Global production networks and cooperation

Chapter 7 addresses the use of cooperative strategies and organizations in the development of global value-adding chains and networks. These global networks comprise not only component manufacture, but also final assembly, marketing, distribution, and even knowledge-based activities such as research and development. These activities are located in many countries and regions, both industrialized and emerging. The chapter notes that transaction cost and resource-based theories and their derivative transaction value perspective offer theoretical support for why cooperative ventures are common in the “outsourcing” that is typical of global production networks. Network concepts help to explain the structuring of global production networks and of the individual transactions that comprise these networks. The chapter also discusses the work of Gereffi and others on global value chains which is particularly informative about cooperative governance types. Modular production models provide a mechanism to structure decentralized networks.