Exploring the Link between Governance of Multinational Corporations and Global Value Chain
Posted: 28 Dec 2017
Date Written: December 23, 2017
This papers aims to explore the link between governance of Multinational Corporations (MNCs) and Global Value Chain (GVC). A systematic literature review is presented, analyzing the published papers from 2000 to 2015 in peer reviewed journals. We also explore outcomes of GVCs in terms of upgrading. Our aim is to identify research gaps and suggest new lines for future research that would advance our understanding of how MNCs management practices relate to economic, social and environmental performance of GVCs. Linking governance of MNCs and GVC allows the exploration of approaches and mode of coordination between them. Through the lenses of upgrading, we argued that MNCs can manage their value chain network through alternative forms of governance by engaging in suppliers’ process or dynamic evolution of the division of labor by sending their experts to work to disseminate and diffuse new technologies as compared to other buyers that can transform those low skilled suppliers into global suppliers. Additionally, MNCs may reduce the transaction and location costs through orchestrating GVC in such a way in which all the activities are interlinked and knowledge management is internalized among organizations and networks. We propose inclusion of such elements in GVC literature that will provide ability to understand MNCs governance in changing global arena.
Keywords: MNCs, Global Value Chains, Systematic, Governance, Orchestrator
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