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In-house production versus specific forms of supplier governance: testing predictions of the global value chains model

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  • Alexander Schmitt
  • Johannes Van Biesebroeck

Abstract

Carmakers interact in their supply chain with virtually all manufacturing industries. Using a novel dataset on sourcing transactions that contains links between buyers and suppliers for sourcing contracts of individual components, we show that multiple forms of relationship governance can coexist within a single industry. We first show that three characteristics of transactions that have been used to rationalise observed sourcing patterns in the global value chains (GVC) literature - complexity, codifiability and supplier capability - also predict whether components are outsourced or not. More importantly, the same characteristics help explain how carmakers choose to structure supply relationships differently depending on the situation.

Suggested Citation

  • Alexander Schmitt & Johannes Van Biesebroeck, 2017. "In-house production versus specific forms of supplier governance: testing predictions of the global value chains model," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 17(1), pages 26-50.
    • Handle: RePEc:ids:ijatma:v:17:y:2017:i:1:p:26-50
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    Citations

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    Cited by:

    1. Pham, Hanh Song Thi & Petersen, Bent, 2021. "The bargaining power, value capture, and export performance of Vietnamese manufacturers in global value chains," International Business Review, Elsevier, vol. 30(6).
    2. Johannes Van Biesebroeck & Alexander Schmitt, 2022. "Testing predictions on supplier governance from the global value chains literature [Using hostages to support exchange: dependence balancing and partial equity stakes in Japanese automotive supply ," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(1), pages 89-111.
    3. McWilliam, Sarah E. & Kim, Jung Kwan & Mudambi, Ram & Nielsen, Bo Bernhard, 2020. "Global value chain governance: Intersections with international business," Journal of World Business, Elsevier, vol. 55(4).
    4. Calabrese, Giuseppe Giulio & Manello, Alessandro, 2018. "Firm internationalization and performance: Evidence for designing policies," Journal of Policy Modeling, Elsevier, vol. 40(6), pages 1221-1242.

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