Kapelle , Jakob; G äbne -Radkowi sch, Claudius; Ho nykewycz, Anna
A icle — Published Ve sion
Co po a e powe and global alue chains: cu en
app oaches o concep ualizing he powe o
mul ina ionals
Re iew o E olu iona y Poli ical Economy
P o ided in Coope a ion wi h:
Sp inge Na u e
Sugges ed Ci a ion: Kapelle , Jakob; G äbne -Radkowi sch, Claudius; Ho nykewycz, Anna (2024) :
Co po a e powe and global alue chains: cu en app oaches o concep ualizing he powe o
mul ina ionals, Re iew o E olu iona y Poli ical Economy, ISSN 2662-6144, Sp inge In e na ional
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Re iew o E olu iona y Poli ical Economy (2024) 5:371–397
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ORIGINAL PAPER
Co po a e powe and global alue chains: cu en
app oaches o concep ualizing he powe
o mul ina ionals
Jakob Kapelle 1,2 ·Claudius G äbne -Radkowi sch2,3 ·
Anna Ho nykewycz2
Recei ed: 2 Janua y 2024 / Accep ed: 28 May 2024 / Published online: 19 June 2024
© The Au ho (s) 2024
Abs ac
The in luen ial posi ion o mul ina ional co po a ions in he global economy o he
wen y- i s cen u y is a pa icula ly con o e sial and imely subjec . This pape aims
o imp o e ou unde s anding o his phenomenon by ocusing on one pa icula aspec
o i : co po a e powe . To his end, i i s pu s o h a numbe o concep ual cla i ica-
ions ha help o dis inguish di e en kinds o powe and he dis inc analy ical le els
a which powe is execu ed. I hen ocuses on co po a e powe and s udies i agains
he backd op o he de elopmen o global alue chains. The aim o his analysis is
wo old: i s ly, o e iew he a ie y o analy ical ools and on ological pe spec i es
ha coin cu en esea ch on co po a e powe , and secondly, o discuss he causes and
p ac ical consequences o asymme ical powe cons ella ions among co po a ions and
be ween co po a ions and o he ac o s. This discussion is mean o acili a e a be e
alignmen o applied esea ch on co po a e powe wi h plu alis app oaches owa ds
e hinking economics.
Keywo ds Powe ·Co po a ions ·Co po a e powe ·Globaliza ion ·Ne wo ks ·
Race o he bes loca ion
JEL Classi ica ion B50 ·F55 ·F60 ·F63 ·P12
This con ibu ion is based on a ela ed a icle p e iously published in Ge man in Fische e al. (2021).
BAnna Ho nykewycz
anna.ho nyke[email p o ec ed]
Jakob Kapelle
jakob[email p o ec ed]
Claudius G äbne -Radkowi sch
claudius@claudius-g aebne .com
1Ins i u e o Socio-Economics, Uni e si y o Duisbu g-Essen, Duisbu g, Ge many
2Ins i u e o Comp ehensi e Analysis o he Economy (ICAE), Johannes Keple Uni e si y Linz,
Linz, Aus ia
3Depa men o Plu alis Economics, Eu opa-Uni e si y Flensbu g, Flensbu g, Ge many
123
J.Kapelle e al.
1 In oduc ion
“The e has ne e been any doub ha
whoe e con ols access o he ci izens’
li elihood exe cises poli ical con ol.”
(D ucke 1962)
In oday’s globalized economies, mul ina ional co po a ions (MNCs) a e o en seen
as embodying he a che ype o co po a e powe . Due o hei mul ina ional s uc-
u e, hese co po a ions enjoy g ea e oppo uni ies o ac ion, hus enabling hem o
go beyond mo e adi ional unde s andings o co po a e powe , which ha e ocused
p ima ily on issues o ma ke powe and business s a egy, p ice- and wage-se ing
decisions, o ques ions o R&D and p oduc design ( o ea lie he e odox analyses
ha conside co po a e powe mo e b oadly bu wi hou an explici ocus on mul ina-
ionals, see, e.g., Veblen (2022); Robinson (1962), and Galb ai h (1998), espec i ely).
Ra he , due o hei excep ional size and mul ina ional s uc u e, MNCs con ol sig-
ni ican sha es o global p oduc ion and dis ibu ion. Thei s a egic decisions—e.g.,
on whe e o in es o pay axes—di ec ly impac local and egional economic de el-
opmen s. This mo i a es he in es iga ion o he na u e, sou ces, and consequences o
hei powe .
F om a his o ical pe spec i e, in e na ionally ope a ing co po a ions a e no a new
phenomenon. They ha e been unde s ood as ele an and in luen ial ins i u ions since,
a hela es , he“ i s globaliza ion,”ape iod oma ound1870 o1914which ollowed
he indus ial e olu ion, and ha was cha ac e ized by a signi ican inc ease in in e -
na ional economic in eg a ion (Fi zge ald 2015, Chap e 2). Thei o igins, howe e ,
ex end e en u he back in o he pas , a leas o he comme cial age, he p e-indus ial
e a o in e na ional sea- and long-dis ance ade (app oxima ely 1500–1800 acco ding
oAllen (2011)).This e awas pi o al o shaping he pa h-dependen long- e m g ow h
ends associa ed wi h he so-called G ea Di e gence, and he socio-economic s uc-
u es ha we e o med in his e a a e ecognized as endu ing and ele an by se e al
he e odox app oaches, such as he wo ld-sys ems analysis (F ame 2022; A ighi and
Sil e 1999; Walle s ein 2011, e.g.) o dependency heo y (K ang a en 2020, e.g.),
as well as b oade mo emen s such as deg ow h (G äbne -Radkowi sch and S unk
2023, e.g.).
And indeed, mul ina ional i ms ha e played an impo an ole in shaping and p e-
se ing his pa h dependency. Ea ly examples, such as he Eas India Companies,
which we e ounded in 1600 (B i ain) and 1602 ( he Ne he lands), illus a e his his-
o ical ele ance o MNCs om a longue du ee pe spec i e (see, e.g., B audel and
Walle s ein (2009)) and indica e he in insic connec ion o such a his o ical pe spec-
i e o a pos colonial pe spec i e on he ele ance o MNCs, global alue chains,
and socio-economic de elopmen (see, e.g., Alami e al. 2023, and below). Howe e ,
despi e his his o ical con inui y, ecen decades showed a quali a i e shi in he ole
o co po a ions bo h wi hin socie y and globally.
The libe aliza ion o capi al ma ke s ollowing he collapse o he B e on-Woods
egime in 1973 is conside ed a cen al ac o in his con ex (Eicheng een 2010)as
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Co po a e powe and global alue chains...
i allowed o a hi he o unseen expansion o in e na ional inancial capi al, which
made acquisi ions o p ope y in he Global Sou h by MNCs much easie . Hence, his
shi con ibu ed o an expansion o he scope and sphe e o in luence o MNCs and
signi ican ly s eng hened hei nego ia ing posi ion compa ed o o he ac o s—such
as wo ke s, go e nmen s, o smalle i ms (Ro hschild 2005). I is his de elopmen
ha caused a ma ked inc ease in he signi icance (and powe ) o MNCs in ecen
decades, and ha mo i a es his pape .
