Micro-level aspects of knowledge-based development: measuring quality-based upgrading in MNCs' Hungarian subsidiaries

Andrea Szalavetz

International Journal of Knowledge-Based Development, 2012, vol. 3, issue 4, 313-330

Abstract: With the fragmentation and the geographical dispersal of production, not goods but activities are the basic units of international trade analyses. Therefore, data about local subsidiaries' business functions (BFs) produce a more reliable picture on local subsidiaries' upgrading patterns than trade statistics with a 'product approach'. This paper presents the first results of a Hungarian research project on local subsidiaries' functional upgrading. Our results call for the refinement of the analytical framework and of data gathering methods. Three kinds of challenge have to be resolved: 1) BFs are decomposable, consisting of dozens of sub-functions, which results in sizeable inter-subsidiary differences in the contribution of 'identical' functions to MNC-level value added; 2) the impact of functional upgrading on subsidiaries' performance indicators is ambiguous; 3) BF decomposability impacts subsidiary classifications. Subsidiaries can be classified innovative contributors in specific sub-functions, while at the same time they are implementers with basic capabilities in other sub-functions of the same BF.

Keywords: business functions; functional upgrading; global value chains; GVCs; automobile industry; multinational corporations; MNCs; Hungary; automotive value chains; local subsidiaries; MNC subsidiaries; performance indicators; knowledge-based development. (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.inderscience.com/link.php?id=50089 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijkbde:v:3:y:2012:i:4:p:313-330

Access Statistics for this article

More articles in International Journal of Knowledge-Based Development from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().