Global Production Networks, Foreign Direct Investment, and Supplier Linkages in the Integrated Peripheries of the Automotive Industry

Abstract

This article examines the regional development effects of foreign direct investment (FDI) in the integrated peripheries of the automotive industry by analyzing supplier linkages between foreign subsidiaries and domestic firms. It develops the spatial concept of integrated peripheries in core-based macroregional production networks. Conceptually, it draws on the dynamic notion of uneven development in contemporary capitalism, namely, on David Harvey’s spatiotemporal fix and on the global production networks concept of strategic coupling to investigate the mode of articulation of integrated peripheries into macro-regional production networks. Empirically, it analyzes the quantity and quality of supplier linkages in the automotive industry of Slovakia based on unique data collected by the author from both foreign subsidiaries and domestic firms through a survey completed by 133 automotive firms in 2010 and interviews with 50 automotive firms conducted between 2011 and 2015. The empirical analysis uncovered weak and dependent supplier linkages between foreign subsidiaries and domestic firms, which undermine the potential for technology and knowledge transfer from foreign subsidiaries to the domestic economy and positive long-term regional development effects of large FDI by automotive industry corporations in integrated peripheries.