International Buyer-Supplier Relationships, Transfer of Knowledge and Local Suppliers’ Capability

Celeste Amorim Varum

Chapter 14 in Multinationals, Clusters and Innovation, 2006, pp 234-252 from Palgrave Macmillan

Abstract: Abstract One of the primary motivations for attracting foreign direct investment (FDI) is to obtain advanced technology and knowledge and then, based on this, to establish domestic innovation capability. As is well recognized in the literature, there are several important channels through which inward FDI can benefit capabilities of domestic firms in the host country. Of particular relevance are spillovers that may take place vertically from foreign firms to their local suppliers by means of technology transfer, staff training and so forth. These vertical spillovers can then enhance the capabilities of local suppliers. In a context of global production networks, they act as a catalyst for international knowledge diffusion, as mediators of local capability formation (Ernst and Kim, 2002).

Keywords: Foreign Direct Investment; Tacit Knowledge; Quality System; Domestic Firm; Total Quality Management (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-62494-8_14

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DOI: 10.1057/9780230624948_14

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