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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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“Even though the distribution of engineering work had shifted significantly, the newly formed automotive value chains were, therefore, described as asymmetric strategic networks assuming the shape of hierarchical pyramids steered by OEMs as focal corporations [31, 32].”
Background
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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