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This article contributes to the limited number of studies on how agglomeration and spatial proximity contribute to the establishment of technology linkages between foreign transnational corporations and suppliers in developing countries. We use firm-level data, collected at the bus and truck plants of AB Volvo in Brazil, China, India, and Mexico, to analyze the extent to which "local" suppliers, located near the assembly plants, are in a better position than are other suppliers in the host country to take advantage of the technological assistance that Volvo provides as part of its ongoing business relations. Our analysis shows that many suppliers are provided with technological assistance, related both to "embodied" and "disembodied" forms of technology. Our main finding is that the higher transaction and communication costs that Volvo has to bear when interacting with nonlocal suppliers, compared to local suppliers, only marginally seem to affect the extent to which the suppliers are provided with technological assistance. However, geographic proximity is more crucial for opportunities for the suppliers to absorb external technology. Especially in China and India, but also in Brazil, local suppliers take advantage of their interaction with Volvo to a larger extent than do other suppliers. For many of the smaller domestic companies that make up the dominant share of Volvo's local suppliers, low transaction and communication costs and the opportunity to interact regularly with Volvo are an important determinant of the successful absorption of external technology. [ABSTRACT FROM AUTHOR]

Using unique firm-level data from Volvo Trucks and their 64 manufacturing suppliers in India, this paper focuses on the significance of technology transfer from transnational corporations (TNCs) to their domestic suppliers in developing countries. Our case study shows that a relatively small number of international follow-source suppliers have captured a dominant part of Volvo's local purchases of components, reducing the opportunities for domestic suppliers to forge business linkages with this foreign TNC. At the same time, the domestic suppliers, as well as the follow-source suppliers, seem to improve their internal capabilities from the technological assistance given by Volvo as part of their business relationships. Even a simple assembly operation by a TNC seems to generate important linkages and technological upgrading among domestic suppliers, thus enhancing their domestic and international market positions. Volvo's technological assistance to domestic suppliers was also transferred down in the supply chain, contributing to long-term improvements among the smaller companies that make up the lower tiers of the Indian auto-component sector. [ABSTRACT FROM AUTHOR]

The study is based on detailed firm-level data from around 300 foreign majority-owned affiliates (MOFAs) in manufacturing, in Sweden in 1993. The results show that intra-firm sales by MOFAs in Sweden are as high as those found in studies of manufacturing affiliates of US TNCs. Almost all of MOFAs' intra-firm exports are finished products, while intra-firm imports consist of material inputs and finished products for resale. This suggests that these MOFAs are only marginal involved in vertically integrated production chains, especially in terms of exports. The results of a regression analysis complement earlier studies by showing that the level and composition of intra-firm trade is significantly affected by the international strategy applied by TNCs when operating foreign manufacturing affiliates. Intra-firm exports of finished products and material inputs are positively associated with efficiency-seeking FDI, e.g. affiliates engaged in rationalised production. Market-seeking FDI is associated with intra-firm imports of complementary finished products for resale. By contrast, resource-seeking and strategic asset-seeking FDI was negatively associated with intra-firm trade. [ABSTRACT FROM AUTHOR]

IVARSSON I. (1999) Competitive industry clusters and inward TNC investments: the case of Sweden, Reg. Studies 33, 37-49. This study focuses on the importance of internationally competitive industry clusters in host countries as a pull factor for inward FDI. It is found that over half of foreign affiliates in Sweden operate in competitive host country clusters. An analysis of material and non-material linkages to host country firms generally shows a marginal difference between affiliates operating in competitive host country clusters and other affiliates. However, technological co-operation with host country firms is somewhat more substantial among affiliates operating in competitive host country clusters. It is less clear if this also means that TNCs can combine firm-specific competencies with competencies generated by affiliates operating in competitive host country clusters. IVARSSON I. (1999) Les grappes d'industries concurrentielles et l'investissement direct étranger des sociétés transnationales: étude de cas de la Suède, Reg. Studies 33, 37-49. L'étude porte sur l'importance dans les pays d'accueil des grappes d'industries, qui sont concurrentielles sur le plan international, comme force d'attraction quant à l'investissement direct étranger. Il s'avère que plus de la moitié des filiales étrangères en Suède fonctionnent à partir des grappes concurrentielles dans les pays d'accueil. En règle générale, l'analyse des liens matériels et immatériels avec les entreprises situées dans les pays d'accueil laisse voir une différence marginale entre les filiales qui fonctionnent à partir des grappes concurrentielles dans les pays d'accueil et les autres. Toujours estil que la coopération technologique avec les entreprises autochtones s'avère plus importante parmi les filiales qui fonctionnent à partir des grappes concurrentielles dans les pays d'accueil. Il est moins évident si, oui ou non, cela veut dire aussi que les sociétés transnationales peuvent associer les compétences propres à l'entreprise aux compétences engendrées par les filiales qui fonctionnent à partir des grappes concurrentielles dans les pays d'accueil. IVARSSON I. (1999) Kluster konkurrierender Industrien und nach innen gerichtete TNC Investierungen: der Fall Schweden, Reg. Studies 33, 37-49. Diese Studie konzentriert sich auf die Bedeutung in internationalem Wettbewerb stehender Industriekluster in Gastländernals Anziehungsfaktor bei nach innen gerichteten Auslandsdirektinvestierungen (Foreign Direct Investment - FDI). Es zeigt sich, daß mehr als die Hälfte der ausländischen Filialen in Schweden im Rahmen konkurrierender Gastlandkluster operieren. Eine Analyse der materiellen und nicht-materiellen Verknüpfungen mit Gastlandfirmen ergibt einen geringfügigen Unterschied zwischen affilierten Betrieben, die in konkurrierenden Gastlandklustern operieren, und anders affilierten. Die technologische Zusammenarbeit mit Firmen des Gastgeberlandes ist jedoch etwas größer unter affilierten Betrieben, die in konkurrierenden Gastlandklustern operieren. Es ist weniger eindeutig, ob dies auch bedeutet, daß TNCs firmenspezifische Kompetenzen mit solchen verbinden können,die durch in konkurrierenden Gastländerklustern operierende Affilierte geschaffen werden. [ABSTRACT FROM AUTHOR]