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Cited by 1,258Global trade, sustainability, and social impactOutsourcing and Supply Chain ManagementInternational Business and FDI

Location, control and innovation in knowledge-intensive industries

Open access
Mudambi, R.·2008·Journal of Economic Geography
DOI 10.1093/jeg/lbn024
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Abstract

The rising share of intangibles in economies worldwide highlights the crucial role of knowledge-intensive and creative industries in current and future wealth generation. The recognition of this trend has led to intense competition in these industries. At the micro-level, firms from both advanced and emerging economies are globally dispersing their value chains to control costs and leverage capabilities. The geography of innovation is the outcome of a dynamic process whereby firms from emerging economies strive to catch-up with advanced economy competitors, creating strong pressures for continued innovation. However, two distinct strategies can be discerned with regard to the control of the value chain. A vertical integration strategy emphasizes taking advantage of ‘linkage economies’ whereby controlling multiple value chain activities enhances the efficiency and effectiveness of each one of them. In contrast, a specialization strategy focuses on identifying and controlling the creative heart of the value chain, while outsourcing all other activities. The global mobile handset industry is used as the template to illustrate the theory.

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Crossref · 10.1093/jeg/lbn024

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  • In a GVC, control of critical knowledge and intangible assets takes precedence over ownership of physical assets.

    “It has been argued that in a GVC, control of critical knowledge and intangible assets (e.g., brand names and technological platforms) takes precedence over ownership of physical assets (Buckley, 2011(Buckley, , 2014;;Mudambi, 2008)”

    From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Mudambi, 2008

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Authors
Mudambi, R.
Affiliations
Temple University (US)
Corresponding author
Mudambi, R.
ORCID
Mudambi, R.
Venue
Journal of Economic Geography
Publisher
Oxford University Press (OUP)
Published
2008-07-21
Volume
8
Issue
5
Pages
699-725
ISSN
  • 1468-2702 (ISSN-L)
  • 1468-2710
DOI
10.1093/jeg/lbn024
OpenAlex
W2072059359
Semantic Scholar
4aa852468317a2dead24065d9708bfa2ebafe5f8
Cited by
1,258
References
7
Citations by year
2026: 72 · 2025: 68 · 2024: 54 · 2023: 115 · 2022: 100 · 2021: 96 · 2020: 97 · 2019: 92 · 2018: 73 · 2017: 82 · 2016: 57 · 2015: 71 · 2014: 59 · 2013: 72 · 2012: 58
FWCI
93.08
Type
journal article
Language
en
Open access
Locations
  • Journal of Economic Geography (publishedVersion)
  • CentAUR (University of Reading) (acceptedVersion)
  • SSRN Electronic Journal (submittedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
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 › Business, Management and Accounting › Strategy and Management › International Business and FDI
Keywords
knowledge-intensive industries, creative industries, value chain control, vertical integration, outsourcing, specialization strategy, geography of innovation, emerging markets, intangibles

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