Supplier internationalization in the global apparel value chain from Bangladesh to Ethiopia: The buyers business model, institutions and entrepreneurial capability

Current research highlights firms’ internationalization in downstream value chain (i.e. marketing and sales); however, studies have overlooked suppliers’ internationalization into up-stream value chain. Drawing on internationalization and GVC perspectives, we examine a critical case, DBL Apparel Company, from Bangladesh that supplies many global brands, including Sweden’s H&M, and that has internationalized to Ethiopia. As the company appears to be the first case of internationalization by a Bangladeshi garment manufacturer, we conduct an in-depth exploratory examination over a three–year period of the process and the antecedents affecting the firm’s expansion overseas. We reveal that the buyer’s business model, institutional features, and the supplier’s entrepreneurial capability influence the supplier’s internationalization. In particular, our study demonstrates how the buyer’s market-driving approach, value creation, delivery and proposition shape how the buyer shows commitment to the supplier’s internationalization. While supplier’s entrepreneurial capability, consisting of visionary leadership, commitment, learning intent and absorptive capacity, and dynamic management skills, contributes to decision over internationalization. Our analysis reveals it is not a one-sided commitment of internationalizing firm; instead, the ‘shared commitment’ (i.e. of both buyer and supplier) in the GVC that contributes to the supplier’s decision to internationalize. We also demonstrate the influence of institutional characteristics – both home and host, particularly the role of government and the logics of doing business that facilitate the internationalization decision and process. Our study contributes to international business and GVC literature.