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Post‐crisis developments in global value chains - example of foreign investors’ Hungarian subsidiaries

Listed author(s):
  • Andrea Szalavetz

    ()

    (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)

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    This paper investigates multinational corporations’ (MNCs’) organisational responses to the global financial crisis and the impact of value chain reorganisation on their Hungarian subsidiaries. We find that the global crisis has reinforced and intensified ongoing organisational reconfiguration trends and argue that crisis-prompted responses need to be separated from fundamental organisational transformation catalysed by the crisis. Strategic organisational realignment programmes have been driven by long-standing technological and market trends rather than by transient developments. Drawing on interview findings carried out at MNCs’ manufacturing subsidiaries in Hungary, we show that MNCs’ global reorganisation brought upgrading opportunities for local subsidiaries. Altogether, the surveyed Hungarian subsidiaries have benefitted from their owners’ cost-cutting and restructuring actions: they were on the receiving end, as production activities were relocated to Hungary. Moreover, the necessity of task integration and of co-location-driven synergy effects have intensified subsidiaries’ ongoing functional upgrading processes.

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    Paper provided by Institute for World Economics - Centre for Economic and Regional Studies- Hungarian Academy of Sciences in its series IWE Working Papers with number 219.

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    Length: 36 pages
    Date of creation: Jan 2016
    Handle: RePEc:iwe:workpr:219
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