Relational governance as firms’ upgrading boost

As a result of globalization, Supply Chains (SCs) are nowadays global in nature, crossing several countries before reaching the final customers. In this sense, the Global Value Chain (GVC) analysis can be beneficial to SC management by bringing new lenses of analysis, through the concepts of governance (i.e., inter-firm relationships) and upgrading (i.e., capturing a higher share of value added). By taking a firm level perspective, the aim of this paper is to extend the current state of the art by testing on a large scale sample to what extent the degree of explicit coordination with suppliers and customers (i.e., one key characteristic of governance) affects the different typologies of upgrading. Moreover, we verify whether explicit coordination with suppliers and customers is more effective for companies which participate in a GVC (i.e., have a high share of purchases and sales from/to foreign countries) or are based in a developing country. The analysis is based on more than 500 manufacturing plants from 20 countries in the ISIC code range 25-30 (assembly industries) surveyed in 2014 within the International Manufacturing Strategy Survey project. The results confirm that explicit coordination with customers and suppliers positively affects upgrading. However, different typologies of upgrading are affected differently by the explicit coordination when considering the degree of participation in the GVC and the location of the plant (developing/developed) country.