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.     

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.     

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 link between economic and social upgrading in global supply chains: Experiences from the Southern Cone

This article uses nine case studies of global supply chains (GSCs) in Southern Cone countries to explore the extent to which economic and social upgrading are linked and spread from lead firms to their supply chain. While economic and social upgrading are found in lead firm segments throughout the case studies, the impacts on suppliers are varied. Pattern groupings enable the authors to develop a three‐part typology of development in GSCs, in the light of which they consider the roles of public policies, company behaviour and social actors in addressing developmental outcomes for GSC lead firms and suppliers.     

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.     

Upgrading,uneven development,and jobs in the North American apparel industry

In this article we examine the developmental consequences of globalization at multiple scales, using a commodity chains framework to investigate the case of the North American apparel industry. In the first section we outline the apparel commodity chain and offer a brief typology of its lead firms. In the second section we discuss the concept of industrial upgrading and describe several main export roles in the global apparel industry. In the third section we focus on the regional dynamics resulting from the North American Free Trade Agreement (NAFTA). We contrast the Mexican experience with that of countries in the Caribbean Basin to show the impact of distinct trade policies on export‐oriented development. We argue that NAFTA is creating upgrading opportunities for some Mexican firms to move from the low value‐added export‐oriented assembly (or maquila) model to full‐package production. In the fourth section we explore the unevenness of upgrading dynamics through a comparison of two blue jeans manufacturing clusters in the United States and Mexico: El Paso and Torreon. Our conclusions about upgrading and uneven development in the North American apparel industry emphasize the importance of local, national and regional institutional contexts in shaping inter‐firm networks and their development impact.     

Social upgrading in globalized production: The case of the textile and clothing industry

Vertical specialization generated by the international fragmentation of production within global networks is driven not only by comparative advantage, but also by the locational decisions of lead firms which determine the role and bargaining power of local producers in their value chain. This study examines the consequences of such specialization in textiles and clothing for 26 labour‐abundant countries from 1990 to 2007. Fixed effects regressions based on panel data reveal that the industry does not always reap the benefits of the resulting international trade integration. Rather, the authors observe a negative relationship between vertical specialization and relative real wages in the textile and clothing industry.     

上海国际金融中心建设与产业结构转型升级的互动机制研究

成熟国际金融中心的发展历程证明,国际金融中心的成长必然伴随着当地产业结构的高端化。这反映了二者之间相互促进、相互支撑的逻辑关系和内在要求,也是国际金融中心依托并服务于实体经济的根本表现。然而从上海国际金融中心建设和产业发展的实践来看,二者本质上仍然处于一种外生联系下的多重不匹配状态,从而一定程度上形成了对彼此的制约。未来深化完善二者的良性互动机制,应成为上海实践创新驱动、转型发展以及迈向全球城市目标的战略选择。     

产业升级必须关注开放性与拓展国际视野

促进我国产业升级,必须高度重视经济全球化发展的新态势,而这主要体现在3个方面:区域性合作势头增强,国际产业转移速度加快并形成多向特点;跨国公司作为经济全球化的主要载体,其全球拓展的组织形态尤其是总部形态呈现多样化。在产业升级的过程中,关注开放性和拓展国际视野应采取6项举措,即:在继续扩大对外开放中,促进产业增量升级;在国际购并中推进产业升级;在优化出口结构中带动产业升级;在创造跨国公司总部、地区分部以及功能性组织发展环境中优化产业升级;在帮助企业"走出去"的过程中扶持产业升级;在融入区域合作经济发展中支撑产业升级。     

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 Effect of Absentee Ownership on Local Employment Change

Abstract

To determine whether absentee-owned firms destabilize local economies, we examine the relationship between absentee ownership of manufacturing companies and employment change in manufacturing for 109 Pennsylvania towns. This issue arises because some earlier studies find that corporate connections through absentee-owned firms are positively related to local employment growth, whereas other work claims that locally owned operations are more stable. We attempt to reconcile these findings by arguing that absentee ownership is destabilizing only in the case of non-conglomerate firms. Our results show that absentee ownership in fact increases the closure rate of firms, thereby negatively affecting manufacturing employment change. Yet, this relationship differs by the parent company's organizational structure. Employment in branches of non-conglomerate firms is more detrimental than employment in branches of conglomerates — an important qualification of the argument that the “conglomeratization” of advanced industrial societies negatively affects communities.     

