Knowledge Transfer from TNCs and Upgrading of Domestic Firms: The Polish Automotive Sector

SummaryThis paper focuses on the impact of vertical knowledge transfer from foreign affiliates of Transnational Corporations (TNCs) to indigenous Polish suppliers. Firm-level data was collected through a survey among foreign affiliates and domestic suppliers in the Polish automotive sector. The study finds that foreign firms contribute to the knowledge base of local firms, and that the knowledge domestic suppliers receive enables them to enhance their performance, but also that it is R&D intensity that is critical for suppliers’ new knowledge creation. Inter-firm relationships are shown to play a significant role in the process of knowledge transfer and acquisition between foreign firms and domestic suppliers