Testing predictions on supplier governance from the global value chains literature

Testing predictions on supplier governance from the global value chains literature

Journal article

0960-6491 (Print) 1464-3650 (Online)

A vast empirical literature analyzes the determinants of the make-or-buy decision. How to organize supplier relationships when the buy option is chosen has received much less attention. The global value chains framework provides testable predictions on the nature of buyer–supplier collaboration. We use a unique transaction-level dataset of outsourced automotive components to study carmakers’ choices between four distinct types of supplier governance: market, captive, relational, or modular. The theory formulates predictions based on three characteristics: the complexity or contractibility of a transaction, the capabilities in the supply base, and how objectively codifiable performance requirements are. Our results illustrate that sourcing relationships vary systematically and that the effects of proxies for the three characteristics are in line with the theory.

Industrial and Corporate Change INCC 2022, 31(1), 89–111

Oxford, UK : Oxford University Press, 2022.

eng

https://academic.oup.com/pages/using-the-content/citation

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