Inderscience Publishers

Upstream linkages between TNCs and local suppliers: evidences from Portugal

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This paper explores the development of long-term, close relationships that are likely to influence the relationship between Transnational Corporations (TNCs) affiliates and their local suppliers. Based on the interdependencies between six industrial foreign subsidiaries and 26 local suppliers, it is possible to conclude that the complementarity between local suppliers and their TNC clients depends on two dynamics: on the technological trajectory created by the supplier towards the upper steps of the technological competence; on the technological trajectory created by the transmissive capacity of the TNC client that helps their suppliers on their organisational transformation.

Keywords: industrialisation, transnational corporations, TNCs, foreign direct investment, FDI, small and medium-sized enterprises, SMEs, vertical coordination, technological capabilities, Portugal, local suppliers, organisational transformation

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