Subcontracting and knowledge transfer from TNC to Indian SMEs in the automobile industry: how significant is it?

R. Sudhir Kumar and M.H. Bala Subrahmanya
Authors registered in the RePEc Author Service: Bala Subrahmanya Mungila Hillemane

International Journal of Entrepreneurship and Small Business, 2010, vol. 10, issue 4, 460-483

Abstract: Trans National Corporations (TNCs) with production bases in developing countries provide increasing opportunity for local Small and Medium Enterprises (SMEs) to have subcontracting relationships with these TNCs. Even though some theoretical and a few empirical studies have thrown light on the nature of assistance provided by TNCs to local SMEs through subcontracting relationships, none of the studies have so far analysed the diversity of assistance that the subcontracting SMEs of India would be able to obtain from a TNC by using quantitative measurement. This paper probes the extent of linkages and diversity of assistance that Indian subcontracting SMEs would be able to obtain from a TNC customer based on primary data from SME subcontractors of a major TNC automobile manufacturer. Statistical analysis of direct assistance revealed that SMEs receive more product and purchase process assistance. The extent of assistance for their process-related, marketing, human resource and financial requirements is low, whereas the assistance for their organisational know-how requirements is moderate.

Keywords: subcontracting; subcontractors; multinational corporations; MNCs; transnational corporations; TNCs; knowledge transfer; India; automobile industry; production bases; developing countries; quantitative measurement; linkages; diversity; primary data; direct assistance; statistical analysis; purchasing; human resource management; HRM; marketing; financial assistance; organisational know-how; small and medium-sized enterprises; automotive SMEs; entrepreneurs; indigenous entrepreneurship. (search for similar items in EconPapers)
Date: 2010
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