Post‐crisis developments in global value chains - example of foreign investors’ Hungarian subsidiaries

Andrea Szalavetz ()
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Andrea Szalavetz: Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences

No 219, IWE Working Papers from Institute for World Economics - Centre for Economic and Regional Studies

Abstract: This paper investigates multinational corporations’ (MNCs’) organisational responses to the global financial crisis and the impact of value chain reorganisation on their Hungarian subsidiaries. We find that the global crisis has reinforced and intensified ongoing organisational reconfiguration trends and argue that crisis-prompted responses need to be separated from fundamental organisational transformation catalysed by the crisis. Strategic organisational realignment programmes have been driven by long-standing technological and market trends rather than by transient developments. Drawing on interview findings carried out at MNCs’ manufacturing subsidiaries in Hungary, we show that MNCs’ global reorganisation brought upgrading opportunities for local subsidiaries. Altogether, the surveyed Hungarian subsidiaries have benefitted from their owners’ cost-cutting and restructuring actions: they were on the receiving end, as production activities were relocated to Hungary. Moreover, the necessity of task integration and of co-location-driven synergy effects have intensified subsidiaries’ ongoing functional upgrading processes.

Keywords: crisis adaptation; organisational realignment, upgrading, manufacturing subsidiaries, Hungary (search for similar items in EconPapers)
JEL-codes: D23 F23 F44 L22 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-01
New Economics Papers: this item is included in nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:iwe:workpr:219

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