Peter Nolan, Jin Zhang, Chunhang Liu; The global business revolution, the cascade effect, and the challenge for firms from developing countries. Camb J Econ 2007; 32 (1): 29-47. doi: 10.1093/cje/bem016
The global business revolution since the 1980s has witnessed an unprecedented degree of industrial consolidation and concentration of business power at a global level. Firms with powerful, globally recognised technologies and/or brands constitute the ‘systems integrators’ at the apex of extended supply chains. This paper examines the supply chains in four different sectors: aerospace, telecommunications, automobiles and beverages. It finds that these sectors have striking similarities in the way in which the core systems integrators have stimulated industrial concentration across the whole supply chain. This ‘cascade effect’ has profound implications for firms from developing countries in catching up at the firm level.