Supplier internationalization in the global apparel value chain from Bangladesh to Ethiopia: the buyers business model, institutions and entrepreneurial capability

Mohammad B. Rana, Matthew M.C Allen and Per Servais

Chapter 2 in Upgrading the Global Garment Industry, 2021, pp 13-45 from Edward Elgar Publishing

Abstract: Current research highlights the internationalization of firms in downstream value chains, such as marketing and sales; however, studies have overlooked supplier internationalization into up-stream value chains. Drawing on internationalization and GVC perspectives, we examine the critical case of DBL Apparel Company from Bangladesh, which supplies many global brands, including Sweden’s H&M, and has internationalized into Ethiopia. As the company appears to be the first Bangladeshi garment firm to have internationalized, we conduct an in-depth examination over a three-year period of the process and the antecedents affecting the firm’s overseas expansion. We explore how the buyer’s business model, institutional features, and the supplier’s entrepreneurial capability influence DBL’s internationalization. In particular, our study demonstrates how the buyer’s market-driving approach, value creation, delivery, and proposition shape how the buyer shows commitment to the supplier’s internationalization. At the same time, the supplier’s entrepreneurial capability, consisting of visionary leadership, commitment, learning intent, absorptive capacity, and dynamic management skills contribute to its decision to internationalize. Our analysis reveals that a supplier firm does not move toward internationalization based on one-sided commitment only; instead, it is the ‘shared commitment’ of both buyer and supplier in the GVC that contributes to the supplier’s decision to internationalize. We also demonstrate the influence of institutional characteristics in both home and host countries, particularly the role of government and the logics of doing business that facilitate the internationalization decision and process. Our study contributes to internationalization business and GVC literatures.

Keywords: Asian Studies; Business and Management; Development Studies; Economics and Finance; Geography (search for similar items in EconPapers)
Date: 2021
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