Spillovers from Foreign Direct Investment in Bulgarian Automobile Parts Industry
Spillovers from Foreign Direct Investment in Bulgarian Automobile Parts Industry

Summary/Abstract: Presented are the results from a conducted survey for analysis and evalua¬tion of horizontal and vertical spillovers from foreign direct investment (FDI) in automobile parts production. Foreign-owned companies can hardly manage to protect all knowledge of the use of modern technologies and practices so part of those are being absorbed by local firms. The research goal is to determine the impact of transnational corporations’ affiliates in sector C 29.3 “Production of automobile parts and accessories” on the enterprises from the local economy. The most significant horizontal spillover effects result from the new practices and tech-nologies, which can be copied through the methods of demonstration and imitation. As the most serious threat for Bulgarian firms within the sector is rated the possible labour mobility towards foreign-owned companies. The most significant vertical spillover effects to Bulgarian suppliers are realized through the degree of cooperation support, staff trainings, economies of scale and the set requirements for joined efforts. Due to the lack of market relations with Bulgarian clients and distributors “forward” vertical spillovers could not be identified.

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