Prague Economic Papers 2007, 16(3):237-251 | DOI: 10.18267/j.pep.307

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

Yusaf H. Akbar1, Sonia Ferencikova2
1 School of Business, Southern New Hampshire University, 2500 N. River Road, Manchester, NH 03106 (y.akbar@snhu.edu).
2 Department of International Business, University of Economics, Dolnozemska 1, SK - 852 35 Bratislava (ferencik@dec.euba.sk).

The authors are attempting to draw together existing literature on the governance of GVCs; research on host country ""spillovers"" as a consequence of MNE activity and the broader cluster and innovation literature. While cluster research had done important work in identifying and operationalizing the necessary conditions for cluster formation, it had relatively ignored the global-local linkage brought by the presence of MNEs. The ""spillover"" literature has identified in theory numerous benefits of MNE presence in host countries. There was relatively little empirical work done in CEE to discover if these benefits actually exist. Neither literature had focused on how MNEs govern their GVCs. Thus bringing these sources together presents an important opportunity for international business. The authors find that in the Slovak case the industrial clusters among the firms surveyed were not much functional. On a strategic level, there appears to be little evidence of cooperation in areas of marketing, export promotion or investment. This is especially of concern in sectors such as automotive where cooperative strategies among suppliers could offer significant benefits.

Keywords: foreign direct investment, transformation in Central and Eastern Europe, industrial clustering, multinational enterprise
JEL classification: F21, F23

Published: January 1, 2007  Show citation

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Akbar, Y.H., & Ferencikova, S. (2007). Industrial Clustering and Global Value Chains in Central and Eastern Europe: Role of Multinational Enterprises in Industrial Upgrading. Prague Economic Papers, 16(3), 237-251. doi: 10.18267/j.pep.307
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