Alongside o in pa allel o he collapse o he B e on-Woods egime and he abol-
ishing o egula ions, ano he de elopmen essen ial o unde s anding he pa icula ly
p i ileged posi ion o MNCs in oday’s global capi alism is he inc easing impo ance,
dep h, and di e en ia ion o global alue chains (GVCs). As MNCs a e ypically said
o c ea e, shape, and go e n (ce ain segmen s o ) GVCs, he inc easing impo ance
o he la e is bo h a p e equisi e o and a consequence o he in e na ionaliza ion
o i ms. This mu ually dependen ela ionship indica es a co-e olu ion be ween he
inc ease in powe o MNCs and he g owing in e na ionaliza ion o p oduc ion p o-
cesses and alue chains. I also implies ha GVCs play a cen al ole in unde s anding
why MNCs agglome a e powe and which s a egies a e used o inc ease, execu e, and
s abilize his powe . Agains his backd op, a close examina ion o co po a e powe
wi hin he con ex o GVCs seems o be a ac i e.
To p o ide a s a ing poin o such an examina ion, his a icle se s ou o do wo
hings: (1) o e iew he a ie y o analy ical ools and on ological pe spec i es ha
coin cu en esea ch on co po a e powe and (2) o discuss he causes and p ac ical
consequences o asymme ical powe cons ella ions among i ms as well as be ween
MNCs and o he ac o s, like go e nmen s o unions.
By doing so, his a icle also ies o con ibu e o a mo e gene al agenda, namely
o acili a e a be e alignmen o di e en s ands o li e a u e on co po a e powe ,
classic heo ies o powe om he e odox economics, ecen con ibu ions om pos -
colonial s udies (Go, 2016), and plu alis app oaches owa ds e hinking economics.
Such an alignmen seems a ac i e, because se e al co e commonali ies among hese
app oaches a e immedia ely e iden , such as a ocus on ela ions and ne wo ks and he
conside a ion o dis ibu ional issues and associa ed powe asymme ies. A he same
ime, any a emp o iangula e concep s om hi he o sepa a ed domains equi es a
common me a- heo e ical amewo k ha supplies he glue o he in eg a ion, usually
in he o m o a sha ed language, a consis en on ology, and a common epis emology.
The amewo k we use he e is ha o Ma io Bunge’s “sys emism” (see Bunge, 1996;
Bunge,2004),which hasbeen a gued op o idea use ul amewo k o he e odoxeco-
nomics in gene al (G abne and Kapelle 2017). The undamen al on ological objec in
Bunge’s sys emism is he “sys em.” Mo e p ecisely, acco ding o Bunge, e e y en i y
should be conside ed a sys em o a pa o one. Sys ems, in his sense, a e cons i-
u ed by h ee co e elemen s—(1) basic pa s, (2) an en i onmen , and (3) a ela ional
s uc u e— ha e en ually b ing o h (new) mechanisms (Bunge 2004). As will be
shown below, his e y gene al bluep in will p o e use ul in in eg a ing con ibu ions
on co po a e powe and GVCs om di e en in ellec ual domains, which ini ially all
come wi h hei sligh ly dis inc e ms.
123
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J.Kapelle e al.
The pape is ou lined as ollows. Fi s , Sec .2in oduces basic concep s and de ini-
ions, whe eas in Sec .3, we discuss cen al heo ies o (co po a e) powe and de elop
ananaly ical heu is ic ha willenableou u he analysiso co po a epowe inGVCs.
In Sec s.4and 5, we hen in oduce di e en ways o explain (pa e ns o ) co po a e
powe and illus a e he ela ed di e si y o app oaches owa ds analyzing co po a e
powe , which we g oup and summa ize wi h espec o di e en le els o analysis.
InSec .6,weconclude he pape by aking he ela ionbe weeninc easingco po a e
powe and ising inequali y as an example o illumina e some global consequences
associa ed wi h he his o ical ise o MNCs in he age o (hype -)globaliza ion.
2 A sys emis app oach o co po a e powe : co e e ms and concep s
Acco ding o con en ional de ini ions, a (global) alue chain consis s o labo and
p oduc ion s eps ha build upon ano he o culmina e in a consume - eady p oduc
(Hopkins and Walle s ein 1986). MNCs a e unde s ood as ansna ionally ope a ing
en i ies ha a e engaged in mul iple alue chains (ho izon al in eg a ion) and/o a -
ious s ages wi hin he same alue chain ( e ical in eg a ion). Bo h phenomena can
be hough o (o ep esen ed) as o e lapping ne wo ks: GVCs a ise om a ne wo k
o in e connec ed ye locally sepa a ed labo and p oduc ion ac i i ies, while MNCs
ypically co e a speci ic segmen o his ne wo k o GVCs. Applied esea ch ha
in es iga es he cons i u ion and change o speci ic GVCs can, hence, be di e en i-
a ed om esea ch ha ocuses mo e speci ically on how ce ain (segmen s o ) GVCs
a e go e ned by speci ic MNCs o c ea e so-called global p oduc ion ne wo ks (GPN)
(Neilson e al. 2014).
This way o concep ualizing MNCs and hei associa ed GVCs aligns nicely wi h
Bunge’s sys emism and i s de ini ion o sys em desc ibed abo e since i is s aigh -
o wa d o conside MNCs and he associa ed GVCs and GPNs as social sys ems.
The conside a ion o ela ional s uc u es in sys emism p o es o be especially use ul
in ou con ex as i p o ides a clea link o es ablished concep ualiza ions o MNCs
and GVCs, which a e o en ep esen ed as (o e lapping) ne wo ks, e.g., when Dicken
(2015, p. 130) de ines MNCs as “ne wo ks wi hin ne wo ks,” He e, a mul ina ional
co po a ion is unde s ood as a ne wo k o i ms, loca ions, o con ac ually bound pa -
ne i ms ha is, in u n, embedded in he b oade ne wo k o GVCs. Also, ea ing
co po a ions and GVCs as social (sub-)sys ems has he ad an age o a oid con la ing
hem wi h he associa ed ne wo ks—i makes explici ha such ne wo ks a e coined
and pa ially e en go e ned by local ac o s and subjec ed o en i onmen al in luences,
such as changes in public opinion o in e na ional egula ions.
Figu e1illus a es his pe spec i e and depic s he ypical posi ioning o a MNC
wi hin GVC. I also illus a es he laye ed on ology o Bunge’s sys emism as he en i e
alue chain is conside ed o be a sys em which has ou in e connec ed subsys ems:
(1) he co e co po a e ne wo k a ound he headqua e i m (HQ) as a co e ac o , (2)
a ne wo k o s a egic collabo a ions associa ed di ec ly wi h his co e ac o , (3) a se
o p oduc ion ne wo ks, and (4) a se o dis ibu ion ne wo ks. Each o hese pa s can
be conside ed a sys em in i sel , wi h an associa ed ela ional s uc u e be ween i s
pa s, and speci ic mechanisms ope a ing wi hin and be ween hese subsys ems. This
123
374
Co po a e powe and global alue chains...
