Volvo Trucks Research Articles

International technology transfer through local business linkages: the case of Volvo Trucks and their domestic suppliers in India

Using unique firm‐level data from Volvo Trucks and their 64 manufacturing suppliers in India, this paper focuses on the significance of technology transfer from transnational corporations (TNCs) to their domestic suppliers in developing countries. Our case study shows that a relatively small number of international follow‐source suppliers have captured a dominant part of Volvo's local purchases of components, reducing the opportunities for domestic suppliers to forge business linkages with this foreign TNC. At the same time, the domestic suppliers, as well as the follow‐source suppliers, seem to improve their internal capabilities from the technological assistance given by Volvo as part of their business relationships. Even a simple assembly operation by a TNC seems to generate important linkages and technological upgrading among domestic suppliers, thus enhancing their domestic and international market positions. Volvo's technological assistance to domestic suppliers was also transferred down in the supply chain, contributing to long‐term improvements among the smaller companies that make up the lower tiers of the Indian auto‐component sector.

International Technology Transfer to Local Suppliers by Volvo Trucks in India

ABSTRACTThis paper present a case study of international technology transfer, where foreign transnational companies (TNCs) in developing countries provide their local suppliers with technological assistance as part of their on‐going business relationships. The analysis is set against a background of changing corporate strategies, where TNCs increasingly use ‘follow sourcing’, i.e. international suppliers set up operations close to their main established customers worldwide, leading to a situation where smaller indigenous suppliers, especially in developing countries, face difficulties in establishing business relationships with foreign TNCs that can lead to increased technological capabilities. We use unique firm‐level data collected at Volvo Trucks’ assembly plant in India and show that domestic suppliers can improve their technological capability through a transfer of both product and production technology. Our findings complement the existing empirical litterature by showing that local technology transfer can arise from new green‐field investments by TNCs focused on more simple assembly operations.

International Technology Transfer to Local Suppliers by Volvo Trucks in India

This paper present a case study of international technology transfer, where foreign transnational companies (TNCs) in developing countries provide their local suppliers with technological assistance as part of their on-going business relationships. The analysis is set against a background of changing corporate strategies, where TNCs increasingly use ‘follow sourcing’, i.e. international suppliers set up operations close to their main established customers worldwide, leading to a situation where smaller indigenous suppliers, especially in developing countries, face difficulties in establishing business relationships with foreign TNCs that can lead to increased technological capabilities. We use unique firm-level data collected at Volvo Trucks’ assembly plant in India and show that domestic suppliers can improve their technological capability through a transfer of both product and production technology. Our findings complement the existing empirical litterature by showing that local technology transfer can arise from new green-field investments by TNCs focused on more simple assembly operations.

Societal effects meet sectoral effects: work organization, competencies and payment systems in the Volvo Commercial Vehicle Division

By comparing the development of competence payment systems in Volvo's Commercial Vehicle plants in Sweden, Belgium, and the UK, the paper seeks to explain some of the reasons why the UK is lagging behind in the development of innovative pay systems. In the Commercial Vehicle sector the reticence of UK-based assemblers such as Volvo and Leyland Trucks to introduce new forms of payment systems can be only partially explained with reference to societal factors. One has to look further, to the historical development of the UK automotive sector and the perception of management that the introduction of a payment system based upon individual effort would lead back to the restrictive practices and demarcation disputes which exemplified the employment relationship in the 1960s and 1970s.