Abstract
The aim of this chapter is to analyze the linkages between and spillovers from foreign-owned (foreign) to domestic-owned (domestic) firms in the Czech automotive industry. Theoretically and conceptually, this chapter draws on two strands of literature: spillovers, linkages and effects of foreign direct investment on domestic firms and regional economic development; and literature on global production networks, global value chains and industrial upgrading. Empirical analysis is based upon unique data collected through a questionnaire completed by 317 foreign and domestic firms in 2009 and on site interviews with 100 firms conducted between 2009 and 2011. Data analysis has identified a low share of domestic suppliers in the total supplies of Czech-based foreign firms and diverse spillover effects from foreign to domestic firms. Domestic firms vary in their capabilities and absorptive capacity, which, along with the particular nature of the contemporary automotive value chain, significantly influence their ability and potential to benefit from linkages and spillovers.
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