The research focuses on developing a better understanding of global value chains through institutional and stakeholder theories for examining market uncertainties, in addition to relational view, behavioral, and contingency theories of supply chains. Based on conflicting insights from these theories, this research investigates how relationships and operational outcomes of collaboration fare when market turbulence is present. In order to assess the relationship between supply chain collaboration and firm performance during market turbulence (uncertainties), we analyze data from focal firms headquartered in the United States and engaged in doing business in emerging economies (e.g., India). Our findings suggest that the operational outcomes of revenue generation and sharing, profitability, and increase in market share holds value for the focal company. The relational outcomes such as greater mutual commitment, more open information sharing, and greater respect for each other’s capabilities and contribution are of paramount importance for higher level of collaboration leading to improved inter-organizational firm performance, productivity and profitability. The research offers valuable insights for theory and practice of global value chains by focusing on the GVC disaggregation through the measurement of market turbulence, playing a key role in the success of collaborative buyer-supplier relationships (with a focus on US companies doing business in India) leading to an overall improved firm performance.