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The stabilising effects on GVCs of multi-annual supply contracts between leading and subordinate firms: The example of champagne
[Les effets stabilisateurs sur la CGV des contrats pluriannuels d’approvisionnement entre firmes leaders et firmes subordonnées : l’exemple du champagne]

Author

Listed:
  • Hervé Lanotte

    (REGARDS - Recherches en Économie Gestion AgroRessources Durabilité Santé- EA 6292 - URCA - Université de Reims Champagne-Ardenne - MSH-URCA - Maison des Sciences Humaines de Champagne-Ardenne - URCA - Université de Reims Champagne-Ardenne)

  • Aurélie Ringeval-Deluze

    (REGARDS - Recherches en Économie Gestion AgroRessources Durabilité Santé- EA 6292 - URCA - Université de Reims Champagne-Ardenne - MSH-URCA - Maison des Sciences Humaines de Champagne-Ardenne - URCA - Université de Reims Champagne-Ardenne)

  • Erick Pruchnicki

    (UML - Unité de Mécanique de Lille - ULR 7512 - Université de Lille)

Abstract

Analyses in terms of GVCs generally consider that the sharing of value is more favorable to leading firms than to subordinate firms, which may in turn lead the latter to adopt upgrading strategies with the aim of capturing a larger share of the value. However, by means of a dynamic model, we show that multi-annual supply contracts in the champagne industry, by favoring downstream investments of the leading firms (the houses), make it possible to create a higher value which, if it is partially transferred to the subordinate firms (the growers) via a higher price of grapes, contributes to stabilizing the organization of the industry by limiting the upgrading strategies of the latter. We thus contribute to the developing literature on GVCs and, in particular, to the question of value creation and distribution between leading and subordinate firms.

Suggested Citation

  • Hervé Lanotte & Aurélie Ringeval-Deluze & Erick Pruchnicki, 2022. "The stabilising effects on GVCs of multi-annual supply contracts between leading and subordinate firms: The example of champagne [Les effets stabilisateurs sur la CGV des contrats pluriannuels d’ap," Post-Print hal-04021392, HAL.
    • Handle: RePEc:hal:journl:hal-04021392
    DOI: 10.4000/rei.11118
    Note: View the original document on HAL open archive server: https://hal.science/hal-04021392
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    References listed on IDEAS

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