Fig. 1 The posi ioning o a mul ina ional co po a ion wi hin ansna ional alue chains, inspi ed by Dicken
(2015, p. 131)
means ha each indi idual ac o (he e: usually i ms) is o be conside ed a single pa
o he sys em, which is embedded in a pa icula posi ion in he o e all alue chain.1
Due o his close en anglemen , we will use he e ms ne wo ks and sys ems la gely
synonymous in wha ollows.
Using his sys emis app oach o unde s and he ole o MNCs wi hin GVCs is
also help ul in highligh ing se e al o he cha ac e is ics o MNCs and GVCs. Fi s ,
he p ecise ela ionship be ween he indi idual ac o s can be qui e he e ogeneous:
each ac o is embedded in di e en subsys ems wi hin he o e all GVC and can be
ela ed o he co e i m in a ious o mal o in o mal ways, including di ec owne ship
ela ionships, long- e m o mal con ac s, o me ely in o mal coope a ion p ac ices.
F om his, i ollows ha each le el and subsys em migh also be a ec ed by di e en
mechanisms, and he sys emis ocabula y makes i easy o explica e his. Second, a
sys emis app oach also makes i easie o highligh he impo ance o how he segmen
o he alue chain go e ned by an MNC is embedded in a agmen ed en i onmen
consis ing o di e en geog aphical loca ions and go e ned by he ac ha he co po-
a e headqua e s has p i ileged access o ac o s ha in luence ins i u ional condi ions.
Thi d, i allows o s udy he abili y o MNCs o o m, s abilize, and exploi special-
ized ne wo ks based on a ge ed unc ional di e en ia ion, ha is, o c ea e a global
p oduc ion ne wo k (GPN). Fo example, i can be used o illus a e he impac o co -
po a e powe on he geog aphy o GPNs, which ypically consis o bo h a p oduc ion
ne wo k in he na ow sense and a co esponding dis ibu ion ne wo k. Th ough such
a dis ibu ion ne wo k, co po a ions aim o co e as la ge an a ea as possible o ensu e
a wide a ailabili y o he espec i e in e media e o inal p oduc s ha a e e en ually
1Following his basic unde s anding allows o adding addi ional laye s o inspec , o ins ance, how he
posi ioning o a i m wi hin a gi en sys em also a ec s i s mo e disagg ega ed subsys ems, such as i s
employees.
123
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J.Kapelle e al.
Table 1 Analy ical ca ego ies o co po a e powe
Dimension Examples o en i ies consid-
e ed
Examples o analy ical ques ions
En i onmen En i ies ou side o he powe
ela ionship o in e es
Which ac o s cons ain he beha io
o he ac o s?
The ins i u ional and na u al
en i onmen in which he ac o s
ope a e
Wha a e he social ules ha s uc-
u e he in e ac ion and exe cise o
powe ?
Componen s Numbe , iden i y, and mo i a-
ion o in ol ed co po a ions
Who a e he co po a ions in ol ed,
wha mo i a es hem and wha a e
hei ese a ion op ions?
Ne wo k s uc u e Rela ionships be ween he com-
ponen s o he sys em
Which co po a ions occupy powe ul
posi ions and why?
How a e ese a ion op ions a ec ed
by he co po a ion’s posi ion in he
ne wo k?
Mechanisms Means o en o cemen o will How do ac o s exe cise powe ? How
is hei powe being challenged?
The analy ical language is consis en wi h Bunge’s sys emism and i s co esponding CESM model (Bunge,
2004). Columns wo and h ee only con ain examples and should no be conside ed o p o ide a comple e
o e e y hing ha could be s udied on his le el
sold o ex e nal pa ies. In con as , p oduc ion ne wo ks a e much mo e punc ually
p esen and locally oo ed. They concen a e especially in indus ial clus e s, coas al
u ban cen e s, and special economic zones, occupying a much smalle space han dis-
ibu ion ne wo ks (Dicken 2015). As a consequence, ac o s in dis ibu ion sys ems
ypically complemen each o he on a spa ial le el, while ac o s in p oduc ion sys-
ems ind hemsel es in compe i i e se ups wi h highe p obabili y— ega dless o he
spa ial dimension.
This heo e ical amewo k sugges s ha a ious on ological le els a e o po en ial
in e es i ones udies hesubjec o co po a epowe .Asindica ed abo e, o achie eou
goal o iangula ing heo ies and concep s om di e en silos o p e ious esea ch,
we use he language and heo y o “sys emism” o map he con ibu ions o exis ing
s udieson o acohe en amewo k.Table1p o ides asumma yandaligns he di e en
le els wi h he essen ial analy ical ca ego ies o Bunge’s sys emism.
Mo e p ecisely, Bunge (2004) sugges s ha o desc ibe any sys em, one would need
o desc ibe (i) he se o i s essen ial pa s (i s “composi ion”), (ii) he en i onmen al
i ems ha a ec o a e a ec ed by he sys em, (iii) he ne wo k s uc u e ha holds
he componen s o he sys ems oge he , and (i ) he cha ac e is ic p ocesses o mech-
anisms ope a ing wi hin he sys em. In Table 1, hese dimensions a e lis ed in he
i s column. The second column con ains some examples o en i ies o which hese
dimensions e e in p ac ice. Column h ee hen gi es examples o ypical analy ical
ques ions posed on his le el.
123
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Co po a e powe and global alue chains...
3 Theo ies o co po a e powe
“[Economics] as a sepa a e science is
un ealis ic. […] I is one elemen – a e y
impo an elemen , i is ue – in a wide
s udy, he science o powe .” Russell
(2004)
Powe is a cen al and ye con es ed concep in he social and economic sciences.
In his con ibu ion, he ocus will be on heo e ical aspec s o powe ha can be
ope a ionalized clea ly. The e o e, in his sec ion, we delinea e manageable concep s,
which acili a e he analysis o conc e e powe ela ions and hei e ec s.
3.1 Classic no ions o powe : di ec and indi ec powe
To ge a i s g asp o he concep o powe , i is help ul o dis inguish be ween di ec
and indi ec o ms o powe exe ion. Di ec o ms o powe exe ion ypically mani-
es in a manne whe e he in ol ed ac o s and hei mu ual connec ions, con lic s, and
dependencies can be iden i ied and named ela i ely clea ly. Consequen ly, he ele-
an powe ela ions a e usually di ec ly obse able, and, in many cases, he a ec ed
ac o s a e also consciously awa e o hem. In con as , indi ec o ms o powe exe -
ion e e o si ua ions in which indi idual ac o s manage o shape basic ideas and
mo i es o social, economic, and poli ical ac ion wi h he e ec ha hei in e es s a e
(e en) be e se ed. This can be due o conscious s a egy, s uc u al asymme ies,
o coinciden al ci cums ances. Typical examples o indi ec o ms o powe exe ion
comp ise s anda diza ion, i.e., echnical es ic ions ha need o be aken in o accoun ,
o hegemony, i.e., p e ailing poli ical ideas (see G az (2019) o a mo e comp ehen-
si e ea men on s anda ds). No wi hs anding he ac ha s anda ds— he esul o
powe exe ion in hese con ex s—a e o en o malized and anspa en , he unde ly-
ing powe exe ion as such is o en no di ec ly iden i iable bu emains a he ague
(Dallas e al., 2019;G az,2019). Consequen ly, i o en goes unno iced by he a ec ed
ac o s. As schola s like Lukes (2005)o Han(2018) a gue, his is p ecisely whe ein
he co e s eng h o indi ec powe exe ion lies.
