A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Hernández, Virginia; Pedersen, Torben Article Global value chain configuration: A review and research agenda BRQ Business Research Quarterly Provided in Cooperation with: Asociación Científica de Economía y Dirección de Empresas (ACEDE), Madrid Suggested Citation: Hernández, Virginia; Pedersen, Torben (2017) : Global value chain configuration: A review and research agenda, BRQ Business Research Quarterly, ISSN 2340-9436, Elsevier España, Barcelona, Vol. 20, Iss. 2, pp. 137-150, http://dx.doi.org/10.1016/j.brq.2016.11.001 This Version is available at: http://hdl.handle.net/10419/206364 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ www.econstor.eu BRQ Business Research Quarterly (2017) 20, 137---150 Business Research QuarterlyBRQ www.elsevier.es/brq REVIEW ESSAY Global value chain configuration: A review and research agenda a,∗ b Virginia Hernández , Torben Pedersen a University Carlos III of Madrid, Business Management Division, C/ Madrid, 126, 28903 Getafe, Madrid, Spain b Bocconi University, Department of Management and Technology, Via Roentgen 1, 20136 Milan, Italy Received 28 November 2015; accepted 29 November 2016 Available online 23 January 2017 JEL Abstract This paper reviews the literature on global value chain configuration, providing an CLASSIFICATION overview of this topic. Specifically, we review the literature focusing on the concept of the M16 global value chain and its activities, the decisions involved in its configuration, such as location, the governance modes chosen and the different ways of coordinating them. We also examine KEYWORDS the outcomes of a global value chain configuration in terms of performance and upgrading. Our Literature review; aim is to review the state of the art of these issues, identify research gaps and suggest new Global value chain; lines for future research that would advance our understanding of how firms are implementing International new ways of organizing and managing activities on a global scale. business; © 2016 ACEDE. Published by Elsevier Espana,˜ S.L.U. This is an open access article under the CC GVC configuration BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Introduction activities and encompass the whole value chain. This has prompted the emergence of several lines of research examining different aspects of the global value chain A vast amount of research has focused on different configu- configuration, including: governance types (Buckley and rational aspects of firms’ activities worldwide. Specifically, Strange, 2015; Gereffi et al., 2005), levels of disaggregation an important part of the literature has focused on explain- (Asmussen et al., 2007; Beugelsdijk et al., 2009), geographic ing the reasons and effects of locating individual activities scope (Los et al., 2015; Mudambi and Puck, 2016), and the in foreign countries (Lewin et al., 2009; Martínez-Noya and upgrading processes of the firms involved (De Marchi et al., García-Canal, 2011; Rodríguez and Nieto, 2016; Schmeisser, 2013; Humphrey and Schmitz, 2002; Lema et al., 2015). 2013). Nevertheless, research has increasingly broadened Recent studies have reviewed the literature that focuses this perspective to go beyond the analysis of specific on the different theoretical perspectives in global supply chain management (Connelly et al., 2013). However, a com- ∗ prehensive review of the literature dealing with the state Corresponding author. E-mail addresses: [email protected] (V. Hernández), of the art of the global value chain configuration has not [email protected] (T. Pedersen). yet been carried out. Firms are constantly taking decisions http://dx.doi.org/10.1016/j.brq.2016.11.001 2340-9436/© 2016 ACEDE. Published by Elsevier Espana,˜ S.L.U. This is an open access article under the CC BY-NC-ND license (http:// creativecommons.org/licenses/by-nc-nd/4.0/). 138 V. Hernández, T. Pedersen The global value chain configuration Conce pt and activities Decisions Implications Governance Location Coordination Performance Upgrading Figure 1 Topics covered in this literature review. in an interconnected world that not only affect their struc- leading corporation plays a central role as merchandiser and tures, capabilities and results, but also those of the other makes sure that all pieces of the business come together agents they interact with. It is thus necessary to clearly --- a n d producer-driven commodity chains --- in which the identify the decisions involved in a global value chain con- leading corporation plays a central role in production activ- figuration that have been already examined and, from that, ities (Gereffi and Korzeniewicz, 1994). Other scholars have the aspects that remain unexplored. The purpose of this focused on the analysis of supply chains, where the supply article is therefore to review the literature on global value chain concept explains the firms’ relationships with suppli- chain configurations in order to systematize it and indicate ers and customers to deliver product or services at less cost avenues for future research (see Fig. 1). (Christopher, 2005). The value chain concept goes a step The study contributes to global value chain literature in further, and explains that entities may be connected and several ways. We believe that, traditionally, research has create a value which is a source of competitive advantage been focused on specific topics involved in its configuration (Al-Mudimigh et al., 2004; Stabell and Fjeldstad, 1998). This such as decisions on location, governance and coordination. latter concept also takes into account the customers in a A review examining all of them allows us to better under- privileged position (Cox, 1999), understanding their needs stand not only the characteristics of each decision but also and offering them value (Di Domenico et al., 2007), by exam- the interdependencies between them. Additionally, it allows ining value creation and its capture (Gereffi and Lee, 2012). us to observe the complexity of a global value chain con- Moreover, when the value chain involves a constellation figuration that may be constantly evolving due to changes of organizational arrangements and firms that are intercon- in countries, industries and firms. All in all, it allows us to nected through a global network, the global value chain identify the topics that remain unexplored and present those concept emerges (De Marchi et al., 2014; Giroud and Mirza, lines of research that, in our view, remain unanswered. 2015; Mudambi and Puck, 2016). Hence, the global value The rest of the paper is structured as follows. First, we chain is defined as ‘‘the full range of activities that firms explain the global value chain concept and the different and workers perform to bring a product from its concep- activities composing it. Secondly, we describe how the liter- tion to end use and beyond’’, that are carried out on a ature has classified the different value chain configurations global scale and that can be undertaken by one or more and the key decisions in designing the global value chain, firms (Gereffi and Fernandez-Stark, 2011, p. 4). Specifically, namely governance, geographical scope and coordination some scholars point toward a new system called the ‘‘global of activities. Thirdly, we explore the outcomes related to factory’’ (Buckley, 2011; Buckley and Ghauri, 2004), which global value chain configurations in terms of performance entails the organization of activities in a complex configura- and upgrading. Finally, we suggest future lines of research tion. This system describes how firms may reduce location and establish the conclusions that can be drawn from the and transaction costs by orchestrating the global value chain study. in such a way that all activities are linked by international flows of intermediate products that the MNC controls but does not necessarily own, and where knowledge is increas- Global value chains: concept and activities ingly internalized (Buckley and Strange, 2015). One of the crucial aspects of building an overview of Over the years, scholars have analyzed different termi- global value chain configuration is therefore an examina- nology to define how firms organize activities such as tion of the activities involved, which can be grouped based commodity chains (Gereffi and Korzeniewicz, 1994; Selwyn, on different criteria (see Table 1). Porter (1991) differ-