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In-house production versus specific forms of supplier governance: testing predictions of the global value chains model

Alexander Schmitt and Johannes Van Biesebroeck ()

International Journal of Automotive Technology and Management, 2017, vol. 17, issue 1, 26-50

Abstract: Carmakers interact in their supply chain with virtually all manufacturing industries. Using a novel dataset on sourcing transactions that contains links between buyers and suppliers for sourcing contracts of individual components, we show that multiple forms of relationship governance can coexist within a single industry. We first show that three characteristics of transactions that have been used to rationalise observed sourcing patterns in the global value chains (GVC) literature - complexity, codifiability and supplier capability - also predict whether components are outsourced or not. More importantly, the same characteristics help explain how carmakers choose to structure supply relationships differently depending on the situation.

Keywords: global value chains; GVC; outsourcing; supply relationships; in-house production; supplier governance; automotive supply chains; automobile industry; supply chain management; SCM; sourcing patterns; complexity; codifiability; supplier capability. (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:ids:ijatma:v:17:y:2017:i:1:p:26-50