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Ari Van Assche

HEC Montréal

Ari Van Assche is Professor of International Business at HEC Montréal, deputy editor of the Journal of International Business Policy, and co-founder of the International Institute of Economic Diplomacy. His research focuses on the organization of global value chains and their implications for international trade, industrial clusters and public policy.
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publication
The nature of innovation in global value chains

Global value chains (GVCs) have revolutionized production processes and many companies no longer produce goods and services entirely in one single country or within their own organizational boundaries. Through offshoring and outsourcing, value chains are sliced up and activities are dispersed to locations and actors where they can be produced or executed most efficiently. The fine slicing of GVCs also implies that innovation activities can be geographically dispersed and separated from other GVC activities. However, there have been inconsistent arguments on the impact of this dispersion on innovations and on the effect of innovations on GVC activities, as research on the topic has been sporadic, inconclusive, and fragmented. Thus, this paper conceptually discusses the nature of innovation in GVCs by reviewing literature and raises important questions that should be addressed. It also outlines a variety of possible research directions and future research foci that can and should be taken to develop the field.

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publication
Global value Chain Governance: A Multinational Enterprise Capabilities View

The drivers of economic globalization are leading many firms to disaggregate and redistribute their operations by outsourcing and offshoring. The result of the process is to create global value chains (GVCs) that are a collection of loosely affiliated, spatially distributed firms engaged in bringing products from raw materials to end use. A key insight from previous research is that GVCs are typically orchestrated by multinational enterprises (MNEs) given their control over key markets or critical technologies. Yet, very little is known about the emerging phenomenon in which MNEs appear to control production along the GVC without ownership of those assets. This is an important issue as consumers, regulators, and civil society are holding flagship MNEs increasingly responsible for behavior and performance along their entire GVC. This chapter analyzes GVC governance to highlight the fact that MNEs often require specific types of capabilities that relate to the context of their industry and the GVC in which they are embedded. The dynamic capabilities approach is extended to explore the ways and means of GVC governance by lead MNEs to shed new light on the contextual differences that influence the resources and capabilities required to improve GVC performance.

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publication
Functional upgrading in China's export processing sector

Functional upgrading occurs when a firm acquires more sophisticated functions within an existing value chain. In this paper, we analyze if there is evidence of this type of upgrading in China's export processing regime by investigating dynamics in the relative prevalence of Import & Assembly (IA) versus Pure Assembly (PA) processing trade over the period 2000–2013. Firms in both regimes provide similar manufacturing services to foreign companies, but IA firms also conduct the sophisticated tasks of quality control, searching, financing and storing imported materials. Consistent with a trend of functional upgrading, we show that the share of IA trade in total processing trade has increased rapidly during the period 2000–2006, both overall and within product categories. Furthermore, we find that this trend has gone hand in hand with improvements in a sector's labor productivity and unit values. Against expectations, we find that this process has slowed down notably during the period 2006–2013.

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