Subordinate firms’ strategies in global value chains: The case of farmers investing in biogas production

This article analyses subordinate firms’ upgrading strategies by focusing on the firms themselves rather than using the classical approach of global value chains (GVC). This approach develops the concept of “strategic upgrading” to study the institutional environment of subordinate firms and to mobilise concepts from industrial organisation framework such as differentiation, diversification and specialisation to understand these firms’ strategies. It re-examines the category of inter-chain upgrading—i.e., the improvement of actors’ positions by moving to a new GVC—in a territorialised case study on biogas production development by Ardennes farmers. We observe that these farmers are part of the emerging GVC of biomass energy based on their experience as “captive” actors in the agroindustrial GVC. In particular, they have sized their biogas production units to be autonomous vis-a-vis agribusiness. This new activity also has feedback effects on their positioning in the agroindustrial GVC.JEL Codes: L22, L23, Q13, Q16 et Q42.