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Stuck at the bottom: Role of tacit and explicit knowledge on innovation of developing-country suppliers in global value chains

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  • Islam, Mohammad Tarikul
  • Chadee, Doren

Abstract

We take a social exchange theoretical perspective of innovation to develop and test a model of the intervening role of tacit and explicit knowledge exchange in explaining innovation of developing-country suppliers in non-equity-based global value chains (NEGVCs). Results of structural equation modelling for a sample of Bangladeshi suppliers embedded in apparel NEGVCs show that tacit and explicit knowledge fully mediate the associations between network competence and both low value-added and high value-added innovation contingent on the quality of network relationships. We also found that both tacit and explicit knowledge contribute more to low value-added innovation than to high value-added innovation. The managerial and policy implications of our findings as to why developing-country suppliers in NEGVCs are stuck in low value-added activities are fully discussed.

Suggested Citation

  • Islam, Mohammad Tarikul & Chadee, Doren, 2023. "Stuck at the bottom: Role of tacit and explicit knowledge on innovation of developing-country suppliers in global value chains," International Business Review, Elsevier, vol. 32(2).
    • Handle: RePEc:eee:iburev:v:32:y:2023:i:2:s0969593121001104
    DOI: 10.1016/j.ibusrev.2021.101898
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