CAIRN-INT.INFO : International Edition

Analyses in terms of GVCs generally consider that the sharing of value is more favorable to leading firms than to subordinate firms, which may in turn lead the latter to adopt upgrading strategies with the aim of capturing a larger share of the value. However, by means of a dynamic model, we show that multi-annual supply contracts in the champagne industry, by favoring downstream investments of the leading firms (the houses), make it possible to create a higher value which, if it is partially transferred to the subordinate firms (the growers) via a higher price of grapes, contributes to stabilizing the organization of the industry by limiting the upgrading strategies of the latter. We thus contribute to the developing literature on GVCs and, in particular, to the question of value creation and distribution between leading and subordinate firms.

JEL classification: C61, D86, L14, L66, M37.

  • contracts
  • global value chains (GVCs)
  • champagne industry
  • downstream investments
  • value creation
  • value distribution
  • dynamic models
Hervé Lanotte
Aurélie Ringeval-Deluze
Erick Pruchnicki
This is the latest publication of the author on cairn.
This is the latest publication of the author on cairn.
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