IDEAS home Printed from https://ideas.repec.org/a/eee/intman/v32y2026i2s1075425326000141.html

Institutional and relational underpinnings of vertical FDI spillovers in international buyer-supplier relationships: Insights from automotive suppliers

Author

Listed:
  • Nas, Tulay Ilhan
  • Sahin, Fatih
  • Golgeci, Ismail
  • Okan, Tarhan

Abstract

This study takes a fresh approach to explore the mechanisms of foreign direct investment (FDI) spillovers in the context of emerging economy firms, specifically focusing on the Turkish automotive industry. Given emerging economy firms' inherent constraints in R&D and resources, FDI serves as a critical avenue for them to acquire technological and managerial knowledge. While previous literature has extensively analyzed spillovers from an economic perspective, our research introduces a neoinstitutional perspective in organizational sociology to understand how these spillovers manifest and influence productivity and innovation. Importantly, we examine the role of international buyer-supplier relationships, a key aspect in shaping spillover outcomes. In so doing, we draw on rich qualitative data from 7 Turkish direct and sub-suppliers of large automotive multinational enterprises (MNEs). Our findings underscore the significant influence of the institutional context and relational mechanisms on the effectiveness of FDI spillovers, revealing why anticipated positive effects may not always materialize. This study contributes to the existing literature by addressing the limitations of prior research and provides practical insights for policymakers in emerging economies, empowering them to leverage FDI for economic growth and organizational success.

