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This article examines the role of networks and global value chains (GVCs), and how they influence emerging economy small and medium enterprises’ (EE-SMEs) internationalisation. Drawing on the insights, experiences and perspectives of entrepreneurs and senior managers of SMEs that have originated from China, the study adopts qualitative approach and examines nine firms’ internationalisation. We find that Chinese born-global manufacturing SMEs benefit from networks with quick insidership position into GVCs, but suffer from various obstacles that hinder their further development. The findings further indicate that network ties substantially facilitate EE-SMEs’ internationalisation, but also restrict their future global development, as their low position within the GVCs impedes further business development and capability building. The case firms’ lower position within the GVCs weakens the networks’ influence on their GVC upgrading. The research identifies key enablers of GVCs engagement and obstacles of GVCs upgrading of the case firms which play an important role in the EE-SMEs’ internationalisation.

Purpose: The purpose of this research is to understand how power relations in GVCs shape the upgrading of offshoring service providers. More specifically, the paper addresses two questions 1) How power asymmetry in GVC shapes the upgrading prospects for offshoring service providers (OSP) 2) How offshoring service providers manage the power asymmetry in GVC and upgrade to a more favourable position? Design/Approach: The context for this study is the software value chain. Drawing upon relational economic geography and global value chain literature, we build an analytical framework based on three conceptual building blocks: client power, upgrading, and upgrading practices. Based on the analytical framework and in-depth interviews, we design a case study of one OSP in the Pakistani software industry refer to as OSP#A Findings: The findings reveal that GVCs exercise a high level of power on OSPs. This power is exercised through enforcing certain conditions to participate and coordinate in GVCs. However, it is found that OSP#A is not passive recipient of these demands, instead, it actively manages the power asymmetry through building practices to adapt and collaborate in GVCs and attain relational proximity. Originality: The paper highlights the significance of upgrading practices and conceptualising upgrading as a process of improving relational power in GVCs by attaining relational proximity.