| Global Value Chain Participation and Upgrading of Emerging Market Firms: A Resource Dependence Logic |
Received:October 15, 2017 Revised:October 15, 2017 |
Key Words: Original equipment manufacturers (OEMs); export; buyer-seller relationship; resource dependence theory (RDT); research and development (R&D) |
| Author Name | Affiliation | | Ziyan Zhu | Renmin University of China | | Ziliang Deng* | Renmin University of China |
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Abstract: |
| Original equipment manufacturing and processing trade is a widely adopted way of participating the global value chain for the emerging market firms. However, original equipment manufacturers (OEMs) are facing huge uncertainty caused by dependence upon their outsourcing firms. To reduce such dependency and secure sustainable development, OEMs need to take actions to upgrade their position in such a seller-buyer relationship. From the perspective of resource dependence theory (RDT), we hypothesize that the interdependency between OEMs (sellers) and outsourcing firms (buyers) stimulates OEMs to increase their expenditure on research and development (R&D) to upgrade their technological capabilities. We further hypothesize that both the OEMs’ financial ability and the pressure from losing the outsourcing firms positively moderates the relationship between OEM dependency and R&D upgrading. With firm-level panel data from Chinese exporters, Tobit models generate evidence supporting the hypotheses. The study contributes to the literature on international buyer-seller relationships based on the resource dependence theory. |
