Rethinking the dynamic of global production networks: Integrate the influence of suppliers and towards a flexible strategy making causal mechanism

Abstract

The global production network (GPN) 2.0 framework mainly considers the organizational capabilities of lead firms, neglecting the influence of supplier capabilities on the strategic making of lead firms. I argue that the GPN 2.0 framework must integrate the influence of supplier capabilities (both industrial and individual firm levels) to better explain the organization of the global economy. Industrial-level capability determines the possible strategic choices that firms may make under certain dynamic combinations, whereas the individual firm level determines the geographic extension direction of GPNs. Therefore, this study incorporates the influence of suppliers and builds a more flexible strategy-making causal mechanism other than the definitive and limiting causal mechanism in GPN 2.0. I hope this article can promote the further development of GPN 2.0 and convey some valuable concepts to make it perform better in deconstructing the organization of the global economy in the real world.