards but also for enabling rights. On the other hand, the case demonstrates how the limited production and technological capabilities of the suppliers, a competitive market environment and lead firms' limited strategic access to the supply chain might constrain the extent of social upgrading through a cooperative approach towards corporate social responsibility in a global value chain.     

The role of local stakeholders in transforming economic upgrading into social upgrading in Ethiopian textile and garment firms

The authors examine the links between economic and social upgrading in a developing country with stringent industry policy and employment legislation, focusing on the strategies of local firms participating in global apparel production networks. Based on the 2015 case studies of five textile and garment firms in Ethiopia, they find that employment security and physical well-being were driven mainly by government labour regulations negotiated by local employers, workers and trade unions rather than by global buyers and conclude that upgrading and downgrading can occur simultaneously within a firm.     

Global decisions versus local realities: Sustainability standards,priorities and upgrading dynamics in agricultural global production networks

Voluntary sustainability standards (VSSs) in global production networks (GPNs) have grown significantly in prominence. Existing research largely assumed that VSSs create linear upgrading outcomes for all GPN actors and has studied VSSs from the point of adoption in the GPNs, rather than a broader range of stages in their lifecycle. To address these limitations, and building on literature around power and agency in GPNs, we develop the constellation of priorities (CoP) model to unpack the diverse and often diverging boardroom (Northern lead firm) and local (Southern supplier) priorities involved in such standards. Through in-depth fieldwork on horticulture in Kenya and cocoa in Nicaragua across the VSS lifecycle, we find significant divergences in priorities between farmer groups in both countries and lead firms in the UK and Germany. We demonstrate analytically and empirically that diverging priorities coupled with power asymmetries produced contestations, leading to simultaneous economic and environmental downgrading, and social upgrading.     

Strategic coupling,cross-scalar tension and local upgrading in the globalizing automotive industry in Guangzhou,China

This paper examines how latecomer firms manage to achieve industrial upgrading through strategic coupling with global lead firms in automotive production networks. Drawing upon the example of the Guangzhou Automotive Corporation in southern China, this paper theorizes ‘cross-scalar tension’ as a key factor to explain why the four cases of strategic coupling between lead firms, the same domestic firm and state ended in different results, from decoupling to a sustainable coupling with local upgrading. This paper contributes to the pertinent literature by demonstrating that cross-scalar tension is inherent to the nature of global production networks, and unreconciled tension concerning different corporate strategies on technological transfer, localization and product development could lead to decoupling. Importantly, good coordination and matching on corporate strategies between lead and domestic firms could relieve cross-scalar tensions, thus fostering local industrial upgrading and sustainable strategic coupling.     

Oligopolistic suppliers,symbiotic value chains and workers' bargaining power: labour contestation in South China at an ascendant global footwear firm

In this article, I analyse changes in the power relationship between lead firms, manufacturers and workers by examining a strike that took place in South China in 2014 among workers at the Taiwanese footwear giant, Yue Yuen. In the process, I demonstrate that there is a link between increased labour costs, capital consolidation and greater value capture at the bottom of the global supply chain. I argue that footwear value chains are seeing a falling level of monopsony power and the emergence of enormous oligopolistic suppliers, which are transforming the power imbalances of global supply chains towards a more mutually dependent ‘buyer–producer symbiosis’. The Yue Yuen strike shows a maturing industrial working class, facing pressures on social reproduction in China, adapting its bargaining strategies vis‐à‐vis the developmental state. Influxes of profit raise the ceiling for what can be demanded of employers, stimulating those same employers to pursue more aggressive means of holding onto their profits. The example of the Yue Yuen strike is an indicator of what are fundamental changes in the production process, dynamics within the value chain, and power and agency of workers in labour‐intensive production. The strike demonstrates that consolidation is playing a decisive role in shaping the power relationship between domestic manufacturers and transnational brands, which, in turn, is directly affecting the bargaining power of workers.     

Power and its sources in the governance of global value chains: The Argentina–European Union biodiesel value chain

This paper tackles the broader question of why inequality along global value chains (GVCs) tends to remain unchallenged despite the successful upgrading and insertion of firms operating in the world-system's periphery. Because the reduction and reproduction of inequalities are both intimately connected to power relations along GVCs, such relations are at the core of my analysis. Conceptually, my theorization of power builds on recent work by Dallas, Ponte and Sturgeon, which has sought to more systematically theorize and account for the multidimensional nature of power, and complements it with key insights drawn from World-Systems theory. Empirically, this paper analyses the biodiesel GVC between Argentina and the European Union, a case in which the successful economic upgrading and enhanced competitiveness of biodiesel producers in Argentina fail to overturn their subordinated position vis-à-vis European producers and traders.     

Defining the co-operative difference

The paper argues that co-operative firms play a set of roles in market economies, based on the co-operative values and principles that are rarely noted in economic literature. Among other, those roles are to internalize market externalities, to serve as laboratories for social innovation, to espouse social entrepreneurship, to promote ethical business practices, and to aid in development. While economic literature has been focused primarily on the ownership and control structure as a source of the difference, we argue that this focus paints an incomplete picture. The principles of co-operation may supply additional insights in addressing questions why co-operatives may thrive in areas of low labour mobility, prevalent market failures, oligopoly markets, and labour intensive industries. They may also offer insights into strategies and survival in global markets of successful co-operative firms.     

Networks,firms and upgrading within the blue‐jeans industry: evidence from Turkey

Abstract Since the late 1980s, industry characteristics, country‐specific contingencies and international conditions have come together and turned Turkey into a major exporter of jeans. It now has a 6.5 per cent share of the world's market. In this article, I explore this transformation and point out that it has created, especially in the 1990s, significant upgrading opportunities for Turkish firms. A large number of Turkish manufacturing firms are now full‐package contractors for a diversified list of brand‐name jeans. Some of these manufacturers are also experimenting with functional upgrading by developing their own brands and selling them abroad. Local firms, despite their subordinate position in the value chain, can go beyond low value‐added manufacturing and encroach on the core competencies of lead firms.     

The International Evolution of Italian and Chinese Districts: What Role for Lead Firms?

The paper stresses how Italian and Chinese small and medium enterprises (SMEs) internationalize according to different approaches. Indeed, in the former case firms may move abroad because they follow the so-called lead firms that act as a meta-national body, whereas in the latter case SMEs are committed to exports and/or FDIs through a thick and wide web of ethnic networks. These are based on factors such as embeddedness and social capital as well as other cultural determinants.     

AN EFFICIENCY EXPLANATION FOR WHY FIRMS SECOND SOURCE

Firms facing research costs and demand uncertainty may engage in second-sourcing, in which potential suppliers agree to pool production facilities. I show how sellers and buyers both can benefit from the practice. Second-sourcing allows firms to meet a wider range of possible rates of demand and often to supply a given rate of demand at a lower total cost than under non-cooperation. Buyers benefit through a reduced probability of stock-outs and frequently a lower purchase price. Semiconductor industry data are found to be consistent with the paper's predictions.