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Micro-level aspects of knowledge-based development: measuring quality-based upgrading in MNCs' Hungarian subsidiaries

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  • Andrea Szalavetz

Abstract

With the fragmentation and the geographical dispersal of production, not goods but activities are the basic units of international trade analyses. Therefore, data about local subsidiaries' business functions (BFs) produce a more reliable picture on local subsidiaries' upgrading patterns than trade statistics with a 'product approach'. This paper presents the first results of a Hungarian research project on local subsidiaries' functional upgrading. Our results call for the refinement of the analytical framework and of data gathering methods. Three kinds of challenge have to be resolved: 1) BFs are decomposable, consisting of dozens of sub-functions, which results in sizeable inter-subsidiary differences in the contribution of 'identical' functions to MNC-level value added; 2) the impact of functional upgrading on subsidiaries' performance indicators is ambiguous; 3) BF decomposability impacts subsidiary classifications. Subsidiaries can be classified innovative contributors in specific sub-functions, while at the same time they are implementers with basic capabilities in other sub-functions of the same BF.

Suggested Citation

  • Andrea Szalavetz, 2012. "Micro-level aspects of knowledge-based development: measuring quality-based upgrading in MNCs' Hungarian subsidiaries," International Journal of Knowledge-Based Development, Inderscience Enterprises Ltd, vol. 3(4), pages 313-330.
    • Handle: RePEc:ids:ijkbde:v:3:y:2012:i:4:p:313-330
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    Citations

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    Cited by:

    1. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.
    2. 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.
    3. Slavo Radosevic & Katerina Ciampi Stancova, 2018. "Internationalising Smart Specialisation: Assessment and Issues in the Case of EU New Member States," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(1), pages 263-293, March.

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