A Configurational Framework for Supplier Upgrading in Global Value Chains

ABSTRACT Rapid growth in large emerging markets, such as China and India, has prompted an impressive number of emerging market suppliers in global value chains (GVCs) to upgrade. However, existing GVC frameworks do not provide detailed causal mechanisms of the supplier upgrading phenomenon. In contrast with previous studies that focus on pre‐defined and sequential pathways, this study draws upon a configurational framework and proposes that supplier upgrading depends on interactions between governance mechanisms, technological capabilities, and environmental dynamics. Applying fuzzy‐set qualitative comparative analysis (fsQCA) to 67 suppliers in China, this study identifies three pathways that could impel emerging market suppliers to upgrade, namely innovation capability, technological breakthrough, and symbiotic developmental orientations. By highlighting the role of interactive mechanisms across different levels in enabling upgrading, this study explains how these antecedents are employed by suppliers and how the antecedents enable different upgrading pathways. The findings enrich the current GVC upgrading literature and provide implications for emerging market suppliers that are upgrading within GVCs.