Abstract
What types of relational and institutional mechanisms shape knowledge flows and the upgrading capabilities of emerging-market firms in the face of economic liberalization? We analyze the Argentine autoparts sector to distinguish the relative impact of different types of network relationships on a firm's process and product upgrading. A few social ties to international assemblers appear to be most beneficial for local suppliers, although they may be insufficient to compensate fully for the negative effect of being located in a lower tier. Supplier–customer relationships that are part of regular, disciplined discussions for product and process improvements appear to be especially beneficial for upgrading.
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