An analytical framework for urban upgrading: property rights, property values and physical attributes

In the mid-1980s, the state government of Maharashtra, India, introduced a slum redevelopment strategy in its capital city, Mumbai (Bombay). In contrast to traditional housing improvement strategies that focus primarily on legalizing the land tenure of residents, slum redevelopment is a more complex strategy. It involves the demolition of existing slums and the redevelopment of new, higher density, medium-rise apartment blocks, including, entirely cross-subsidized housing for the original slum dwellers. Mumbai's experience, documented through a single case study in this paper, illustrates that contrary to the conventional focus only on private property rights, upgrading policy must be based on a differentiated view of property rights. Furthermore, policy must also consider the property values, the physical attributes of the real property (underlying asset), and the interplay among property rights, property values and physical attributes. Second, the paper demonstrates that under certain conditions, there is a constituency among slum dwellers for complex initiatives, like redevelopment. This suggests that planners should be skeptical about popular, simplistic myths regarding low-income housing preferences. However, slum redevelopment's slow pace also implies that planners need to be cautious in their enthusiasm for redevelopment.     

Global production and local jobs: can global enterprise networks be used as levers for local development?

This article is developed out of a research project on ‘Global Production and Local Jobs’ launched by the International Institute for Labour Studies of the International Labour Organization (ILO). It identifies salient features of global production networks in the automobile, electronics and apparel industries, and discusses their implications for local industrial upgrading, jobs and development policy. The approach combines in novel forms complementary analytical frameworks such as the global value chain and industrial district perspectives, in order to highlight interactions between global and local forces in the operation of transnational production networks. Central issues revealed by this approach include: the rise of entry barriers into the most profitable, service‐intensive activities of global value chains, that reduce small firms' prospects for industrial upgrading; the uneven benefits derived from participation in global production networks at the local level; and the need for local institutions to devise policy responses through a flexible, network‐oriented approach involving a broad local constituency.     

Managing politics and storytelling: Meeting the challenge of upgrading informal housing in South Africa

Many in situ upgrade projects in developing countries fail. I tell the story of how one in South Africa (Oukasie) succeeded, both in the eyes of residents as well as the wider development community. I noticed that the residents of Oukasie managed to accomplish far more than other similar upgrades within the same timespan. Within just three years, from being ‘illegal’ and on the bucket sewage system, all households had their own water connection and toilet as well as access to a range of community facilities. The leadership of the community were getting job offers from the private-sector, and the former ‘whites-only’ town of Brits was beginning to play an integral part in Oukasie's development. I wanted to understand how this was all possible. My paper addresses this question and shows how, through using politics (e.g. political tactics and links to politicians) and storytelling, the community built a much more successful project than otherwise would have been the case. Throughout this paper I use Oukasie as a ‘model’ to demonstrate that successful in-situ upgrading is both feasible and desirable in the South African context, given the scarcity of government resources relative to the housing backlog. Oukasie, thus, becomes a vehicle for discussing a broader range of issues which are relevant to development projects in general and in situ upgrade projects in particular.     

Foreign direct investment in the former communist world: A key vehicle for technological upgrading?

Foreign direct investment (FDI) is a crucially important, though not unique, vehicle for technology transfer in the context of transition. Analysis of actual patterns of FDI does, however, reveal a serious danger—that FDI may be asset absorbing (shallow integration) rather than asset creating (deep integration), i.e. may simply exploit existing factor endowments, including technological capabilities, rather than upgrading them. While abuse of market power does occur with FDI, it should not be seen as a critical problem as long as genuine asset creation is going on. At present there is a serious mismatch between the S&T systems of the transition countries and the needs of foreign firms carrying out FDI. It would be unrealistic to expect FDI to drive the process of resolution if these mismatch.     

