Title: Upgrading of TNC subsidiaries: the case of the Polish automotive industry

Authors: Johannes Winter

Addresses: Department of Economic and Social Geography, University of Cologne, Albertus-Magnus-Platz, Cologne 50923, Germany

Abstract: The automotive industry is Europe|s leading industrial sector and transmitter of innovations and cyclical trends. Due to the structural downturn in the last decades, car manufacturers have begun to focus on their core competencies. Initially, only assembly and low-tech production were decentralised to emerging markets. Today, internationalisation also affects knowledge-intensive capacities. Faced with this volatile economic environment, we should thus view the intra-corporate allocation of competencies not as a top-down hierarchy with very separate responsibilities and roles, but as a heterarchy with scope for subsidiary upgrading. By means of foreign direct investments, intra-corporate knowledge transfer and self-acquisition of corporate competencies, foreign subsidiaries can build up technological and organisational competencies. Drawing upon a theoretical gap in existing economic geography and international business literature, a conceptual framework for the subdivision of corporate competencies is developed in this study and applied in the empirical context of the Polish automotive industry.

Keywords: subsidiary upgrading; transnational corporations; TNCs; global value chains; corporate competencies; learning; automotive manufacturing; automobile industry; transition countries; Central and Eastern Europe; CEE; TNC subsidiaries; Poland; foreign direct investment; FDI; knowledge transfer; internationalisation.

DOI: 10.1504/IJATM.2010.032621

International Journal of Automotive Technology and Management, 2010 Vol.10 No.2/3, pp.145 - 160

Published online: 09 Apr 2010 *

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