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Multinational enterprises in labor-intensive GVCs: examining aspects of productivity, linkage and control without ownership

Wahed, M. S. (2025) Multinational enterprises in labor-intensive GVCs: examining aspects of productivity, linkage and control without ownership. PhD thesis, University of Reading

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To link to this item DOI: 10.48683/1926.00125094

Abstract/Summary

This thesis examines the multinational enterprises (MNEs) operating within labor-intensive global value chains (GVCs)—a category of MNEs that remains relatively understudied in the international business (IB) literature. While the dominant discourse in IB has traditionally focused on large, hierarchically integrated MNEs with strong firm specific asset (FSA) based advantages and equity-based control mechanisms, this thesis shifts the focus to MNEs that act as either lead or supplier firms within labor-intensive GVCs, particularly, where control is decoupled from ownership. The research addresses conceptual gaps around how these MNEs establish and sustain competitiveness and governance as they operate in GVCs. The thesis draws on and extends FSA theory, classifying FSAs into asset-type FSA (FSAA), transaction-type FSA (FSAT), and recombinant type FSA (FSAR) categories, and investigates how these are deployed by MNEs in low-tech, high-labor contexts. The empirical analysis is based on three papers, each contributing a distinct lens. The first two papers focus on supplier MNEs (SMNEs) operating in Bangladesh’s Export Processing Zones (EPZs), using quantitative firm-level data to explore issues of productivity and cost competitiveness relative to domestic supplier firms. The third paper adopts a qualitative case study approach, drawing on interviews and documentary analysis within the Bangladeshi apparel industry beyond EPZs, to examine how lead firms exert control over suppliers in multi-tiered GVCs without equity ownership. Key findings include the following: • SMNEs in labor-intensive sectors often possess weak FSAA, given the limited technological complexity of their operations. However, some SMNEs that successfully leverage FSAT and / or FSAR based on the degree of multinatioanlity may outperform domestic rivals in both productivity and cost terms. The thesis contributes to the FSA theory by empirically demonstrating that FSAT and/or FSAR may, in certain contexts, overcome the deficiencies in FSAA, especially, in sectors dominated by low-skilled labor and commodified input materials. • The thesis also reveals how lead firms in apparel GVCs allow participation of OEM first-tier suppliers firms in a split governance arrangement and still maintain control without ownership along the apparel GVCs. Overall, the thesis makes both theoretical and empirical contributions to the IB field by expanding the applicability of FSA theory and offering new insights into non-equity governance, and situating Bangladesh as a strategic context for understanding how MNEs operate in labor-intensive sectors. The findings carry implications for managers, policymakers, and scholars interested in the evolving nature of global production, industrial upgrading, and sustainable GVC governance.

Item Type:Thesis (PhD)
Thesis Supervisor:Narula, R.
Thesis/Report Department:Henley Business School
Identification Number/DOI:10.48683/1926.00125094
Divisions:Henley Business School > International Business and Strategy
ID Code:125094
Date on Title Page:2023

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