Bending but Not Breaking?: Foreign Investor Pressure and Dividend Payouts by Japanese Firms

This article examines the global diffusion of shareholder‐oriented governance practices, using the case of dividend payouts by Japanese firms. While Japanese firms previously retained profits for rainy days or new ventures, their dividend payouts began to increase in the 1990s, rapidly catching up with the levels prevailing in the United States. Following prior research, we focus on the role of foreign investors in this process but provide a more nuanced account of their influence, using panel data on 2,036 publicly traded Japanese firms from 1990 to 2005. First, we show that pressure from foreign investors increased dividends by Japanese firms not only directly but also indirectly, by extending the cognitive boundaries of organizational fields of Japanese firms beyond their local peers and toward their global competitors. Second, we show that although Japanese firms that remained deeply embedded in the traditional, stakeholder‐oriented governance system resisted shareholder‐oriented governance practices, even such firms yielded under pressure from both foreign and domestic investors. We conclude with theoretical implications of our findings for the literature on the global diffusion of shareholder value and its broader political and social consequences.     

The Scalability of the Shack/Slum Dwellers International Methodology: Context and Constraint in Cape Town

Shack/Slum Dwellers International (SDI) was created by the Indian Alliance and South African partners. SDI has affiliates in 33 countries and is probably the world's largest network of community peer‐to‐peer knowledge exchange in the area of slum/informal settlement upgrading. Common to the Indian Alliance's ‘Federation Model’ and the SDI methodology are a commitment to community organization and community‐led upgrading that is undertaken in partnership with local government. In a context where it is projected that there will be two billion slum dwellers by 2030, the ambition is to enable tens of millions of households to obtain upgraded housing and services. This article questions the scalability and universality of the SDI methodology in Cape Town, where the SDI Secretariat is located.     

Globalizing Firms and Small Communities: The Apparel Industry's Changing Connection to Rural Labor Markets*

Abstract This paper explores changing relationships between apparel firms and rural labor markets in Wisconsin over the last decade. Mainstream explanations of recent changes in the apparel industry suggest that rural communities will lose tedious or physically demanding, low‐skilled apparel manufacturing jobs but will gain more information‐intensive and desirable “apparel service” employment. Through case studies of apparel firms located in two Wisconsin communities, the paper argues that current changes in the industry not only affect communities unevenly but, even in regions where apparel service firms have provided significant numbers of new jobs, these jobs are less well paid, more casually structured, and less secure than manufacturing employment has been. The paper argues that current concepts of the economic embeddedness of firms in communities need to be refined to permit consideration of the kinds of leverage and voice that community organizations have in confronting new forms of corporate capital. The two case studies demonstrate that corporate embeddedness and its labor market outcomes are linked to changes in the global market in which firms compete.     

Opportunities for enhancing communication in settlement upgrading with geographic information technology-based support tools

For many residents in developing cities, informal settlements are the sole avenue of access to shelter and basic services, however poor in quality. The need to improve the living conditions in such areas is once again receiving high priority on the international and national development agendas. Current approaches to settlement upgrading favour the adoption of community-based, participatory styles of planning and management. Upgrading inevitably also requires the use, albeit in cooperation with local residents, of more traditional planning and design methods which depend in part on the ability to analyse the physical setting of a given settlement and prepare appropriate solutions to specific problems. Using several examples from informal settlements in Dar es Salaam, it will be shown how a hybrid approach to spatial data provision that incorporates both the traditional sources of spatial data and some of the more participatory approaches can be beneficial. The hybrid approach built around the use of a series of low-cost, up to date aerial mosaics provides relevant spatial data that is relevant and usable by both residents and professionals, thereby presenting opportunities for more communicative and transparent discussions between actors on possible interventions in the settlement.     

FIRMS' EXPECTATIONS ABOUT THE IMPACT OF AI AND ROBOTICS: EVIDENCE FROM A SURVEY

This study presents new evidence on firms' views about the impact of artificial intelligence (AI) and robotics on their business and employment, using data from an original survey of more than 3,000 Japanese firms. The focus of this study is on technology‐skill complementarity. Firms with highly educated employees tend to expect positive impacts of AI‐related technologies on their business, and vice versa. Larger firms and firms that engage in global markets tend to have positive views about the impacts of AI‐related technologies. (JEL O33, J23, J24, M15)