Abstract:PurposeUnder the global value chain (GVC) approach, this paper aims to analyze how domestic suppliers on the periphery of the automotive industry are affected by their relationship with foreign multinationals.Design/methodology/approachA case study with primary data collected from foreign multinationals operating in the Mexican automotive industry was used to analyze their relationship with domestic suppliers.FindingsThe evolution of the suppliers has been characterized by improved quality and added value in t… Show more
“…Upfront investment in increasing the durability and quality of products/systems can reduce holding and ordering costs for spare parts, as well as decrease maintenance and repair costs, thus, increasing the availability of the product/system. On the other hand, this upfront investment poses a dilemma by generating greater dependence on suppliers by causing a more intense relationship (Hypko et al , 2010b; Lampón et al , 2021) in PBC that reduces the control of buyers in future contracts. These research findings highlight the significant impact of PBC features on financial benefits and the mediation effect of quality investment between PBC features and financial benefits.…”
Purpose
Performance-based contracting (PBC) has been gaining popularity over the years. However, empirical studies investigating the impact of PBC features have been limited. The main purpose of this study is to investigate the effect of PBC features leading to quality investment that fosters financial benefits.
Design/methodology/approach
After examining the validity and reliability of scale items through confirmatory factor analysis, this study tested hypotheses using covariance-based structural equation modeling of survey data from 381 supply, logistics and operations managers.
Findings
The findings reveal the impact of PBC features (joint knowledge generation, goal congruence and incentive alignment) on financial benefits and the mediation impact of quality investment between these features and financial benefits. The upfront investment for quality enhancement was found facilitator of PBC features to achieve financial benefits. The findings also reveal the importance of collaborative communication and information sharing for knowledge generation that leads financial benefits through quality investment. This study shows that PBC governance strengthens the theory of relational view by empowering collaborative efforts and aligning goals and incentives within downstream suppliers for knowledge generation and quality enhancement.
Research limitations/implications
An analysis of PBC features by industry would be very beneficial in differentiating between and more thoroughly understanding the commonalities and differences across various sectors. Investigating how these change across industries would also help identify any bias in PBC implementation.
Practical implications
This study illustrates that it will be practical and beneficial for suppliers to understand the major drivers of quality investment and the relationship between quality investment and the financial benefits of selecting PBC.
Originality/value
Unlike most previous studies, this research contributes to the literature in that it is one of the relatively few examples of empirical research on PBC features. Overall, the findings of this study will improve our understanding of how PBC features enhance upfront investment in quality and improve financial benefits.
“…Upfront investment in increasing the durability and quality of products/systems can reduce holding and ordering costs for spare parts, as well as decrease maintenance and repair costs, thus, increasing the availability of the product/system. On the other hand, this upfront investment poses a dilemma by generating greater dependence on suppliers by causing a more intense relationship (Hypko et al , 2010b; Lampón et al , 2021) in PBC that reduces the control of buyers in future contracts. These research findings highlight the significant impact of PBC features on financial benefits and the mediation effect of quality investment between PBC features and financial benefits.…”
Purpose
Performance-based contracting (PBC) has been gaining popularity over the years. However, empirical studies investigating the impact of PBC features have been limited. The main purpose of this study is to investigate the effect of PBC features leading to quality investment that fosters financial benefits.
Design/methodology/approach
After examining the validity and reliability of scale items through confirmatory factor analysis, this study tested hypotheses using covariance-based structural equation modeling of survey data from 381 supply, logistics and operations managers.
Findings
The findings reveal the impact of PBC features (joint knowledge generation, goal congruence and incentive alignment) on financial benefits and the mediation impact of quality investment between these features and financial benefits. The upfront investment for quality enhancement was found facilitator of PBC features to achieve financial benefits. The findings also reveal the importance of collaborative communication and information sharing for knowledge generation that leads financial benefits through quality investment. This study shows that PBC governance strengthens the theory of relational view by empowering collaborative efforts and aligning goals and incentives within downstream suppliers for knowledge generation and quality enhancement.
Research limitations/implications
An analysis of PBC features by industry would be very beneficial in differentiating between and more thoroughly understanding the commonalities and differences across various sectors. Investigating how these change across industries would also help identify any bias in PBC implementation.
Practical implications
This study illustrates that it will be practical and beneficial for suppliers to understand the major drivers of quality investment and the relationship between quality investment and the financial benefits of selecting PBC.
Originality/value
Unlike most previous studies, this research contributes to the literature in that it is one of the relatively few examples of empirical research on PBC features. Overall, the findings of this study will improve our understanding of how PBC features enhance upfront investment in quality and improve financial benefits.
“…Active technology learning and passive knowledge introduction could promote the diffusion of technology and knowledge to the agricultural and associated sectors in exporting countries [48]. By using the latter pathway, during the importing process, advanced marketing concepts and means and production technology are attached to intermediate products to form technological spillovers, and importing countries use advanced marketing concepts and means and production technology attached to imported intermediate goods to imitate, digest, innovate, and promote domestic technological innovation [49,50] and improvement in agricultural TFP.…”
Section: The Indirect Impact Pathways Of Agricultural Gvc Participati...mentioning
Under the condition of opening up, participation in international specialization and global value chains (GVCs) has become the main source for more and more countries to obtain foreign resources and advanced technologies, thereby promoting productivity improvement and technological progress. What are the pathways of agricultural GVC participation that affect agricultural total factor productivity (TFP)? Is the impact of agricultural GVC participation on agricultural TFP consistent across different statuses and modes of agricultural GVC participation? This paper elaborates on the theoretical mechanism of agricultural GVC participation affecting agricultural TFP, and then empirically estimates the impact of different statuses and modes of agricultural GVC participation on agricultural TFP by taking 58 countries as examples. The results show that agricultural GVCs affect agricultural TFP by several direct and indirect pathways. There was a U-shaped relationship between agricultural GVC participation and agricultural TFP, which means that after crossing a certain threshold, the former has a positive impact on the latter. By participating in agricultural GVCs, agricultural TFP in high-income and upper-middle-income countries was significantly improved, while in lower-middle-income countries it was not. Both forward and backward agricultural GVC participation were conducive to improving agricultural TFP in high-income and upper-middle-income countries, but only backward agricultural GVC participation was conducive to improving agricultural TFP in lower-middle-income countries. Therefore, every country needs to actively explore its optimal pathway to participate in agricultural GVCs in order to maximize the participation benefits and promote the improvement in agricultural TFP, simultaneously.
“…Estas empresas líderes ejercen el control sobre las demás empresas de la cadena de valor a través de relaciones de poder asimétricas (Sturgeon et al, 2008). En este contexto, estas empresas líderes tienen la capacidad para elegir y reemplazar a sus proveedores y, por lo tanto, deciden las condiciones de suministro (Ozatagan, 2011;Lampón et al, 2021b).…”
Section: El Punto De Partida: La Cadena De Valor Global Tradicional D...unclassified
Este trabajo reflexiona sobre los principales retos que afronta la industria del automóvil y su impacto en los elementos de la cadena de valor global. La movilidad avanzada ligada al vehículo autónomo, la conectividad y la sostenibilidad han sido identificados como los factores clave que están reconfigurando la cadena de valor. Los nuevos actores ligados a esta movilidad avanzada han adquirido un elevado poder de decisión, posicionándose en los primeros niveles de suministro y participando de las actividades de mayor valor añadido e innovación tecnológica, reconfigurando el modelo de gobernanza y la geografía productiva de la cadena de valor global tradicional
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