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Value chains, networks and clusters: reframing the global automotive industry
Open accessAbstract
In this article, we apply global value chain (GVC) analysis to recent trends in the global automotive industry, with special attention paid to the case of North America. We use the three main elements of the GVC framework—firm-level chain governance, power and institutions—to highlight some of the defining characteristics of this important industry. First, national political institutions create pressure for local content, which drives production close to end markets, where it tends to be organized nationally or regionally. Second, in terms of GVC governance, rising product complexity combined with low codifiability and a paucity of industry-level standards has driven buyer–supplier linkages toward the relational form, a governance mode that is more compatible with Japanese than American supplier relations. The outsourcing boom of the 1990s exacerbated this situation. As work shifted to the supply base, lead firms and suppliers were forced to develop relational linkages to support the exchange of complex uncodified information and tacit knowledge. Finally, the small number of hugely powerful lead firms that drive the automotive industry helps to explain why it has been so difficult to develop and set the industry-level standards that could underpin a more loosely articulated spatial architecture. This case study underlines the need for an open, scalable approach to the study of global industries.
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“To some extent, control decisions are impacted by host countries' regulatory environments, particularly when national political institutions create pressure for local content on MNEs that are trying to gain access to large downstream markets in Global value chains emerging economies (Lund-Thomsen & Coe, 2015;Morris & Staritz, 2014;Sturgeon, Van Biesebroeck, & Gereffi, 2008).”
From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Sturgeon, Van Biesebroeck, & Gereffi, 2008
In the citing paper
“Desire to access large and fast-growing consumer markets drives production activities close to end markets, for example, when host country governments in emerging markets pressure MNEs for local operations (Sturgeon et al., 2008).”
From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Sturgeon et al., 2008
In the citing paper
“Sturgeon et al. (2008) followed up with this line of research by examining major American and Japanese automotive lead firms and over 150 suppliers in North America.They found that upgrading of local suppliers was more likely if the GVC network structure moved towards a relational form of power dynamics.”
From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Sturgeon et al., 2008
In the citing paper
“In a case study of major American and Japanese automotive lead firms and their suppliers, Sturgeon et al. (2008) find that relational governance is necessitated by rising product complexity, low process codifiability and a paucity of industry-level standards.”
From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Sturgeon et al. (2008)
In the citing paper
“Sturgeon et al. (2008) discuss the impact of home country cultural characteristics on American and Japanese lead firms' abilities to successfully engage in relational governance.”
From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Sturgeon et al. (2008)
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Industrial upgrading in global production networks: the case of the Chinese automotive industry
Li, Y. S., Kong, X. X., & Zhang, M. (2014) · Asia Pacific Business Review · doi:10.1080/13602381.2014.990203 · Cited by 18
How to cope with the global value chain: lessons from Italian automotive suppliers
Castelli, C., Florio, M., & Giunta, A. (2011) · International Journal of Automotive Technology and Management · doi:10.1504/ijatm.2011.040870 · Cited by 17
“The GVCA – first proposed by Gereffi (1994) and then followed by a number of contributions (Gereffi and Korzeniewicz, 1994; Kaplinsky, 2000; Henderson et al., 2002; Humphrey and Schmitz, 2002; Sturgeon et al., 2008) – focuses upon firms’ dynamics, suggesting that the positioning of a firm and its upgrading along the g…”
BackgroundWang, Y., Assche, A. V., & Turkina, E. (2017) · Journal of Small Business & Entrepreneurship · doi:10.1080/08276331.2017.1391368 · Cited by 18
Giacomin, V. (2018) · Journal of Global History · doi:10.1017/s1740022818000207 · Cited by 18
Analysis of the quality management system for automotive industry- ISO/TS 16949 in the world
Neves, F. D. O., Salgado, E. G., Beijo, L. A., Lira, J. M. S., & Ribeiro, L. H. M. D. S. (2018) · Total Quality Management & Business Excellence · doi:10.1080/14783363.2018.1538776 · Cited by 18
Crossa, M., & Wise, R. D. (2021) · Globalizations · doi:10.1080/14747731.2021.1882818 · Cited by 18
“With the predominance of Lean production, firms outsourced the production of auto parts in order to strategically concentrate on the design of vehicle models to which supplier corporations were forced to adapt (Sturgeon et al., 2008).”
