When Suppliers Climb the Value Chain: A Theory of Value Distribution in Vertical Relationships
研究了新兴市场供应商通过为西方企业供货发展能力、进而可能进入产品市场与买方竞争的现象，分析了这种价值链攀升如何影响垂直关系中的价值分配，并揭示了买方的最优选择如何随供应商能力发展动态变化。
Although offshore outsourcing has become an important strategy to lower production costs among Western firms, it gives rise to the phenomenon of value chain climbing—suppliers in emerging markets can develop capabilities by supplying, with aspirations to compete with the buyers in the product market. We build an analytical model to study the impact of value chain climbing on value distribution in vertical relationships. The analysis identifies a set of dominant relationships, characterizes how the buyer’s optimal choice among these relationships depends on firms’ relative competitiveness in the product market and the supplier’s speed of capability development, and shows how the optimal choice evolves with the dynamics of the supplier’s capability development. The results provide new insights into our understanding of value distribution in vertical relationships across different contexts and over time. By endogenizing the supplier’s entry into the product market, our study enriches the literatures on vertical relationships, market entry, and the management of global value chains. This paper was accepted by Bruno Cassiman, business strategy.