Local institutions and global value chains

Abstract

Purpose The purpose of this paper is to explore how the shrimp aquaculture export industry in Vietnam can achieve further development in the highly competitive global market particularly in the context of complying with food safety standards set by the markets. Design/methodology/approach This paper applies two conceptual approaches, local institutions and global value chains. The concept of global value chains helps this paper to understand what extent the external pressures are placed on the industry while the concept of local institutions effectively examines its responses to the external pressures. Applying this conceptual framework this paper examines an empirical case analysing secondary data and literature. Findings Market requirements on food safety are brought by global buyers through the global value chains governance structure to the local institutional function. It includes local buyer-supplier relationship within the industrial cluster, industrial policy and business institutions, although it is less likely to address the local backwards suppliers to improve the industrial capability of food safety standard compliance. Research limitations/implications This paper has a research limitation due to the prioritised research scope that critically examines potential pathway for further development of Vietnamese shrimp aquaculture export industry. Therefore, it needs further comparative in-depth analysis with more vertically organised industrial structure performed by the countries such as Thailand. Originality/value The originality of this paper is to critically examine the conceptual limitation of global value chains approach in the context of food safety standard compliance issue, which is likely to be originated in local backward suppliers by applying a complementary concept, local institutions.