Industrial Clustering and Global Value Chains in Central and Eastern Europe: Role of Multinational Enterprises in Industrial Upgrading

Abstract

Ab stract:The au thors are at tempt ing to draw to gether ex ist ing lit er a ture on the gov er nance of GVCs; re search on host coun try "spillovers" as a con se quence of MNE ac tiv ity and the broader clus ter and in no va tion lit er a ture. While clus ter re search had done im por tant work in iden ti fy ing and operationalizing the nec es sary con di tions for clus ter for ma tion, it had rel a tively ig nored the global-lo cal link age brought by the pres ence of MNEs. The "spillover" lit er a ture has iden ti fied in the ory nu mer ous ben e fits of MNE pres ence in host coun tries. There was rel a tively lit tle em pir i cal work done in CEE to dis cover if these ben e fits ac tu ally ex ist. Nei ther lit er a ture had fo cused on how MNEs gov ern their GVCs. Thus bring ing these sources together presents an important opportunity for international business. The au thors find that in the Slo vak case the in dus trial clus ters among the firms sur veyed were not much func tional. On a stra te gic level, there ap pears to be lit tle ev i dence of co op er a tion in ar eas of mar ket ing, ex port pro mo tion or in vest ment. This is es pe cially of con cern in sec tors such as au to mo tive where co op er a tive strat e gies among sup pli ers could offer significant benefits.Keywords: trans for ma tion in Cen tral and East ern Eu rope, for eign di rect in vest ment, in dus trial clus ter ing, mul ti na tional enterprise JEL Clas si fi ca tion: F21, F23 In tro duc tionDoes the in ser tion of lo cal clus ters into the global value chains of mul ti na tional en terprises (MNEs) en hance or un der mine the abil ity of the clus ter to suc cess fully pur sue upgrad ing strat e gies? What is the im pact of in ter ac tions be tween clus ters and global value chains (GVCs) on eco nomic de vel op ment? Palpacuer and Parisotto (2003: 98) ar gue that there is a "rec og ni tion that com ple men tary an a lyt i cal frame works should be combined in novel forms to ana lyse the in ter play be tween lo cal and global forces, and, ul timately, de vise new attitude to employment and development policies".

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