Foreign Direct Investment (FDI) and Supplier-Oriented Upgrading in the Czech Motor Vehicle Industry

Rugraff E. Foreign direct investment (FDI) and supplier-oriented upgrading in the Czech motor vehicle industry, Regional Studies. The Czech Republic has succeeded in building a new comparative advantage in motor vehicle and motor component production. Yet, the Czech-owned companies only contribute weakly to the Czech upgrading. The Czech-owned companies are totally absent from first-tier suppliers and are only linked by casual technological relationships to foreign-owned multinational subsidiaries. This kind of relationship limits the vertical spillovers from foreign-owned multinational subsidiaries and is responsible for the existence of a weak link in the Czech automotive system that may foster the relocation of foreign-owned subsidiaries in foreign countries.