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Enabling SMEs’ Learning from Global Value Chains: Linking the Logic of Power and the Logic of Embeddedness of Interfirm Relations

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Abstract

Small-and-medium-sized enterprises (SME) often need to draw on the knowledge of their supply chain partners to remain innovative and competitive in the marketplace. In the context of global value chains (GVC), this study examines the factors enabling the learning of SMEs from their GVC dependence by applying the logic of power and the logic of embeddedness. Specifically, we identify the technical adaptation of SMEs in the GVC as a response to their interdependence on the GVC following the logic of power, and an action that heightens information exchange and interorganizational learning at the dyad level following the logic of embeddedness. Linking these logics, we hypothesize that the technical adaptation of an SME mediates the relationship between its GVC dependence and its learning outcome from the GVC, namely the knowledge transfer it receives. Furthermore, this mediating role is stronger when the SME has a longer history of transactional relationship with its GVC partners which amplifies the logic of power, and when it possesses a higher level of financial slack which strengthens the logic of embeddedness. Using multi-sourced survey data from 292 Thai manufacturing SMEs, we find substantial support for the hypothesized relationships. Our findings offer theoretical and practical implications in terms of enabling and supporting the learning pathway of SMEs participating in the GVC.

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Authors and Affiliations

  1. Thammasat University, Bangkok, Thailand

    Thanyaporn Soontornthum

  2. The Australian National University, Canberra, Australia

    Lin Cui & Vinh N. Lu

  3. National Research Base of Intelligent Manufacturing Service, Chongqing Technology and Business University, Chongqing, People’s Republic of China

    Jiafu Su

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  1. Thanyaporn Soontornthum
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  2. Lin Cui
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Appendix: Procedural and Statistical Remedies for CMV

Appendix: Procedural and Statistical Remedies for CMV

Remedies and rationales

Implementation

Procedural

 

 Protecting respondent anonymity

We guaranteed complete anonymity to all respondents and urged them to answer each question as honesty as possible because the results will only be presented in aggregate form; third parties will not be able to identify respondent who participated in this survey. We expected that respondent anonymity minimizes survey participants’ tendency to make socially desirable responses when giving their responses

 Reducing item ambiguity

Item ambiguity was minimized by keeping questionnaire items straightforward, avoiding vague concepts and double-barreled questions. These techniques are expected to establish distinctive content for items measuring all variables. Additionally, all questionnaire items and wordings were pretested and carefully considered and validated by business executive and strategic management scholars. Thus, ambiguous words were replaced prior to survey distribution

 Separating scale items

We placed measurement items for 1) GVC dependence and 2) knowledge transfer on different pages to reduce the likelihood that respondents guess the relationship between focal variables in this study and may consciously match their responses between independent and dependent variable

 Data from different respondents

We obtained data from two respondents in each organization. Top managers (Respondent 1) were asked to respond to question set 1 containing items measuring GVC dependence, knowledge transfer, moderators and several control variables, while senior managers responsible for operations and technology (Respondent 2) were asked to respond to items measuring mediation variable (i.e., network embeddedness). We expected that using two respondents helps control single-informant bias

Statistical

 

 Partial correlation adjustment

Historical position was used as marker variable, as it has the smallest positive correlations with other focal variables. All significant zero-order correlations remained significant after the partial correlation adjustment, indicating that common method bias was not a serious issue in this data set

 Harman’s one-factor test

A single-factor procedure test was performed to test potential common method bias. An unrotated principal components factor analysis revealed four factors with eigenvalues greater than 1.0, which together accounted for 75.89% of the total variance. Also, the first (largest) factor did not account for a majority of the variance (40.06%)

 Significance of the interaction terms

Our interaction terms are significant. This result is unlikely to be driven by individual rater’s bias as it is implausible that individuals’ cognitive map will consciously theorize moderated mediation relationships when responding questionnaires, signifying a low chance for common method variance effects

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Soontornthum, T., Cui, L., Lu, V.N. et al. Enabling SMEs’ Learning from Global Value Chains: Linking the Logic of Power and the Logic of Embeddedness of Interfirm Relations. Manag Int Rev 60, 543–571 (2020). https://doi.org/10.1007/s11575-020-00425-8

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