Di ec powe ela ionsa eeasie odesc ibe,and hei discussionhasalong adi ion
in he social sciences (e.g., Webe (1980); F ench (1956); Dahl (1957)). Following his
adi ion and d awing on Webe (1980, p.28), a speci ic di ec powe ela ion can be
de ined as ollows:
“Powe o A o e B means ha wi hin he social ela ionship o B, A can en o ce
hei own will e en agains he esis ance o B.”
In his pe spec i e, he speci ic con igu a ion o a espec i e powe ela ion depends
signi ican ly on he means a ailable o bo h ac o s. Fo A, he ques ion is by which
means o en o ce hei will o in e es s, while o B, ese a ion op ions ma e . Rese -
a ion op ions (also: exi op ions) can be unde s ood as he nex -bes al e na i e B has
ela i e o complying o he demands o A.
123
377
J.Kapelle e al.
Bo h concep s—means and ese a ion op ions—a e kep abs ac so ha hey can
ake a ious o ms in p ac ice and need o be in e p e ed di e en ly depending on he
si ua ion conside ed. Gene ally, means encompass ca ego ies such as h ea , mone a y
in luence, posi ion, sanc ion, iolence, cunning, social ela ionships, nego ia ion, o
con ac (as al eady poin ed ou by Machia elli (2003)). While he ca ego ies consid-
e eda esimila o ese a ionop ions, he ocushe eisonB’ssecond-bes op ion (i.e.,
hei exi op ion). Theo ies o con inuous powe ela ions, he e o e, o en es ablish a
di ec connec ion be ween he means o A and he ese a ion op ions o B.
Mos a gumen s on powe in he e odox economics a icula e speci ic cases ha
esemble his o e all pa e n. An example is gi en by Ma x’s amewo k, whe e wo k-
e s a e o ced o sell hei labo powe because hey lack owne ship o he means o
p oduc ion, which, in u n, cons i u e he cen al sou ce o he powe o capi al. To
b ing his example in line wi h ou echnical e minology, he means o powe a e
cons i u ed by p i a e p ope y, and hence, wo ke s ind hemsel es wi hou a iable
ese a ion op ionas heylack suchp ope y.Theunde lying “social ela ion” be ween
labo and capi al hus cons i u es a long- e m asymme ic powe ela ion (see Ma x
and Engels (1983), pp. 822-839). A simila easoning can be employed o co e o he
classic concep ions o powe and/o powe asymme ies in he e odox economics, like
he gende ed powe asymme y associa ed wi h con en ional o ms o social ep oduc-
ion (see, e.g., Bha acha ya (2017)), powe asymme ies in in e na ional ade due o
dis inc echnological capabili ies (Saps o d e al. 1992; Ocampo 2022), o he powe
asymme y associa ed wi h p i a e monopolies in ma ke s o basic goods wi h a low
elas ici y o demand, like ood, wa e , o elec ici y (Collec i e 2018).
When analyzing powe ela ions, i seems a help ul i s s ep o speci y bo h he
in ol ed ac o s and he wo ca ego ies o means and ese a ion op ions as p ecisely
as possible. Such an applica ion is mos s aigh o wa d when analyzing dyadic and
di ec powe ela ionships. In he nex sec ion, we will discuss how he classical powe
o mulacanbe expanded o adap ed o alsocap u e mo ecomplex powe ela ionships.
3.2 The classical powe o mula as a heu is ic o si ua ions wi h many ac o s
and indi ec powe ela ions
While he classical powe o mula p o ides a sui able de ini ion o powe and an
ini ialdesc ip ion o speci ic(especiallydi ec )powe cons ella ions,i s scope emains
es ic ed in a leas wo dimensions. Fi s , i is deba able whe he and o wha ex en
i can be used o desc ibe indi ec powe ela ions. Second, he powe o mula has i s
ocus on speci ic social ela ionships ha in ol e wo ac o s, A and B. In o de o apply
he o mula o ne wo ks o social s uc u es (which will o en seem necessa y i one
wishes o s udy co po a e powe ), i equi es modi ica ion. In o he wo ds, he classical
powe o mula p ima ily se es as a i s an age poin ha needs o be ope a ionalized
wi h ca e ul conside a ion o he speci ics o he si ua ion unde s udy. Ye , wi h i s
ocus on means and ese a ion op ions, i p o ides a gene al amewo k ha can in
p inciple be applied o a ious social con ex s.
This amewo k can be employed o de i e case-speci ic a ia ions o he classical
powe o mula. An example is p o ided by he economic analysis o compe i i e si -
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Co po a e powe and global alue chains...
o e , he laye ed on ology o Bunge’s sys emism wi h i s ocus on in e ela ed sys ems
and subsys ems allows o hink abou hese phenomena in an in eg a ed manne and
ocus p agma ically on di e en le els o analysis wi hou losing ack o he bigge
pic u e.
Agains his backd op, Table 2p o ides an ini ial o e iew o he di e si y o
co po a e powe by lis ing some key examples o how o concep ualize co po a e
powe wi hin hese mo e speci ic con ex s.
5.1 The dyadic le el: powe ela ions be ween indi idual ac o s
In an examina ion o co po a e powe on he dyadic le el, he ocus is p ima ily on he
(powe ) ela ionship be ween wo connec ed ac o s. These ac o s a e no p ede ined:
hey can be co po a ions o o he i ms, di e en depa men s o he same i m, o a
i m and ano he s akeholde .
Powe aspec s in dyadic ela ionships be ween wo co po a ions can ake a ious
o ms, wi h esul ing powe dynamics usually being nei he pu ely unidi ec ional no
con ex -independen .Fo his eason, exis ing ypologies andanalyseso dyadicpowe
ela ions p ima ily a emp o cap u e di e en in ensi ies and easons o obse ed
powe asymme ies (see, e.g., Kim 2000; Nyaga e al. 2013; Kahkonen and Lin-
ukangas 2014; Magla as e al. 2015, o some con ibu ions in he ield o business
managemen ). A ypical example o a di ec powe ela ion a he dyadic le el is
Table 2 Analy ical le els o co po a e powe . This able summa izes di e en analy ical le els ha migh
p o ide a sui able s a ing poin o he s udy o co po a e powe
Analy ical le el Focus Examples o di ec
powe ela ions
Examples o indi ec
powe ela ions
Dyadic le el Rela ionship be ween indi id-
ual ac o s (e.g., i ms and
s akeholde s
Ba gainingand nego i-
a ing powe , bo h up-
and downwa ds
Agenda-se ing, man-
agemen o expec a-
ions
Ne wo k le el Speci ic supply chains and/o
i ms
Ga e keeping, cen al
posi ions wi hin he
ne wo k
owne ship o cen-
al echnologies and
adema k igh s
Indus y le el Indus ies and sec o s Codi ica ion o bes
p ac ices,monopoliza-
ion
Se ing o in o mal
s anda ds, b anding
and e-b anding o
p oduc s, agenda-
se ing
Na ional le el In e ac ion be ween globally
ope a ing co po a ions and
na ion s a es
In es o powe , a bi-
a ion ibunals, spe-
cial ax ag eemen s,
lobbying
h ea o exi , indi-
idualized s anda ds
in special economic
zones
Global le el Global phenomena o concen-
a ion and dis ibu ion
Weal h and po e y
chains, co po a e con-
ol ne wo ks, ace o
he bes loca ion
Con es a ion o local
s anda ds and egula-
ions, co po a e ech-
nology as a signi ie o
p og ess
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J.Kapelle e al.
