Governing under high uncertainty: the strategic role of sÅ gÅ shÅ sha in early GVC formation

Yoko Isozaki ()
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Yoko Isozaki: Retail Consultant, LuxModa Consulting

No 25-16, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This study explores the role of Japan’s sŠgŠshŠsha in global value chains (GVCs) led by multinational enterprises (MNEs), reconceptualizing them as strategic governance actors. Applying Transaction Cost Economics (TCE) and firm-GVC integrative framework, we conduct a comparative case analysis of DuPont and Fast Retailing, both of which entered China in the early-1990s, a period marked by deep political and policy uncertainty, through partnerships with Mitsubishi—a leading sŠgŠshŠsha. Our finding identifies an alternative governance structure during the early, highly uncertain stages of GVC formation: the temporary externalization of orchestration functions. We also extend the concept of credible commitment beyond its traditional application in a dyadic buyer-supplier context, showing its relevance in multi-actor contracts and even joint ventures.

Keywords: Transaction Cost Economics; entry mode research; GVC governance study; sÅ gÅ shÅ sha; case-oriented research method. (search for similar items in EconPapers)
JEL-codes: N85 N95 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2025-11
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