Keywords: international technology transfer, inter-firm learning, foreign TNCs, local suppliers, developing countries, transnational corporations, technology learning, AB Volvo, Brazil, China, India, Mexico, technological capabilities, technology management, small firms, technology upgrading
Learning from foreign TNCs: a study of technology upgrading by local suppliers to AB Volvo in Asia and Latin America
Our data from local suppliers to AB Volvo's truck and bus-plants in Brazil, China, India and Mexico show that foreign TNCs contribute to technology-learning and improved adaptive technological capabilities, which help suppliers to expand businesses with domestic and international OEM-customers in many industries and markets. This support the evolutionary perspective that technology transfers from industrialised to developing economies are based on local inter-firm linkages arising from regular manufacturing activities of foreign TNCs. A policy lesson is that business-linkages with foreign TNCs with a low-volume demand for high-quality products can result in technology-upgrading among small local suppliers who make necessary learning-investments.