Whose success? The state–foreign capital nexus and the development of the automotive industry in Slovakia

Abstract

Using the case study of Slovakia, this article considers the role of the state in the rapid growth of the automotive industry in integrated peripheral markets of the global automotive industry. Although this growth has been mainly driven by the investment strategies of automotive lead firms, the state has played an important role by accommodating the strategic needs of foreign capital through neoliberal economic policies. In addition to secondary sources, the empirical research is based on a 2010 survey of 299 Slovak-based automotive firms with a response rate of 44% and on 38 on-site firm-level interviews conducted between 2011 and 2013 and one in 2005. The analysis draws upon approaches in economic geography, international political economy and upon global value chains and global production networks perspectives to argue that the successful development of the automotive industry in Slovakia has been achieved at the expense of its overwhelming dependence on foreign capital and corporate capture. The article considers the potential consequences of dependent industrial development for the domestic automotive industry and its position in the international division of labor.

Value creation and value capture in the automotive industry: Empirical evidence from Czechia

“…In the absence of a strong domestic automotive industry, it makes sense to attract foreign assembly firms because Tier 1 foreign suppliers will likely follow, which will also encourage foreign Tier 2 and Tier 3 suppliers to invest. Most ECE countries have followed this approach and engaged in aggressive bidding for foreign assembly plants in the 1990s and 2000s (Drahokoupil, 2009;Pavlı´nek, 2014). However, less developed countries with a weak domestic manufacturing sector need to factor in potential long-term less tangible costs of these FDI-oriented policies, such as increased economic dependence on foreign TNCs, outflow of profits, and the danger of being locked in an unfavorable position in the international division of labor (No¨lke and Vliegenthart, 2009).…”

Agglomeration Economies and Technology Intensity of Industry Sector in Slovakia

“…Výsledkom ekonomickej transformácie bol pokles regionálnej špecializácie v dôsledku rozpadu a zániku veľkých priemyselných komplexov, ktoré existovali v období extenzívnej socialistickej industrializácie . Druhá etapa ekonomickej integrácie súvisí s vytváraním rôznych variet kapitalizmu (Nölke a Vliegenthart, 2009), ktoré sa odlišujú na základe objemu priamych zahraničných investícii, ktoré v prípade Slovenska smerovali najmä do automobilového priemyslu (Pavlínek, 2016).…”

“…Autorky Potomová a Letková (2011) uvádzajú, že v rámci Žilinského kraja k najväčším lokálnym priemyselným zamestnávateľom patria podniky pôsobiace v priemyselnom parku v Kysuckom Novom Meste a v okrese Bytča, ktoré sú lokalizované v zázemí okresu Žilina. V súvislosti s rozvojom automobilového priemyslu Pavlínek (2016) tvrdí, že zvyšujúce sa výdavky štátu na prilákanie zahraničných investícií do automobilového priemyslu oslabuje sieť slovenských subdodávateľov, pretože s príchodom nového zahraničného investora prichádza aj časť zahraničných subdodávateľov, ktorá sa stáva súčasťou produkčných sieti a bráni procesu zlepšovania pozícií slovenských firiem v rámci dodávateľských reťazcov. Jacobs (2017) uvádza, že zámerné spoliehanie sa na zahraničné investície, ktoré sú výsledkom zdedenej odvetvovej štruktúry a transformačných stratégií vládnej politiky, môže viesť k nadmernej závislosti na nich a brániť dlhodobému ekonomickému rastu.…”

Влияние Внешних Факторов На Развитие Рынка Консалтинговых Услуг

“…For example, the experiences of Mexico and Central American countries as assembly manufacturers have been likened to the creation of an enclave economy, with few domestic linkages (Gallagher and Zarsky, 2007;Dussel Peters, 2008). The same can be said about the electronics and automotive industries in Eastern and Central Europe (Plank and Staritz, 2013;Pavlinek, 2015;Pavlinek and Zenka, 2016). There has been significant "internal upgrading" within MNE affiliates, but it has involved very few spillovers to the domestic economy in the form of productivity improvements and imitation by domestic firms, partly due to limited linkages of MNEs with local firms and labour markets (Fons-Rosen et al, 2013;Paus, 2014).…”