Cloth without a Weaver: Power, Emergence and Institutions across Global Value Chains

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In studies of the fragmentation and internationalization of production, most value chain approaches consider the inter-firm balance of power as the critical dynamic in development. With the firm as the primary unit of analysis, research long held out two promises: first, bridging the 'micro-macro gap' in development theory, meaning making valid inferences from micro-level actors (firms) to macro-sociological outcomes; and second, reconciling its firm-level organizational approach with institutionalism. This paper argues, first, that the literature is artificially constrained in bridging the micro-macro gap due to its delimited conceptualization of 'power,' based on the 'agentic-strategic' behavior of firms. It argues for broadening the notion of power to bridge the levels of analysis, based on the concept of 'emergence.' Second, while institutional critics are correct in criticizing value chain scholarship for its neglect, this paper finds that the effects of institutions are not as consistent or determinative as suggested, and hence, it seeks to expand the scope for incorporating institutionalism. These points are illustrated through an intra-industry comparative study of three textile agro-industries in China.