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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. Copyright (c) 2004 by the Royal Dutch Geographical Society KNAG.

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
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    Cited by:

    1. 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.

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