he dependence o a co po a ion on ew po en ial buye s and/o supplie s, which can
also be desc ibed as an absence o p o i able second-bes op ions in buying o selling
(see Sec .3). On he o he hand, an indi ec powe ela ion a he dyadic le el may
a ise om a company’s echnological leade ship o i s abili y o exe p essu e on i s
espec i e coun e pa in public discou se. Such dyadic analysis is especially use ul
o unde s anding how a lead i m execu es go e nance o e i s global p oduc ion
ne wo k is-a- is single pa ne s.
An illus a i e example o such a case o a di ec powe ela ion on he dyadic
le el is gi en by he ela ionship be ween Apple and Foxconn. In his case, Apple is
a co po a ion ha p o ides a speci ic echnology and he associa ed p oduc design,
and Foxconn is a key pa ne in manu ac u ing hese p oduc s. Al hough Apple is
undoub edly he mo e powe ul ac o in his dyad due o i s in ellec ual p ope y
igh s and i s p o ision o necessa y ope a ing sys ems, Foxconn also possesses some
coun e ailing powe due o i s cen al posi ion in he alue chain o Apple p oduc s.
Hence, his is an example o how a his o ically unidi ec ional powe ela ion has
e ol ed in o a mo e balanced se up as mu ual dependencies be ween bo h i ms ha e
de eloped o e ime, which mainly a ec ed Apple’s exi op ions as he la e become
mo e cos ly in he ace o inc easing specializa ion a Foxconn (Dicken 2015, pp.156–
159).
When analyzing co po a e powe , a dyadic pe spec i e is pa icula ly in e es ing
when he ocus is on he ela i e posi ion o wo signi ican ac o s. An analy ical
ad an age o such an app oach is ha he ele an ac o s and ela ionships can be
clea ly iden i ied and named, allowing he applica ion o he classical powe o mula
o be ealized di ec ly.
5.2 The ne wo k le el: powe ela ions wi hin a supply chain
In a ne wo k-o ien ed analysis o co po a e powe , he ocus is on a speci ic segmen
o he en i e ne wo k o GVCs. This segmen is ypically de e mined by he spec um
o a lead i m’s co po a e ac i i y which can be delimi ed by owne ship s uc u es
and/o s able con ac ual ela ionships (“con ac ual ecosys ems” acco ding o Ruggie
(2017), see also Fig.1).
In his con ex , a ious o ms o exe cising powe in ne wo ks can be dis inguished.
In his seminal con ibu ion, Ge e i (1996) di e en ia es be ween “buye -d i en”
and “p oduce -d i en” supply chains. Dominan co po a ions in buye -d i en sup-
ply chains can be cha ac e ized by hei abili y o access many decen alized supplie s
o simila goods and a global dis ibu ion ne wo k. Thei powe hus a ises om hei
c i ical posi ion in he ac o ne wo k ha allows hem o combine he ad an ages o
an oligopolis ic s uc u e in dis ibu ion wi h hose o oligopsonis ic ela ionships in
p ocu emen . Analogous o he classical powe o mula in oduced in Sec .3,powe in
bo h dis ibu ion and p ocu emen a ises om he educed ese a ion op ions o he
espec i e ading pa ne s. Co po a ions like S a bucks o Chiqui a ( o me ly: Uni ed
F ui Company) and, mo e gene ally, supe ma ke chains a e ypical examples o such
con igu a ions on a global scale. In all hese cases, hese co po a ions a e cen al dis-
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Co po a e powe and global alue chains...
ibu o s and hey hold a dominan ole in a ne wo k o decen alized supplie s ha
can be easily subs i u ed.
In “p oduce -d i en” supply chains, on he o he hand, echnological aspec s (and,
by implica ion, legal aspec s) a e mo e impo an . Typically, a undamen al echni-
cal design is de eloped by co po a e headqua e s which a e usually loca ed in he
global No h, while he p oduc ion and assembly o indi idual p oduc componen s
a e ou sou ced o low-wage coun ies. He e, he powe o he cen al co po a ion a ises
om i s in ellec ual p ope y igh s o echnologies and speci ic p oduc b ands ha
a e capable o gene a ing high e u ns, hus making pa icipa ion in he espec i e
alue chain a ac i e. Nume ous examples o such p ac ices can be ound in mos
echnology-in ensi e indus ies (e.g., in compu e and consume elec onics, he ICT
sec o , pha macology, o ag ochemis y Elsne e al. 2015). While co po a e headqua -
e s loca ed in he global No h o en manage o e ain hei dominan posi ion his
way, i should be no ed ha his dominan posi ion can be con es ed by supplie s in
case o a co-dependency (as illus a ed by he Apple-Foxconn case discussed abo e).
Also, he eme gence o companies a he wo ld echnology on ie in middle-income
coun ies can lead o a con es a ion o es ablished powe asymme ies in he con ex
o leade ship by echnological s anda ds.
Hence, bo h a ian s o supply chain go e nance ou lined he e exe cise powe on
he ne wo k le el by employing he p inciple o ou sou cing and he associa ed goal
o cos minimiza ion along he p oduc ion chain ha MNCs ollow. The localized
na u e o indi idual p oduc ion and dis ibu ion si es— ha con as s wi h he lexibil-
i y o ansna ional in es men decisions—gi es ise o a s uc u al powe asymme y
be ween co po a e headqua e s and decen alized loca ions, na ional wo k o ces, and
o he locally es ic ed s akeholde s (Ruggie 2017). A classic “buye -d i en” example
o a s a egy s ic ly ocused on ou sou cing is p o ided by he Nike co po a ion as i s
p oduc ion ne wo k consis s o a se ies o geog aphically sepa a ed p oduc ion si es
ha can easily be placed in compe i ion wi h one ano he . In such a se up, ese a-
ion op ions o ela ed i ms a e successi ely diminished, while he mul ina ional i m
s ill p o i s om a ac i e ou side op ions (Me k 2015). This cons ella ion con as s
wi h he case o “p oduce -d i en” supply chains, whe e specializa ion equi es mo e
long- e m commi men s wi h ou sou cing pa ne s, which s eng hens he ole o in el-
lec ual p ope y igh s o di ec ly exe powe on p oducing en i ies (e.g., by p o iding
essen ial equipmen o in e media e pa s) o consume s (e.g., by collec ing ees o
usage).
