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Subcontracting Relationship of Indian SMEs with a Global TNC: Do SMEs Gain and How?

Sudhir Kumar, R and Bala Subrahmanya, MH (2007) Subcontracting Relationship of Indian SMEs with a Global TNC: Do SMEs Gain and How? In: Presented at Singapore Economic Review Conference 2007 held at Singapore, 2-4 August 2007, Singapore.

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Abstract

TNCs having their production bases in developing countries provide increasing opportunity for local SMEs to have subcontracting relationships with these TNCs.Even though some theoretical and a few empirical studies throw light on the nature of assistance provided by TNCs to local SMEs through subcontracting relationships,none of the studies so far analysed the diversity of assistance that subcontracting SMEs of India would be able to obtain from a TNC using quantitative measurement.This paper probes the extent of linkages and diversity of assistance that Indian subcontracting SMEs would be able to obtain from a TNC customer based on primary data from SME subcontractors of a major TNC automobile manufacturer. Statistical analysis of direct assistance revealed that SMEs receive more of product and purchase process assistance. The extent of assistance for their process related,marketing, human resource and financial requirements is low whereas the assistance for their organisational know-how requirements is moderate. The major indirect benefits these SMEs could achieve are knowledge transfer, business volume, superior work culture, reputation and quality improvement.

Item Type: Conference Paper
Keywords: Subcontracting;Assistance;SMEs; TNCs;Automobile industry; India JEL classifications:L 62; L 14
Department/Centre: Division of Information Sciences > Management Studies
Date Deposited: 28 Oct 2011 08:20
Last Modified: 28 Oct 2011 08:20
URI: http://eprints.iisc.ernet.in/id/eprint/41805

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