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International Technology Transfer to Local Suppliers by Volvo Trucks in India

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  • Inge Ivarsson
  • Claes Göran Alvstam

Abstract

This paper present a case study of international technology transfer, where foreign transnational companies (TNCs) in developing countries provide their local suppliers with technological assistance as part of their on‐going business relationships. The analysis is set against a background of changing corporate strategies, where TNCs increasingly use ‘follow sourcing’, i.e. international suppliers set up operations close to their main established customers worldwide, leading to a situation where smaller indigenous suppliers, especially in developing countries, face difficulties in establishing business relationships with foreign TNCs that can lead to increased technological capabilities. We use unique firm‐level data collected at Volvo Trucks’ assembly plant in India and show that domestic suppliers can improve their technological capability through a transfer of both product and production technology. Our findings complement the existing empirical litterature by showing that local technology transfer can arise from new green‐field investments by TNCs focused on more simple assembly operations.

Suggested Citation

  • Inge Ivarsson & Claes Göran Alvstam, 2004. "International Technology Transfer to Local Suppliers by Volvo Trucks in India," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 95(1), pages 27-43, February.
    • Handle: RePEc:bla:tvecsg:v:95:y:2004:i:1:p:27-43
    DOI: 10.1111/j.0040-747X.2004.00291.x
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    Cited by:

    1. Richard Perkins & Eric Neumayer, 2004. "The international diffusion of new technologies: a multi-technology analysis of latecomer advantage and global economic integration," Development and Comp Systems 0407001, University Library of Munich, Germany, revised 08 Dec 2004.
    2. Fuchs Martina & Winter Johannes, 2008. "Competencies in subsidiaries of multinational companies," ZFW – Advances in Economic Geography, De Gruyter, vol. 52(1), pages 209-220, October.
    3. Ivarsson, Inge & Alvstam, Claes Goran, 2005. "Technology transfer from TNCs to local suppliers in developing countries: A study of AB Volvo's truck and bus plants in Brazil, China, India, and Mexico," World Development, Elsevier, vol. 33(8), pages 1325-1344, August.
    4. Ian Goldin & Kenneth Reinert, 2005. "Global capital flows and development: A Survey," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(4), pages 453-481.
    5. Duanmu, Jing-Lin & Fai, Felicia M., 2007. "A processual analysis of knowledge transfer: From foreign MNEs to Chinese suppliers," International Business Review, Elsevier, vol. 16(4), pages 449-473, August.
    6. Bosetti, Valentina & Longden, Thomas, 2013. "Light duty vehicle transportation and global climate policy: The importance of electric drive vehicles," Energy Policy, Elsevier, vol. 58(C), pages 209-219.
    7. Majumdar, Satyajit, 2010. "'How do they plan for growth in auto component business?' - A study on small foundries of western India," Journal of Business Venturing, Elsevier, vol. 25(3), pages 274-289, May.
    8. Inge Ivarsson & Claes Göran Alvstam, 2010. "Upstream Control and Downstream Liberty of Action?," Review of Market Integration, India Development Foundation, vol. 2(1), pages 43-60, April.
    9. Joanna Scott-Kennel, 2007. "Foreign direct investment and local linkages: An empirical investigation," Management International Review, Springer, vol. 47(1), pages 51-77, February.

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