BackgroundMulhall, R. A., & Bryson, J. R. (2013) · Economic Geography · doi:10.1111/ecge.12025 · Cited by 18
“Governance models in the literature focus on the ability of lead firms to transfer costs and risks to their suppliers (Sturgeon and Lee 2001; Gereffi et al. 2005; Sturgeon et al. 2008).”
BackgroundEvaluation of industry cluster competitiveness: a quantitative approach
Bhawsar, P., & Chattopadhyay, U. (2018) · Benchmarking An International Journal · doi:10.1108/bij-02-2017-0022 · Cited by 18
Maritime knowledge clusters: A conceptual model and empirical evidence
Zhou, Y., Yuen, K. F., Tan, B. S. Y., & Vinh Van, T. H. A. I. (2020) · Marine Policy · doi:10.1016/j.marpol.2020.104299 · Cited by 18
Frigant, V., & Zumpe, M. (2014) · RePEc: Research Papers in Economics · Cited by 18
Peters, E. D. (2021) · Journal of Current Chinese Affairs · doi:10.1177/18681026211024667 · Cited by 17
“tensions between the United States (US) and China as well as affecting tariffs in other countries in the European Union, among others, have generated incentives for nearshoring in the US and the European Union for example (McKinsey, 2016; Sturgeon et al., 2008).”
BackgroundUpgrading in the Automotive Periphery: Turkey's Battery Electric Vehicle Maker Togg
Mordue, G., & Sener, E. (2022) · Development and Change · doi:10.1111/dech.12713 · Cited by 17
State capitalism and clusters: the case of Brazilian shipbuilding
DuBois, F. L., & Primo, M. A. M. (2016) · International Journal of Emerging Markets · doi:10.1108/ijoem-03-2012-0023 · Cited by 17
Wang, L., Tan, J., & Wan, L. (2018) · Journal of Business Research · doi:10.1016/j.jbusres.2018.01.020 · Cited by 17
Emergence and development of low-tech clusters: an empirical study of five Palestinian clusters
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Villani, D., & Fana, M. (2020) · Journal of Industrial and Business Economics · doi:10.1007/s40812-020-00178-3 · Cited by 17
The value chain facing the challenges of digitalization and the economic downturn
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Metadata
- Authors
- Sturgeon, T., Van Biesebroeck, J., & Gereffi, G.
- Affiliations
- Massachusetts Institute of Technology (US)
- Duke University (US)
- ORCID
- Gereffi, G.
- Venue
- Journal of Economic Geography
- Publisher
- Oxford University Press (OUP)
- Published
- 2008-02-29
- Volume
- 8
- Issue
- 3
- Pages
- 297-321
- ISSN
- 1468-2702 (ISSN-L)
- 1468-2710
- OpenAlex
- W2152630760
- Cited by
- 885
- References
- 50
- Citations by year
- 2026: 34 · 2025: 49 · 2024: 33 · 2023: 49 · 2022: 48 · 2021: 65 · 2020: 55 · 2019: 61 · 2018: 46 · 2017: 61 · 2016: 46 · 2015: 62 · 2014: 54 · 2013: 59 · 2012: 48
- FWCI
- 116.35
- Type
- journal article
- Language
- en
- Open access
- green
- lirias.kuleuven.be
- Licence
- other-oa
- Locations
- Journal of Economic Geography (publishedVersion)
- Lirias (KU Leuven) (submittedVersion, other-oa)
- SSRN Electronic Journal (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- DukeSpace (Duke University) (submittedVersion)
- DukeSpace (Duke University) (submittedVersion, cc-by-nc-nd)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › Global trade, sustainability, and social impact
- Social Sciences › Business, Management and Accounting › Management Information Systems › Outsourcing and Supply Chain Management
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Keywords
- global value chains, automotive industry, North America, local content, relational governance, tacit knowledge, outsourcing, lead firms, spatial architecture, industrial clusters, product complexity
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