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Co-location with marketing value activities as manufacturing upgrading in a COVID-19 outbreak era

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  • Shih, Yu-Yuan
  • Lin, Chih-An

Abstract

Co-location has been a relevant topic in the international business literature, yet the extant literature focuses on the co-location of research and development (R&D) and production activities and overlooks marketing value activities. Marketing innovation is an agile and effective way to respond to crises such as the COVID-19 pandemic, and many manufacturers in global value chains aim to upgrade functionally following the trajectory of the OEM-ODM-OBM. Thus, this study proposes the co-location of marketing activities as a flexible and organizational learning strategy for manufacturing upgrades, and explores the antecedents of marketing co-location in foreign direct investment (FDI) decisions. The proposed research framework was examined using survey data from 343 Taiwanese manufacturing firms in China, which were drawn from a database compiled by Taiwan’s Ministry of Economic Affairs in 2020. The results show that the breadth of international experience, linkage to R&D, marketing as a primary knowledge source in the host country, upgrading for local demands, and new product development for global supply are all positively associated with the co-location of marketing and production functions. Additionally, it was found that there was a negative association between FDIs that had been impacted by COVID-19 and marketing co-location. The findings provide valuable theoretical, practical, and strategic insights into how firms should manage their global value chains with respect to marketing co-location in case of another crisis.

Suggested Citation

  • Shih, Yu-Yuan & Lin, Chih-An, 2022. "Co-location with marketing value activities as manufacturing upgrading in a COVID-19 outbreak era," Journal of Business Research, Elsevier, vol. 148(C), pages 410-419.
    • Handle: RePEc:eee:jbrese:v:148:y:2022:i:c:p:410-419
    DOI: 10.1016/j.jbusres.2022.04.060
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