Cross-sectoral Knowledge Spillover for Social Innovation in an Apparel Value Chain in B2B Industry: A Perception of Incumbent Company in a Global South

Cross-sectoral knowledge spillover in the apparel value chain enables incumbent firms in the Global South to transform industry challenges into social innovation (SI) opportunities, redefining B2B dynamics through collaborative learning. This study explores knowledge spillover mechanisms in the B2B apparel value chain, particularly between dominant buyers in the Global North and apparel industries in the Global South. Still, it is largely unclear what knowledge spillover is made of and how it happens. It investigates how buyers facilitate SI practices and how local production firms adapt them to their operational environments. The research employs a qualitative approach using a single case study method. Data collection includes document analysis and in-depth interviews with managers, supervisors, and employees. Thematic analysis, supported by NVivo software, is used to interpret the data. The study finds that SI is embedded within new business models introduced by incumbent firms. Several SI practices contribute to sustainability transitions, enhancing corporate image and legitimacy amid global competition. Additionally, buyer-imposed conditions such as job quality, gender equality, and inclusion are transformed into economic empowerment and livelihood improvements for machine operators in local firms. The research provides valuable insights into how businesses in the Global South can effectively localize global SI practices to enhance sustainability and improve working conditions. It highlights the role of international buyers in shaping responsible business practices through knowledge spillover. The study underscores the importance of SI in addressing human rights concerns, improving labour conditions, and promoting economic empowerment within the apparel industry. This study contributes to the ongoing discourse on the business-society relationship by highlighting the transformative potential of SI in the apparel sector. It offers a nuanced perspective on how firms localize global knowledge to drive sustainability transitions, thereby enriching the understanding of knowledge spillover in the global value chains.