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

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  • Andrea Szalavetz

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

Abstract

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.

Suggested Citation

  • Andrea Szalavetz, 2016. "Post‐crisis developments in global value chains - example of foreign investors’ Hungarian subsidiaries," IWE Working Papers 219, Institute for World Economics - Centre for Economic and Regional Studies- Hungarian Academy of Sciences.
  • Handle: RePEc:iwe:workpr:219
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    More about this item

    Keywords

    crisis adaptation; organisational realignment; upgrading; manufacturing subsidiaries; Hungary;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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