This classical dis inc ion be ween “buye -d i en” and “p oduce -d i en” GVCs is
some imes said o e lec a endency o ake GVCs as a gi en and o ha e a ocus
on s udying which ne wo k dynamics his gi en se up b ings o h. In con as , a
global p oduc ion ne wo k pe spec i e would emphasize mo e s ongly ha lead i ms
ac i elyshapeandimpac he unde lyingne wo kand employa di e sese o s a egies
o do so Yeung and Coe (2015).
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J.Kapelle e al.
5.3 The indus y le el: powe ela ions wi hin sec o s
The sec o al o indus y-speci ic analysis o co po a e powe ypically exhibi s a ocus
on ques ions abou he ex en o economies o scale, ma ke size, and he in ensi y o
compe i ion. This ocus is due o he close associa ion be ween sec o s and speci ic
(g oups o ela ed) p oduc s and allows o an analysis by means o con en ional
indices o concen a ion (like he Hi schman-He indhal index). The ela i e me i
o such an app oach d aws om he ocus on a gi en inal o in e media e p oduc ,
which allows o highligh ing powe asymme ies wi hin a well-delimi ed subsys em
o he economy. Such powe asymme ies a e ypically de ined in e ms o ma ke
concen a ionand ela e o hecos s uc u esinp oduc ion,whe einc easing e u ns o
scale a e especially conduci e o endogenous endencies o concen a ion (Robinson
1962; Shaikh 2016),.
In gene al, inc easing economies o scale—i.e., inc easing e u ns pe uni wi h
addi ional p oduc ion ou pu —a e ypically pa o a la ge company’s compe i i e
ad an age, as la ge co po a ions can p oduce a lowe cos s in he limi . When p oduc-
ion in ol es inc easing economies o scale, i is pa icula ly a ac i e o concen a e
he p oduc ion in as ew loca ions as possible. The co esponding ma ke s a e hus
o en cha ac e ized by s ong concen a ion endencies, a he end o which a ew
supplie s ace each o he in a global oligopoly (Selwyn 2014;Dicken2015, Chap e
15). The esul ing p ocess o powe concen a ion is u he exace ba ed by ad ancing
globaliza ion. Since he la e can be unde s ood as a p ocess o successi e expansion
o he ma ke size and he p oduc ion olume o co po a ions is p edominan ly limi ed
by he size o he po en ial sales ma ke , globaliza ion o en p omo es an e en s onge
oligopoliza ion o ma ke s ha a e cha ac e ized by inc easing economies o scale.
This se up c ea es a scena io, whe e a ew oligopolis s y o cap u e ma ke sha es as
la ge as possible, which makes he decision on cu en p ices subjec o conside a ions
on u u e ma ke dominance (Ro hschild 1947; Shaikh 2016, Chap e 7).
In addi ion o he complexi ies su ounding he monopoly and oligopoly en s
men ioned he e—which a y in in ensi y depending on he indus y— he o mal
and in o mal implemen a ion o p oduc - ela ed s anda ds is also a cen al sou ce
o co po a e powe a he indus y le el. In such cases, indi idual g oups succeed—
h ough ag eemen s wi h o he i ms, consume amilia iza ion, e icien ma ke ing, o
he in luencing o egula o y p inciples—in in oducing o mal o in o mal p oduc -
ela ed s anda ds o consolida ing expec a ions, which in some cases become a sou ce
o new compe i i e ad an ages.
While a ocus on he indus y le el pa ially o e laps wi h he ne wo k pe spec i e
discussed in he p eceding sec ion, hese wo pe spec i es o en complemen each
o he in p ac ice: While a ne wo k pe spec i e examines he dynamics eme ging om
a gi en se up o a GVC and/o he s a egies employed by MNCs o go e n (segmen s
o ) GVCs by means o a global p oduc ion ne wo k—i.e., he modes o go e nance
on he meso-le el—a ocus on indus ies and sec o s spo ligh s he mac oeconomic o
sys emic ou comes ha esul om he inne dynamics o he associa ed sys em. As
such, heanaly ical ca ego iesassocia ed wi h hisle el o analysisa e mo econduci e
o adi ional economic unde s andings o ma ke powe and allow o b idging he
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Co po a e powe and global alue chains...
analysis o a sys em’s inne dynamics wi h i s agg ega e ou comes—o , he in e ac ion
mechanisms be ween sub- and supe -sys ems loca ed on di e en on ological le els,
o use he e minology o sys emism. As men ioned be o e, ma ke powe can be
conside ed a special case o he gene al de ini ion o powe as laid ou in Sec .3.
5.4 The na ional le el: na ional in luence and in e na ional ace o he bes
loca ion
The di ec and indi ec exe cise o powe by co po a ions a he na ional le el—
h ough lobbying, h ea s o eloca ion, o o ganized public ela ions—is a classic
opic in esea ch on co po a e powe (see, e.g., O eskes and Conway 2011; Kim and
Milne 2019). In addi ion, new modes o powe exe ion eme ge a he in e na ional
le el, such as h ough sup ana ional a bi a ion cou s o h ough he in ensi ica ion
o global loca ion compe i ion, which mani es s i sel h ough a o able oppo uni ies
o egula o y a bi age, special axa ion ag eemen s, o special economic zones. In he
absence o e ec i e coope a ion among s a es, an inc ease in he mobili y o capi al
is accompanied by a signi ican inc ease in powe by co po a ions is-a- is s a es as
well as o he domes ic s akeholde s (Ro hschild 2005).
Howe e , his poli ical aspec o globaliza ion and he associa ed ise o MNCs does
no con ey an exhaus i e unde s anding o co po a e powe on he domes ic le el as i
also a ec s domes ic economic de elopmen by means o decisions on in es men and
inancing. While he poli ical economy iew men ioned abo e ocuses on he powe
associa edwi h a h ea o exi employed byMNCs,lookingmo edi ec ly on hena u e
and in en ion o in es men s and associa ed (in e na ional) inancial lows e eals ha
suchin es men isno necessa ily obeconcei edsolelyin e mso hei possiblecom-
pa a i e ad an age. Ra he , he impac o in es men on oppo uni ies o p oduc ion
and de elopmen also ma e s (as indica ed by, e.g., I ogbe 2013; Na ula and Gui-
mon 2010; Na ula 2018): i in es men by mul ina ionals mainly ollows es ablished
compa a i e ad an ages, ex ac i e economies will con inue o see mo e ex ac i e
in es men , high- ech manu ac u ing economies will con inue o wi ness mo e R&D-
spending, and he wo ld’s inancial cen e s will con inue o agglome a e mo e and
mo e (local) headqua e s o in e na ional inancial, eal es a e, and ech co po a ions.
In o he wo ds, in es men ac i i ies impac domes ic de elopmen al ajec o ies and
o en ein o ce exis ing o c ea e new pa h dependencies ha con ibu e o a p olonged
di ision be ween co e and pe iphe y coun ies, which s ill la gely ollows bounda ies
i s es ablished in he colonial pa e ns o he comme cial age (on his, see also Alami
e al. 2023).