Suggested Citation

  • Nas, Tulay Ilhan & Sahin, Fatih & Golgeci, Ismail & Okan, Tarhan, 2026. "Institutional and relational underpinnings of vertical FDI spillovers in international buyer-supplier relationships: Insights from automotive suppliers," Journal of International Management, Elsevier, vol. 32(2).
    • Handle: RePEc:eee:intman:v:32:y:2026:i:2:s1075425326000141
    DOI: 10.1016/j.intman.2026.101340
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1075425326000141
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intman.2026.101340?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Xiaowen Tian, 2007. "Accounting for sources of FDI technology spillovers: evidence from China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(1), pages 147-159, January.
    2. Luosha Du & Ann Harrison & Gary Jefferson, 2011. "Do Institutions Matter for FDI Spillovers? The Implications of China’s “Special Characteristics”," Working Papers 33, Brandeis University, Department of Economics and International Business School, revised Sep 2012.
    3. Imranul Hoque & Mohammad B. Rana, 2020. "Buyer–supplier relationships from the perspective of working environment and organisational performance: review and research agenda," Management Review Quarterly, Springer, vol. 70(1), pages 1-50, February.
    4. Brian J. Aitken & Ann E. Harrison, 2022. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 6, pages 139-152, World Scientific Publishing Co. Pte. Ltd..
    5. Wang, Elizabeth Yi & Kafouros, Mario, 2020. "Location still matters! How does geographic configuration influence the performance-enhancing advantages of FDI spillovers?," Journal of International Management, Elsevier, vol. 26(3).
    6. Grimpe, Christoph & Sofka, Wolfgang, 2009. "Search patterns and absorptive capacity: Low- and high-technology sectors in European countries," Research Policy, Elsevier, vol. 38(3), pages 495-506, April.
    7. Reger, Guido, 2004. "Coordinating globally dispersed research centres of excellence--the case of Philips Electronics," Journal of International Management, Elsevier, vol. 10(1), pages 51-76.
    8. Carlo Altomonte & Enrico Pennings, 2009. "Domestic plant productivity and incremental spillovers from foreign direct investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(7), pages 1131-1148, September.
    9. Anabel Marin & Martin Bell, 2006. "Technology spillovers from Foreign Direct Investment (FDI): the active role of MNC subsidiaries in Argentina in the 1990s," Journal of Development Studies, Taylor & Francis Journals, vol. 42(4), pages 678-697.
    10. Audretsch, David B. & Belitski, Maksim, 2020. "The role of R&D and knowledge spillovers in innovation and productivity," European Economic Review, Elsevier, vol. 123(C).
    11. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    12. Xiaming Liu & Chengang Wang & Yingqi Wei, 2009. "Do local manufacturing firms benefit from transactional linkages with multinational enterprises in China?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(7), pages 1113-1130, September.
    13. C Annique Un, 2016. "The liability of localness in innovation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(1), pages 44-67, January.
    14. Alex Eapen, 2012. "Social structure and technology spillovers from foreign to domestic firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(3), pages 244-263, April.
    15. Krammer, Sorin M.S., 2015. "Do good institutions enhance the effect of technological spillovers on productivity? Comparative evidence from developed and transition economies," Technological Forecasting and Social Change, Elsevier, vol. 94(C), pages 133-154.
    16. Klaus E Meyer & Evis Sinani, 2009. "When and where does foreign direct investment generate positive spillovers? A meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(7), pages 1075-1094, September.
    17. Binyam Afewerk Demena & Peter A. G. van Bergeijk, 2019. "Observing FDI spillover transmission channels: evidence from firms in Uganda," Third World Quarterly, Taylor & Francis Journals, vol. 40(9), pages 1708-1729, September.
    18. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    19. Matija Rojec & Mark Knell, 2018. "Why Is There A Lack Of Evidence On Knowledge Spillovers From Foreign Direct Investment?," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 579-612, July.
    20. Javorcik, Beata Smarzynska & Spatareanu, Mariana, 2008. "To share or not to share: Does local participation matter for spillovers from foreign direct investment?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 194-217, February.
    21. Chaim Fershtman & Neil Gandal, 2011. "Direct and indirect knowledge spillovers: the “social network” of open‐source projects," RAND Journal of Economics, RAND Corporation, vol. 42(1), pages 70-91, March.
    22. Moralles, Herick Fernando & Moreno, Rosina, 2020. "FDI productivity spillovers and absorptive capacity in Brazilian firms: A threshold regression analysis," International Review of Economics & Finance, Elsevier, vol. 70(C), pages 257-272.
    23. Dubois, Anna & Gadde, Lars-Erik, 2002. "Systematic combining: an abductive approach to case research," Journal of Business Research, Elsevier, vol. 55(7), pages 553-560, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heim, Irina & Kalyuzhnova, Yelena & Ghobadian, Abby, 2023. "Win-win strategies for firms operating in resource-abundant countries: Technological spillovers and a collaborative diversification policy," Resources Policy, Elsevier, vol. 83(C).
    2. Yi Zhang, 2019. "Institutions, Firm Characteristics, and FDI Spillovers," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(5), pages 1109-1136, April.
    3. Danai Christopoulou & Nikolaos Papageorgiadis & Chengang Wang & Georgios Magkonis, 2021. "IPR Law Protection and Enforcement and the Effect on Horizontal Productivity Spillovers from Inward FDI to Domestic Firms: A Meta-analysis," Management International Review, Springer, vol. 61(2), pages 235-266, April.
    4. Dea Tusha & Jacob A. Jordaan, 2021. "Biased FDI spillovers in incomplete datasets: An empirical examination," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 582-600, May.
    5. Renfei Gao & André Sammartino, 2024. "How does inward foreign direct investment shape emerging market firm invention patenting tendency? Evidence from China," Asia Pacific Journal of Management, Springer, vol. 41(1), pages 407-436, March.
    6. Eapen, Alex & Yeo, Jihye & Sasidharan, Subash, 2019. "Finance constraints and technology spillovers from foreign to domestic firms," Economic Modelling, Elsevier, vol. 76(C), pages 50-62.
    7. Sara L. McGaughey & Pascalis Raimondos & Lisbeth La Cour, 2018. "What is a Foreign Firm? Implications for Productivity Spillovers," CESifo Working Paper Series 7109, CESifo.
    8. Deborah Winkler, 2018. "Potential and Actual FDI Spillovers in Global Value Chains The Role of Foreign Investor Characteristics, Absorptive Capacity and Transmission Channels," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(10), pages 5-44, December.
    9. Merlevede, Bruno & Schoors, Koen & Spatareanu, Mariana, 2014. "FDI Spillovers and Time since Foreign Entry," World Development, Elsevier, vol. 56(C), pages 108-126.
    10. Tianjiao Xia & Xiaohui Liu, 2017. "Foreign competition, domestic competition and innovation in Chinese private high-tech new ventures," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(6), pages 716-739, August.
    11. Sara L. McGaughey & Pascalis Raimondos & Lisbeth Cour, 0. "Foreign influence, control, and indirect ownership: Implications for productivity spillovers," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-22.
    12. Bournakis, Ioannis & Papanastassiou, Marina & Papaioannou, Sotiris, 2020. "Multinationals and Domestic TFP: Market Shares, Agglomerations Gains and Foreign Ownership," MPRA Paper 106626, University Library of Munich, Germany.
    13. Gustavo Canavire-Bacarreza & Luis Castro Peñarrieta, 2021. "Can licensing induce productivity? Exploring the IPR effect," Empirical Economics, Springer, vol. 61(2), pages 549-586, August.
    14. Ioannis Bournakis & Sotiris Papaioannou & Marina Papanastassiou, 2022. "Multinationals and domestic total factor productivity: Competition effects, knowledge spillovers and foreign ownership," The World Economy, Wiley Blackwell, vol. 45(12), pages 3715-3750, December.
    15. Rajneesh Narula & André Pineli, 2017. "Multinational Enterprises and Economic Development in Host Countries: What We Know and What We Don’t Know," Palgrave Studies in Impact Finance, in: Gianluigi Giorgioni (ed.), Development Finance, chapter 6, pages 147-188, Palgrave Macmillan.
    16. Sara L. McGaughey & Pascalis Raimondos & Lisbeth Cour, 2020. "Foreign influence, control, and indirect ownership: Implications for productivity spillovers," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(9), pages 1391-1412, December.
    17. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.
    18. Luo, Lingli & Yamanoi, Junichi & Ma, Xufei & Lei, Linan, 2026. "Beyond direct impact: Exploring inward FDI’s multifaceted effects on new venture creation," Journal of Business Venturing, Elsevier, vol. 41(2).
    19. Ha, Yoo Jung & Giroud, Axèle, 2015. "Competence-creating subsidiaries and FDI technology spillovers," International Business Review, Elsevier, vol. 24(4), pages 605-614.
    20. Bruno Merlevede & Victoria Purice, 2016. "Distance, time since foreign entry, and productivity spillovers from foreign direct investment," Papers in Regional Science, Wiley Blackwell, vol. 95(4), pages 775-800, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:32:y:2026:i:2:s1075425326000141. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.