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| Abstract: Sustained economic growth in India has attracted an increasing number of multinational enterprises (MNEs). Existing studies have shown that technology and knowledge spillovers from MNEs have benefited Indian suppliers. However, participation in global value chains (GVCs) does not automatically lead to technological upgrading among local firms. This study hypothesizes that regional supplier ecosystems influence manufacturing performance through knowledge diffusion, coordination efficiency, and sourcing flexibility, using the automobile industry as a case study.
In the automobile industry, production is typically organized through multi-tier supplier networks, in which large assemblers depend not only on automotive component factories but also on a wide range of supporting industries. The empirical results from the fixed-effects model indicate a positive and statistically significant relationship between the growth of small and medium-sized factories in supporting industries and the sales growth of large automobile factories. These findings highlight the importance of regional industrial structures in shaping production outcomes within global value chains. |
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📅 Date: Friday, 7th August 2026 |