What lies between market and hierarchy? Insights from internalization theory and global value chain theory

Roger Strange () and John Humphrey ()
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Roger Strange: University of Sussex
John Humphrey: University of Sussex

Journal of International Business Studies, 2019, vol. 50, issue 8, No 10, 1413 pages

Abstract: Abstract In this paper, we suggest that internalization theory might be extended by incorporating complementary insights from GVC theory. More specifically, we argue that internalization theory can explain why lead firms might wish to externalize selected activities, but that it is largely silent on the mechanisms by which those lead firms might exercise control over the resultant externalized relationships with their GVC partners. We advance an explanation linking the choice of control mechanism to two factors: power asymmetries between the lead firms and their GVC partners, and the degree of codifiability of the information to be exchanged in the relationship.

Keywords: internalization theory; global value chain theory; externalization; outsourcing; global factory (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (56)

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DOI: 10.1057/s41267-018-0186-0

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