Upgrading of Hungarian subsidiaries in machinery and automotive global value chains

Andrea Elteto (), Andrea Szalavetz (), Gabor Tury () and Aniko Magashazi ()
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Andrea Elteto: Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences
Andrea Szalavetz: Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences
Gabor Tury: Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences
Aniko Magashazi: Corvinus University of Budapest, International Relations, Multidisciplinary Doctoral School

No 217, IWE Working Papers from Institute for World Economics - Centre for Economic and Regional Studies

Abstract: Global networks shape international production and trade. The main question of our paper is how Hungarian companies can improve their positions within these global value chains. The production and export of automotive and machinery industry are dominated by foreign multinational enterprises, therefore these sectors were chosen as examples. Research is based on interviews that explore local manufacturing subsidiaries' product, process and functional upgrading experience. Our findings show that there are differences among the firms in terms of extent of upgrading. This depends on one hand, on the owner’s global strategy and on the type of final products. On the other hand local capabilities are of crucial importance among the factors that influence the volume of intangible transfers. Furthermore, our interviews suggested that upgrading is not a unidirectional process: previously gained mandates can also be lost. Economic policy should support the business development and entrepreneurial learning and provide adequate conditions for suppliers and subsidiaries of leading multinational enterprises.

Keywords: global value chains; machinery industry; automotive industry; Hungary (search for similar items in EconPapers)
JEL-codes: D22 D24 E23 F16 F23 L6 L62 O52 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2015-11
New Economics Papers: this item is included in nep-cse, nep-int, nep-mac and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:iwe:workpr:217

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