Interest in the topic of governance and interfirm relationships in the Ethiopian leather and leather products industry was developed after observing a gap in the literature on value chain research at the international level and finding only a few empirical studies on value chains at the local level. Most of the value chain research conducted throughout the world are either too general or are simply functionalistic and, thus, fail to address the socio-cultural context. This study contributes to the literature in several ways: firstly, the present research suggests that a central focus of value chain analysis should be the examination of social networks within local, but also global, value chains, as social relations might play an important and so far neglected role in the struggle to participate in the rapidly changing world economy. Secondly, as a clear departure from mainstream value chain research, this study makes use of a mixture of value chain and network approaches for exploring processes and micro-level interactions used by individuals to construct and maintain networks.