Handbook on Global Value Chains
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Handbook on Global Value Chains

Edited by Stefano Ponte, Gary Gereffi and Gale Raj-Reichert

Global value chains (GVCs) are a key feature of the global economy in the 21st century. They show how international investment and trade create cross-border production networks that link countries, firms and workers around the globe. This Handbook describes how GVCs arise and vary across industries and countries, and how they have evolved over time in response to economic and political forces. With chapters written by leading interdisciplinary scholars, the Handbook unpacks the key concepts of GVC governance and upgrading, and explores policy implications for advanced and developing economies alike.
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Chapter 22: The role of transnational first-tier suppliers in GVC governance

Gale Raj-Reichert


Relationships between lead firms and first-tier suppliers in global value chains (GVCs) are dynamic due to changes in competitive pressures, technological innovations and industry evolutions. This chapter examines these changes with a focus on the growing importance of a small group of large transnational first-tier suppliers in the electronics, automotive and apparel industry global value chains. Case studies on a select number of these suppliers show that through their increasing capabilities and growth in responsibilities, they are taking over and strategically influencing more functional roles in global value chains. Through an examination of supplier power and changing business dynamics between lead firms and these suppliers, this chapter points to shifting power relationships towards multi-polar governance in global value chains

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