Hence, MNCs exe powe on he economic de elopmen o na ions, he eby o en
ein o cing endencies, whe e“success c ea essuccessand ailu e bege smo e ailu e”
(Kaldo 1980). And indeed, a mo e de ailed analysis o such pa h dependencies in
Eu ope on a na ional (G abne e al. 2020) o egional le el (Rod íguez-Pose 2018)
no only p o ides e idence o inc easing economic specializa ion (and associa ed
pola iza ion) ac oss coun ies and egions, bu also indica es ha in many a eas, a lack
o in es men does indeed lead o a s agna ing o de e io a ing economic de elopmen
(see, e.g., Essle zbichle e al. 2023).
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J.Kapelle e al.
Typically, he ques ion o how in es men decisions ha e he powe o shape domes-
ic de elopmen al ajec o ies is closely ela ed o conside a ions o e he dis ibu ion
o su plus. Ul ima ely, decisions on in es men s a e decisions on which p oduc i e
capaci ies a domes ic economy shall ha e and how o u he de elop ce ain aspec s
o socio-economic p o isioning. These decisions a e in luenced by a ious economic
in e es s, and wi h in es men powe in he hands o MNCs, he local populace can
o en only hope ha hei in e es s align wi h hose o a MNC ha se s ou o shape
hei local en i onmen . Finally, he no ion o su plus d aws a en ion o he ela ed
dis ibu ional aspec s. One such aspec conce ns he na u e o p icing, as inspi ed
by he classic Singe -P ebisch hypo hesis (P ebisch 1950; Singe 1950), whe e he
ques ion a ises, whe he he p ices se by MNCs uly (o ai ly) e lec he con ibu-
ions o indi idual coun ies. This opic has gained inc easing p ominence in ecen
decades as p o i -shi ing o he sake o minimizing co po a e ax bu dens has become
commonplace among MNCs (Ga cia-Be na do e al. 2021). Ano he aspec conce ns
he sel - ein o cing na u e o o eign di ec in es men : i success ul, o eign di ec
in es men will di ec a pa o a coun y’s p o i income o o eign ecipien s, which
in u n can inance mo e such ( o eign) in es men s, he eby inc easing hei scope o
con ol and, he eby, hei impac on domes ic de elopmen al ajec o ies. This sel -
ein o cing spi al can eap a coun y o p o i income, which is commonly unde s ood
as a key elemen o unde aking new p i a e o public en e p ises.
All his also highligh s he possible a ini ies be ween he s udy o co po a e
powe , and he e odox and plu alis app oaches o inancializa ion and inancial
subo dina ion (Alami e al. 2023, e.g.), he ole o s uc u al cons ain s and de elop-
men (K ang a en 2020, e.g.), bu also mo e b oade mo emen s such as deg ow h
(G äbne -Radkowi sch and S unk 2023, e.g.), and a pos colonial e hinking o mo e
es ablished heo ies o p og ess and de elopmen (see, e.g., Go 2016).
5.5 The global le el: egula o y aces, egional specializa ion, and ha ens
o e e y hing
On he in e na ional le el, we obse e he ole o MNCs as global a bi ageu s, exploi -
ing geog aphical and ins i u ional di e ences be ween loca ions. This places inhe en
compe i i e p essu e on na ional policies o o e a ac i e condi ions o in e na ional
in es o s and co po a ions. The consequence o his is an asymme ic powe posi ion
be ween co po a ions and poli ics, d i en by a compe i ion among indi idual na ion-
s a es. This o m o compe i ion aligns well wi h he o mula desc ibed in Sec .3.2,
s a ing ha en i y A has powe o e a se o ac o s B when B compe es o ul illing
he needs o A.
In he globalized economy, alue chains a e o en highly agmen ed geog aphi-
cally: his allows MNCs o concen a e unc ions and ac i i ies in hose loca ions ha
ha e— om hei pe spec i e—a compa a i e ins i u ional ad an age in he ele an
ac i i y. S a es, in u n, endea o o a ac in e na ional co po a ions as employe s
and axpaye s by o e ing be e condi ions (such as lowe p oduc ion cos s, axes, o
le ies) han o he s a es (G abne e al. 2020;Colee al.2014; Palan 2020; Tø slø
e al. 2023, e.g.). This no only inc eases he nego ia ing powe o co po a ions agains
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Co po a e powe and global alue chains...
s a es bu also agains o he locally bound in e es g oups, such as unions o en i on-
men al p o ec ion o ganiza ions. The li e a u e discusses his ace o he bes loca ion
wi hin he amewo ks o “compe i i e bidding” (Dicken 2015), “comme cializing
so e eign y” (Palan 2002), o he “globaliza ion ilemma” (Rod ik 2011). Acco d-
ing o Rod ik, s a es a e aced wi h he dilemma ha o he h ee a ge dimensions o
“comple e globaliza ion,” “na ional so e eign y,” and “democ a ic legi ima ion o pol-
icy measu es,” only a maximum o wo can be achie ed simul aneously. This implies
ha uncon olled “hype ” globaliza ion can lead o a si ua ion in which policy mea-
su es ha a e undamen ally suppo ed by he elec o a e can no longe be implemen ed
a na ional le el in he ace o in e na ional compe i i e p essu e. Ins ead, s a es a e
o ced o comme cialize hei so e eign y in a p ocess o compe i i e bidding o hand
i o e o sup ana ional ins i u ions.
This dynamic opens up an impo an channel o global unequal de elopmen as
coun ies in he Global No h end o ha e ad an ages in social and poli ical s abili y,
a well-educa ed popula ion, ad anced in as uc u e, and s ong legal ce ain y, while
coun iesin he GlobalSou ho en elyon ad an ages suchascheap labo ,inexpensi e
esou ces, o low egula o y equi emen s in a eas such as axes, he en i onmen ,
and human igh s. E en wi hin he Global No h, nume ous coun ies seek o a ac
co po a ionswi has a egic axpolicy,as illus a edby heg ow hmodelso Eu opean
s a es like he Ne he lands, I eland, Swi ze land, Luxembou g, o Mal a (G abne e al.
2020; Palan 2020). These ci cums ances lead o an inhe en end o specializa ion,
u he s eng hened by co po a ions de e mining whe e and o wha pu pose he
e u ns gene a ed h ough ou sou cing and o sho ing a e ein es ed.
Examples o such specializa ion ends include Sou h Ame ica, inc easingly depen-
den on esou ce ex ac ion, Sou heas Asia, combining cheap labo wi h low labo
s anda ds and mode a e educa ion le els, and nume ous smalle economies such as
Mal a, he Cayman Islands, o Swi ze land, e ol ing in o ax ha ens in he global
compe i ion. These condi ions, as desc ibed abo e, con ibu e o an inhe en end
o specializa ion, u he in ensi ied by co po a ions de e mining whe e and o wha
pu pose he e u ns gene a ed h ough ou sou cing and o sho ing a e ein es ed. The
ques ion as o which ime hese specializa ion pa e ns a e o be aced back and when
hey can be b oken is c ucial. Fo example, pos colonial schola s such as Hickel e al.
