Claes Alvstam, Inge Ivarsson and Bent Petersen
The hallmark of today’s global value chains (GVCs), still dominated by multinationals from advanced economies, is a sophisticated international division of labor based on scale…
Abstract
Purpose
The hallmark of today’s global value chains (GVCs), still dominated by multinationals from advanced economies, is a sophisticated international division of labor based on scale economies and prevailing factor endowment differences between countries. However, GVCs led by multinationals from large emerging economies may be configured on the basis of considerations that supplement factor cost efficiencies, namely, those of societal objectives as formulated by political actors in the home country. In this context, the purpose of this paper is to examine the implications of political and socio-economic factors on GVC configuration of multinational firms.
Design/methodology/approach
This paper provides an in-depth case study of a leading Chinese car manufacturer, Zhejiang Geely Holding Group (ZGH) and its value-chain configuration, with a special focus on the acquisition of Volvo Car Corporation.
Findings
The authors show how ZGH’s configuration of its GVC, including that of acquired Volvo Car Corporation, takes place in symbiosis with political actors. The advantages and disadvantages of this symbiosis are highlighted.
Research limitations/implications
The study focuses on GVC configuration of one company, ZGH, in one industry, the automotive industry, in one emerging economy. The external validity of the study may therefore be limited. Furthermore, the focus is on the geographical/locational configuration of GVCs and ignores the ownership aspects.
Originality/value
The paper provides novel empirical evidence to better understand GVC configuration of multinational firms from emerging economies.
Details
Keywords
Jan-Erik Vahlne, Inge Ivarsson and Claes G. Alvstam
This paper aims to contribute to the debate concerning the asserted end of the globalization process.
Abstract
Purpose
This paper aims to contribute to the debate concerning the asserted end of the globalization process.
Design/methodology/approach
This paper is a description of the evolution of all Swedish MNEs, the 50 largest companies and the ten truly global MNEs, building on data compiled by the authors, mainly from annual reports.
Findings
The largest Swedish MNEs have continued to globalize and have at the same time improved their financial performance during the period of study, 2010-2016.
Practical implications
The proposition that multinationals are heading home cannot be confirmed in the Swedish case. There is therefore a need to compare Swedish experiences with other national examples to better generalize the findings.
Social implications
The political decisions regarding external trade and foreign direct investment should support continuous liberalization and facilitation of cross-border economic interaction.
Originality/value
As Swedish MNEs are more globalized than the average in advanced economies, this study offers insight into the contemporary internationalization process.
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Martin Henning and Ramsin Yakob
The purpose of this study is to investigate how an increasingly intertwined international geography of ownership affects renewal activities and processes, including innovation, in…
Abstract
Purpose
The purpose of this study is to investigate how an increasingly intertwined international geography of ownership affects renewal activities and processes, including innovation, in established local companies that have shifted into foreign ownership. The authors develop a framework for the relations between (foreign) ownership and local renewal activities and processes (including innovation). The authors focus on access to resources for renewal, the development of capabilities for innovation and change, and local mandates to pursue renewal. Based on case studies of eight formerly Swedish-owned mid-size manufacturing companies that have shifted into and remained under foreign ownership during most of the 2010s, the authors develop a framework concerned with the relations between (foreign) ownership and renewal activities and processes in local firms.
Design/methodology/approach
Multiple intensive case studies of eight previously Swedish-owned mid-sized manufacturing companies to gain qualitative insights into the resource, capabilities and mandates for renewal under new ownership conditions. Empirical data collected primarily through semi-structured interviews and complemented with secondary material, including annual reports (2010–2018), databases, press releases and information on company websites. Empirical data were analyzed thematically to isolate key findings pertaining to renewal. At the core of the analysis process was the gradual creation of a framework that stipulates the relations between (foreign) ownership and firm renewal activities and processes.
Findings
The companies are endowed with liberal but conditional mandates to pursue strategic innovation in their original sites and draw on a stronger resource repertoire within their ownership spheres. In comparison to the established international business (IB) literature, the authors add considerations about how local aspects interact with international ones to form global distribution of renewal activities in our time. To economic geographers and innovation scholars, consideration of the local and its importance in renewal activities and processes is certainly not new, but we show how ownership is an important aspect that conditions some of the strategic interactions that companies have with their “outsides”.
Originality/value
Contributes to the burgeoning conversation between IB and economic geography disciplines. Emphasizes a deeper local aspect to the IB literature, partly how companies access resources and capabilities from the ownership sphere at points that suit their renewal efforts and partly the persistence of path-dependent aspects of local companies even as they get acquired by multinationals. Emphasizes ownership and mandate aspects to the literature in Economic geography, which tends to focus on regional/non-regional assets for renewal and innovation. Findings show that the non-regional assets are, in fact, two distinct categories as ownership becomes internationalized: assets within and outside the ownership sphere.