Managing global value chain triversity and innovation performance using social mechanisms

Abstract

Scholarly interest in global value chain (GVC) has gained momentum in recent years, yet a comprehensive framework that elucidates how GVC affects an important firm‐level outcome—innovation performance (IP)—is so far elusive. To address this gap, we develop a conceptual framework related to three diversities (activity, governance structure, and partner location) that lead firms in GVC utilize in order to enhance IP. We draw upon the GVC and social capital research to develop the framework. We propose that the three diversities (collectively termed as triversity) have the potential to affect lead firms' IP positively as well as negatively. We further propose that mechanisms related to the three dimensions of social capital (relational, cognitive, and structural) help augment the positive effects and mitigate the negative effects of triversity on IP. This article contributes to the understanding of the relationship between GVC triversity, IP, and social mechanism.