Article Preview
TopIntroduction
Global value chains (GVCs) reorganize production across borders by allocating tasks and coordinating knowledge creation through networks that link firms and places in structured ways, which reshapes industrial development and the geography of value capture as shown in foundational accounts of value chain governance and global production networks by Gereffi et al. (2005) and by Yeung and Coe (2015). Participation can transmit technology and sophisticated inputs that deepen specialization, yet governance asymmetries can also consolidate power in lead firms and reproduce dependence, which the literatures on power, social upgrading, and private regulation have documented across sectors and regions through comparative evidence and case studies that link firm strategy to institutional context (Barrientos et al., 2011; Bloomfield & Manchanda, 2024; Dallas et al., 2019). Recent assessments of the international investment landscape indicate that firms and states have been diversifying suppliers and redesigning processes in pursuit of resilience rather than simply expanding volumes, thereby altering how capability formation should be interpreted in the current period (Zhan, 2021).
Evidence from long-view analyses shows that deeper participation often aligns with higher productivity and with movement into more complex exports. Nevertheless, results vary across settings, and the institutional and organizational conditions that convert exposure into durable capability remain insufficiently specified in many cases, motivating closer attention to mechanisms and context in firm-level studies (Johnson, 2018; Pahl & Timmer, 2020). Theories of absorptive capacity argue that the internal stock of related knowledge enables firms to recognize, assimilate, and apply ideas from partners and suppliers, which implies that participation will translate into innovation only when firms invest in search and learning routines that convert external signals into practice inside the plant or office (Cohen & Levinthal, 1990; Lehmann et al., 2022). This study engages with that problem by testing whether within-firm movements in upgrading, research and development (R&D) effort, and domestic value capture align with mechanism-based expectations rather than merely correlating with integration at the aggregate level.
China, Vietnam, and India provide a demanding comparative frame because they differ strongly in size, industrial structure, technological capability, and institutional configuration, which allows a diverse case design to probe whether a common process recurs under contrasting background conditions as recommended in comparative methodology for most different system designs (Mills et al., 2009; Seawright & Gerring, 2008). China has moved from low-cost assembly toward a base that integrates R&D with advanced manufacturing, while facing rising wages and demographic headwinds, suggesting that process discipline and design capability now anchor participation in higher-value segments of production (Huang, 2022; Lu et al., 2024). Vietnam entered the global economy through institutional reforms and cost advantages that attracted foreign direct investment and enabled local firms to join cross-border networks. However, reliance on imported intermediates continues to shape the pace of functional upgrading at home, making supplier development pivotal for deepening capabilities (De Oliveira et al., 2021; Kubny & Voss, 2014). India specializes in knowledge-intensive services that rely on human capital and the English language. At the same time, infrastructure constraints have slowed large-scale manufacturing, suggesting that upgrading proceeds more through services and systems integration than through broad-based industrial-scale-up in physical goods during the period under study (Hariharan & Biswas, 2021; Ray et al., 2023).