Financialized corporate strategies and restructuring of global supply chains

Newman, Susan (2012). Financialized corporate strategies and restructuring of global supply chains. In DevIssues International Institute of Social Studies, The Hague.

Abstract

Industrial organization and Inter-firm relations within vertically disintegrated and spatially dispersed production systems emerged as a burgeoning area of research in the 1990s and 2000s across what might be broadly considered as development studies (see the article by Wouter Jacobs in this issue). Global commodity chain/global value chain approaches were initially concerned with the nature of ‘globalization’ in contemporary capitalism and the way in which developing countries have been integrated into the global economic system. These studies emphasized the need, as well as the opportunities, for developing country firms to ‘upgrade’- that is to engage in higher value-added activities associated with downstream portions of the chain - in order to reap the potential rewards of integration into the global economy. Whether or not the opportunities for upgrading and their associated benefits were overstated at the time, it will become clear in what remains of this article that benefits of upgrading, if they existed at all in the first place, have all but disappeared with shifts in corporate structure and strategies of lead firms in the U.S and Europe – those which coordinate and control supply chains and suppliers in developing countries – associated with the process of financialisation.