Upgrading of Hungarian subsidiaries in machinery and automotive global value chains

Global networks shape international production and trade.The main question of our paper is how Hungarian companies can improve their positions within these global value chains.The production and export of automotive and machinery industry are dominated by foreign multinational enterprises, therefore these sectors were chosen as examples.Research is based on interviews that explore local manufacturing subsidiaries' product, process and functional upgrading experience.Our findings show that there are differences among the firms in terms of extent of upgrading.This depends on one hand, on the owner's global strategy and on the type of final products.On the other hand local capabilities are of crucial importance among the factors that influence the volume of intangible transfers.Furthermore, our interviews suggested that upgrading is not a unidirectional process: previously gained mandates can also be lost.Economic policy should support the business development and entrepreneurial learning and provide adequate conditions for suppliers and subsidiaries of leading multinational enterprises.