Abstract
This research builds on the resource-based-view (RBV) theory, which posits that supplier firms upgrading is derived from organizational capability. It is argued that cooperation within buyer-supplier relationships and entrepreneurial orientation of a supplier firm positively influence the firm’s organizational capability, which in turn influences upgrading within the global value chain (GVC).
Using a sample of 321 CEOs of Bangladeshi apparel supplier firms’, the research found that organizational capability largely mediates the positive effects of cooperation and entrepreneurial orientation on upgrading. Higher organizational capability leads to better upgrading in process, product, functional and chain categories. The number of buyers a supplier deals with strengthened the relationship between cooperation and organizational capability. While, the export mode (i.e., direct vs. indirect) reduced the positive effects of organizational capability on upgrading.
All the hypothesised paths were statistically significant (except a moderation effect from export mode to process upgrading) when the type of firm, ownership type, export volume, and type of buyer were controlled. This research empirically validated the mediating role of organizational capability in upgrading and made a significant contribution to the GVC literature. It also made an important methodological contribution by developing and validating a multidimensional measurement scale for assessing process, product, functional and chain upgrading.
The findings of this research would assist supplier firms managers in identifying capabilities that need improvement to facilitate upgrading. Buyers may also be able to use the results to identify areas where their suppliers need assistance to enhance performance. Findings would also assist host country governments in policy making to assist in developing suppliers’ capabilities and upgrading.
Using a sample of 321 CEOs of Bangladeshi apparel supplier firms’, the research found that organizational capability largely mediates the positive effects of cooperation and entrepreneurial orientation on upgrading. Higher organizational capability leads to better upgrading in process, product, functional and chain categories. The number of buyers a supplier deals with strengthened the relationship between cooperation and organizational capability. While, the export mode (i.e., direct vs. indirect) reduced the positive effects of organizational capability on upgrading.
All the hypothesised paths were statistically significant (except a moderation effect from export mode to process upgrading) when the type of firm, ownership type, export volume, and type of buyer were controlled. This research empirically validated the mediating role of organizational capability in upgrading and made a significant contribution to the GVC literature. It also made an important methodological contribution by developing and validating a multidimensional measurement scale for assessing process, product, functional and chain upgrading.
The findings of this research would assist supplier firms managers in identifying capabilities that need improvement to facilitate upgrading. Buyers may also be able to use the results to identify areas where their suppliers need assistance to enhance performance. Findings would also assist host country governments in policy making to assist in developing suppliers’ capabilities and upgrading.
| Original language | English |
|---|---|
| Publication status | Published - 2017 |
| Externally published | Yes |
| Event | Conference on Global Production - National University of Singapore, Singapore Duration: 6 Dec 2017 → 8 Dec 2017 https://gpn.nus.edu.sg/conference2017.html |
Conference
| Conference | Conference on Global Production |
|---|---|
| Country/Territory | Singapore |
| Period | 6/12/17 → 8/12/17 |
| Internet address |