(2021) equen ly a gue ha one impo an endu ing e ec o colonialism e e s o he
kind o “ icious specializa ion” in e ms o economic ac i i ies ha has been ini ia ed
in he imes when MNCs such as he Eas India Companies (see Sec .1) s a ed o
make p o i s a he expense o land and labo in he Global Sou h.
6 Conclusion: inc easing economic pola iza ion as a global
consequence o co po a e powe
While no a new phenomenon his o ically, MNCs ha e gained immense signi icance
in he globalized wo ld economy o he wen y- i s cen u y. The e o e, he analysis o
co po a e powe wi hin GVC plays a decisi e ole. A ela ional o ne wo k- heo e ical
pe spec i e, concei ing co po a ions as “ne wo ks wi hin ne wo ks,” along wi h he
powe o mula desc ibed in his a icle, can assis in analyzing co po a e powe on a -
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J.Kapelle e al.
ious le els, he eby ex ending classical he e odox analysis o he business en e p ise
(as, e.g., Veblen (2022); see on his also Jo (2021)), which o igina ed in an ins i u ional
amewo k ha di e s om oday’s hype globalized economy. I becomes e iden ha
such an examina ion o co po a e powe con ibu es no only o a be e unde s anding
o he ela ionships be ween indi idual i ms wi hin a alue chain o he con lic s o
in e es be ween co po a ions and o he s akeholde s, such as unions, bu also high-
ligh s he consequences o in e na ional compe i ion be ween s a es and co po a ions
and he socio-economic challenges ha accompany i .
Do GVC con ibu e o he ep oduc ion o educ ion o global inequali ies, and
wha ole do in e na ional co po a ions play in his? While a classic in e p e a ion
sees global supply chains as an oppo uni y o poo e egions o ise h ough echno-
logical upg ading wi hin he supply chains and hus educe in e na ional inequali ies
(see below), cu en esea ch inc easingly a gues ha he dominance o MNCs in hese
alue chains con ibu es o an inc ease in inequali y a bo h he global and he na ional
le el. This has wo easons: Fi s , global powe asymme ies be ween na ional poli-
ics and MNCs, pa icula ly he endency owa ds ou sou cing o low-wage coun ies,
lead o a g adual edis ibu ion om wages o p o i s, o mo e p ecisely, om labo
o capi al. This esul s in an inc ease in unc ional income inequali y, a connec ion
ex ensi ely documen ed empi ically o leading indus ialized na ions (Milbe g and
Winkle 2013). Second, globally ac i e (co po a e) eli es ha e de eloped s a egies—
e.g., osecu e cen al adema k igh s o heuse o axa oidance op ions(e.g., ans e
p icing, see abo e)— ha allow hem o skim o a ela i ely la ge p opo ion o he
p o i s gene a ed along he en i e alue chain (see, e.g., Ga cia-Be na do e al. 2021).
In e ec , he eme gence o GVC a he le el o p oduc ion goes hand in hand wi h
he eme gence o global “weal h and po e y chains” (Seab ooke and Wigan 2014;
Selwyn e al. 2019) a he le el o dis ibu ion. In p ac ice, “weal h chains” a e o en
based on ins i u ions o he global shadow banking sec o (some imes also e e ed
o as he “o sho e economy”) and e lec he owne ship and powe ela ions behind
GVC. In his sense, “weal h chains” a e he cen al ins umen ha makes he con-
cen a ion o p o i income on a global eli e o sha eholde s and co po a e manage s
possible in he i s place. “Po e y chains,” on he o he hand, a e o be unde s ood in
a complemen a y way: as he lowe le els o he global alue chain a e dep i ed o a
la ge p opo ion o he alue gene a ed h ough asymme ical powe ela ions, u he
de elopmen oppo uni ies emain ma ginal.
“We sugges ha weal h chains a e he yin o he yang o alue chains.”
(Seab ooke and Wigan 2014,257)
This a he c i ical pe spec i e is o en con as ed wi h a posi i e ision o upg ad-
ing, which seems po en ially possible h ough he es ablishmen o GVC. In con as
o he “po e y chains” hesis, exis ing inequali ies a e educed by co po a ions ini-
ially placing hemsel es a lowe le els o a alue chain, bu hen bene i ing om
knowledge spillo e s wi hin he chain and hus upg ading hemsel es. Value chains
hus become an impo an channel o he ans e o p oduc i e knowledge om he
Global No h o he Global Sou h. Such p ocesses a e ce ainly no o be unde es i-
ma ed (e.g., Ge e i 2018). A he same ime, upg ading is no a uni e sal phenomenon
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Co po a e powe and global alue chains...
ei he , as co po a ions o en use hei powe wi hin he alue chain o a oid an upg ad-
ing o o he co po a ions and hus a oid compe i ion in he mos p o i able a eas o
he alue chain, meaning ha upg ading s a egies o en emain unsuccess ul (e.g.,
McMillan e al. 2014). In his espec , he only conclusion ha can be d awn he e is
ha global supply chains play an ambi alen ole in global inequali y: while hey do
indeed ha e he po en ial o achie e a signi ican s uc u al educ ion in in e na ional
inequali ies, his po en ial is no being exploi ed, o en due o esis ance om powe -
ul MNCs (Milbe g and Winkle 2013).7This is one a ea whe e u u e esea ch could
bo h bene i om and ad ance an app oach ha iangula es (he e odox) economic
s udies o GVC, wi h a pos colonial app oach based on subal e n s andpoin heo y
(Go 2016). In such an app oach, he ques ion abou he po en ials and challenges o
global p oduc ion chains would be ackled i s and o emos om he pe spec i e o
he leas powe ul ac o s in ol ed in he o e all alue chain.
A inal ques ion wi h ega d o he ole o co po a e powe in he wen y- i s cen-
u y a ises on a global le el. How is co po a e powe i sel dis ibu ed? Is he weal h
o powe associa ed wi h MNCs dis ibu ed among many ac o s o concen a ed in
a ew hands? How can he global dis ibu ion o co po a e powe be ope a ionalized
in an empi ically meaning ul way? Wha pic u e does an in es iga ion o agg ega ed
co po a e powe lead o? One possible app oach is o unde s and co po a e powe as
con ol o e co po a e s a egy and o measu e i empi ically ia owne ship sha es
in co po a ions. This allows us o answe he ques ion o whe he con ol igh s a e
equally concen a ed in he en i e co po a e economy. On he basis o such a pe spec-
i e, Vi ali e al. (2011) iden i y a co e o 737 co po a ions, which consis s o a la ge
ex en o co po a ions om he inancial sec o and exe cises a ound 80% o co po-
a e con ol igh s. This esul illus a es no only he concen a ion o co po a e powe
bu also he analy ical ad an age o a ne wo k heo y pe spec i e on global co po a e
s uc u es.
Funding Open access unding p o ided by Johannes Keple Uni e si y Linz. CG acknowledges unding
by he Aus ian Science Fund (FWF) unde g an numbe ZK 60-G27.
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7When i comes o he acili a ion o upg ading h ough GVC, s a es can—despi e he abo e-men ioned
obs acles— acili a e upg ading by implemen ing adequa e policies (see, e.g., De Ma chi and Al o d 2022,
o a e iew).
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