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Upgrading of Hungarian subsidiaries in machinery and automotive global value chains

Author

Listed:
  • 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)

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.

Suggested Citation

  • Andrea Elteto & Andrea Szalavetz & Gabor Tury & Aniko Magashazi, 2015. "Upgrading of Hungarian subsidiaries in machinery and automotive global value chains," IWE Working Papers 217, Institute for World Economics - Centre for Economic and Regional Studies.
    • Handle: RePEc:iwe:workpr:217
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    File URL: https://vgi.krtk.hu/publikacio/no-217-2015-11/
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    References listed on IDEAS

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    More about this item

    Keywords

    global value chains; machinery industry; automotive industry; Hungary;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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