Trends and Shifts in Global Sourcing and Manufacturing Patterns - The changing roles of Chinese and African firms in global value chains

Abstract

Ever since the emergence of the global sourcing and manufacturing phenomenon, numerous firms have expanded their sourcing and manufacturing efforts to low-cost countries to increase their competitive advantage. However, as costs are drastically rising in previously cost-efficient countries, firms in both low-cost and high-cost countries are experiencing continental shifts in global sourcing and manufacturing patterns. On the one hand, firms from developed economies are gradually leaving previously cost-efficient sourcing destinations, such as China, to search for suppliers in alternative low-cost locations, such as the African continent, or reshoring to their home countries. On the other hand, firms from relatively low-cost economies, such as China, are also increasingly starting to source from other destinations, such as the African continent, and offshore their manufacturing activities to high-cost environments.

To facilitate a scientific treatment of the continental shifts in global sourcing and manufacturing, this dissertation focuses on the topic from the perspectives of China and Africa. Specifically, this dissertation investigates the challenges faced by Chinese manufacturing suppliers, and their responses, in supplying to global buyers, and the factors motivating Chinese firms to offshore their manufacturing to high-cost environments. Additionally, this dissertation takes a deeper look into the gaps in extant literature on sourcing from Africa and suggests future research avenues. Finally, yet importantly, this dissertation identifies the roles of African suppliers in global value chains as well as the motives of firms from both developed and developing economies in sourcing from Africa and the common obstacles met.

The overall findings of this dissertation reveal that the roles of Chinese and African firms have changed in global value chains, with China moving up the value ladder and Africa becoming more integrated. The findings also indicate that there are no overarching "etic" theories (i.e. general theories which everyone can transpose and adapt for their specific conditions, as opposed to "emic" theories which are contextual and suitable only for specific situations (Revilla and Sáenz, 2014)) in the purchasing and supply management discipline that can be applied regardless of national and cultural contexts, as it has been found that extant knowledge of theories and frameworks on global sourcing and manufacturing cannot necessarily be applied in the Chinese and African contexts.