Playing football in a soccer field: value chain structures, institutional modularity and success in foreign expansion

Michael G. Jacobides
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Michael G. Jacobides: London Business School and Advanced Institute of Management, London, UK, Postal: London Business School and Advanced Institute of Management, London, UK

Managerial and Decision Economics, 2008, vol. 29, issue 2-3, pages 257-276

Abstract: This paper suggests that an unrecognized determinant of global expansion is the structure of the value chain, which is both country- and sector-specific. Value chain structure evolves in a path-dependent, country-specific way. Differences in vertical structures between countries predict the extent to which firms in any segment can export their competitive advantage. For globalization to occur, firms must have an 'institutionally modular' product, which is not easy to achieve. Evidence from the mortgage banking industry suggests that increasing modularization and global convergence of value chain structures may be opening up new venues for globalization, especially in the service sector. Copyright © 2008 John Wiley & Sons, Ltd.

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