The Contest for Value in Global Value Chains


The Contest for Value in Global Value Chains

Correcting for Distorted Distribution in the Global Apparel Industry

9781800882140 Edward Elgar Publishing
Lilac Nachum, Professor of International Business, Baruch College, City University of New York, US and Yoshiteru Uramoto, Distinguished Professor, Center for Global Education and Discovery, Sophia University Tokyo, Japan
Publication Date: 2021 ISBN: 978 1 80088 214 0 Extent: 192 pp
Who captures the value created in global supply chains? How should gaps in value capture among participants be amended and by whom? Focusing on the global apparel supply chain and employing value creation as a yardstick for evaluation of value capture, the book documents distortions in value distribution among global brands, manufacturers, labor, and consumers. It develops a novel approach for correcting for these distortions by creating a market for social justice that is based on interdependence relationships among the participants.

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Who captures the value created in global supply chains? How should gaps in value capture among participants be amended and by whom? Focusing on the global apparel supply chain and employing value creation as a yardstick for evaluation of value capture, this book documents disturbing misalignments between value creation and value capture among global brands, manufacturers, labor, and consumers. The authors posit that the failure of both markets and governments to adequately distribute the value created by global value chains calls for different mechanisms to address this challenge. They develop a novel approach based on the logic of the interdependencies germane to the co-specialized nature of value chains. These interdependencies afford participants power to create markets for social justice in which behavior that drives outcomes towards adequate value distribution is economically and socially rewarded. These dynamics turn GVCs into their own de-facto ‘regulators’ with the power to self-correct for distributional distortions.

The contributions of the book are at the center of current debates in policy milieu, academic circles and corporate boards regarding human rights, social inequality, and the role of the private sector in advancing social goals. They received renewed importance in contemporary discussions regarding the future of global value chains as the predominant mode of organizing value creation and the governance challenges they raise in a complex global world.
Critical Acclaim
‘The book stands out by providing a holistic analysis of GVCs, from labor to manufacturers, buyers, and consumers.’
– Constantin Blome, Stephan Manning, Martin C Schleper, Journal of International Business Studies

‘The book remains an excellent study of GVCs and their myriad contexts, participants, power relations and processes, and is a recommended read for students, researchers and policymakers working on GVCs. Its central contribution of understanding value capture through the yardstick of value creation is compelling. The research and theoretical developments that the book offers have important implications for practice and scholarship and provoke a debate on corporate governance in GVCs.’
– Sukti Dasgupta and David Kucera, UNCTAD Transnational Corporations

‘This captivating book addresses one of the great challenges of our era: how to achieve sustainable value creation and distribution in global value chains. The lucid analysis, inspired by Bangladesh’s Rana Plaza factory collapse, sheds light on what can go wrong in global value chains. The authors develop a credible roadmap for companies, policy makers and consumers to achieve a more balanced value distribution. This book is truly a must read for students in international business and global affairs, and for senior managers of firms with global ambitions.’
– Alain Verbeke, University of Calgary, Canada and Editor-in-Chief, Journal of International Business Studies

‘Firms and governments need a baseline against which to evaluate their operations in global value chains for growth and sustained economic development. This book goes beyond the discussion on which firms appropriate value and offers much-needed analysis on whether such appropriation is distorted or not, hence providing ample scope for public policies and firm strategies. The book’s unified framework based on the theory of value creation and value appropriation presents an approach for developing more economically and socially beneficial global value chains for all stakeholders by having their relationships more based on collaboration and co-value creation rather than competition and exploitation. This is an essential reference book for both policymakers and practitioners to build better and resilient global value chains in the post-pandemic world.’
– Nobuya Haraguchi, United Nations Industrial Development Organization

‘Fashion is a world of beauty and creativity, but today it faces many challenges—such as its catastrophic impact on the environment, its lack of diversity, and the way it poorly treats workers globally. In their new book, Professors Nachum and Uramoto do not shy away from addressing one of fashion’s key issues: how value is created, and then appropriated by various stakeholders (such as producers or customers). They take a well-established academic approach—the Global Value Chain—and use it to its full potential, expanding its reach far beyond its conventional confines. In particular, their analysis of the role customers is extremely intriguing, and highlights a simple fact: the future of fashion depends on all of us. A wonderful book which manages to reconcile thorough intellectual work and ethical engagement.’
– Frédéric Godart, Associate Professor of Organisational Behaviour, INSEAD, France and Author, Unveiling Fashion: Business, Culture, and Identity in the Most Glamorous Industry

‘This timely book represents a significant academic contribution to an important under-researched aspect of global value chains, namely the contest for value in one of the key sectors in developing and emerging economies. Building on their rich research experience and intellect, Nachum and Uramoto present fresh evidence and prompt new insights and constructive debate. The Contest for Value in Global Value Chains is an essential reading for policymakers, business leaders, and researchers especially at a time of widening international inequalities, middle-income trap, and resilience of GVCs of industries and firms are prominent agenda.’
– Arkebe Oqubay, Ethiopia Government, ODI Distinguished Fellow and Author of Made in Africa

‘This well-written empirical study on the value distribution among participants in global apparel value chains is must-read for anyone interested in the economics of Global Value Chains. It also discusses critically how the share of local manufacturers in total value capture can be increased through government policies. At the same time, the study points out that local employees do not proportionally benefit from the increased profitability of their employers and–commendably–outlines policy options through which this deplorable drawback can be addressed.’
– Karl Sauvant, Columbia University, US

‘The systematic academic analysis and conclusions presented in the book provide a very good platform for multiple stakeholders to discuss and work on possible improvements for the thorny issue of value distribution in global supply chains. The multi-stakeholder approach advanced by the book, based on the principle of interdependencies among these stakeholders, referring to consumers, manufacturers, trade unions, governments and workers, offers a promising venture for amending imbalance between value appropriation/distribution. The book is notable in its objective, economically-rigor approach to value capture in global supply chains, which result in intriguing findings and conclusions regarding value capture and distribution, notably in relation to global brands. As pressure on global brands to assume accountability to governance of their entire supply chains increases the message of the book is particularly timing and relevance. I strongly endorse this work.’
– Roger Hubert, Former H&M Regional Head, Bangladesh, Pakistan & Ethiopia

‘Lilac Nachum and Yoshiteru Uramoto examine the contest for value in the Global Value Chain (GVC) of the apparel industry. This book is a significant contribution to the understanding of GVCs and particularly to the vital question of who benefits from their organization. Moreover, it sheds light on another of the grand challenges of the modern global economy – the issue of governance and the social responsibility of business, especially when the business network extends internationally. I can recommend this book as an insightful and accessible analysis of the modern “global factory.’
– Peter J. Buckley, Leeds University, UK
Contents: 1. Introduction: setting up the stage 2. The conceptual framework 3. The empirical context: the global apparel value chain 4. The contest for value capture: manufacturers and global brands 5. The contest for value capture: labor as a claimant of value 6. The contest for value capture: consumers as external claimants of value 7. The contest for value capture: the apparel industry in perspective 8. Towards a balanced distribution of value in global value chains: creating markets for social justice 9. Implications of the study for value distribution in global value chains References Index
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