When Suppliers Climb the Value Chain: A Theory of Value Distribution in Vertical Relationships

• 成果类型: Article
• 署名作者: Wan, Zhixi; Wu, Brian
• 署名单位: University of Oregon; University of Michigan System; University of Michigan
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2015.2356
• 发表日期: 2017
• 页码: 477-496
• 关键词: value chain climbing; Value chain; value distribution; capabilities

摘要

Although offshore outsourcing has become an important strategy to lower production costs among Western firms, it gives rise to the phenomenon of value chain climbing-suppliers in emerging markets can develop capabilities by supplying, with aspirations to compete with the buyers in the product market. We build an analytical model to study the impact of value chain climbing on value distribution in vertical relationships. The analysis identifies a set of dominant relationships, characterizes how the buyer's optimal choice among these relationships depends on firms' relative competitiveness in the product market and the supplier's speed of capability development, and shows how the optimal choice evolves with the dynamics of the supplier's capability development. The results provide new insights into our understanding of value distribution in vertical relationships across different contexts and over time. By endogenizing the supplier's entry into the product market, our study enriches the literatures on vertical relationships, market entry, and the management of global value chains.