Small business performance in MNC suppliers' networks
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 8 August 2008
Abstract
Purpose
The aim of this paper is to analyse the influence of a multinational company (MNC) on its local supplier's network. In particular, how the MNC influences the performance of supplier as well as non‐supplier local companies.
Design/methodology/approach
The paper studies a local productive system involved in the manufacturing of lighting systems for automobiles, and made up of small and medium sized companies and led by a single multinational corporation which contracts out to the local industry. The analysis includes both suppliers to the multinational as well as non‐suppliers.
Findings
The study shows how the existence of knowledge transfer influences productivity through the productive linkage established with local suppliers and their hiring of MNC former managers. Direct local suppliers experience higher productivity than do local suppliers from lower levels of the supply chain. Similarly, local suppliers hiring MNC former managers show higher productivity than those who have hired only local managers.
Research limitations/implications
One of the limitations of this paper is the size of the population studied. This paper focuses on one local supplier's network, and it only shows a very local experience. Another limitation is the difficulty in measuring the intensity of every channel of knowledge transfer. Thus, in the case of direct suppliers, it is very difficult to separate the effects of the knowledge transfer derived from the productive link and the effects derived from workers' mobility.
Originality/value
This paper identifies the key factors that influence the performance of the knowledge transfer into multinational corporation suppliers' networks related with the productitivy of local companies.
Keywords
Citation
María Cubillo‐Pinilla, J. (2008), "Small business performance in MNC suppliers' networks", Journal of Small Business and Enterprise Development, Vol. 15 No. 3, pp. 571-583. https://doi.org/10.1108/14626000810892355
Publisher
:Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited