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Czech suppliers of multinational corporations : benefits and challenges (English)

This report provides a broader context for the evaluation of the Czech invest's supplier development program (SDP). This is done by analyzing: (i) the factors driving sourcing decisions of multinational corporations (MNCs), (ii) characteristics of Czech companies which successfully managed to become MNC suppliers, (iii) the nature and the benefits of the supplying relationship from the perspective of the Czech suppliers, (iv) the rationale for the existence of the SDP, and (v) the program's strengths and areas for improvement. The analysis is based on the results of the enterprise survey conducted by foreign investment advisory service (FIAS) in the Czech Republic during the summer and fall of 2003. The survey was designed to reflect the views of Czech companies, suppliers and non-suppliers, as well as MNCs operating in the Czech Republic. Three hundred and ninety one Czech firms and hundred nineteen foreign enterprises were interviewed face-to-face by professional interviewers who visited respondents’ workplaces. The focus of the survey was on manufacturing firms that is those operating in sectors 15-36 according to the statistical classification of economic activities in the European Community (NACE) classification. About one-fifth of respondents were located in the capital city of Prague while the rest was distributed across all regions of the country. To facilitate the effectiveness of the program it is necessary to keep the SDP distinct and separate from the small and medium enterprise (SME) program that Czech invest has taken over, which may require resisting some political pressures. Securing help of an experienced expatriate consultant familiar with European Union (EU) rules and requirements can be a great advantage in the efforts to tap into the EU financing available to the Czech Republic.


  • Author

    Smarzynska, Beata, Spatareanu,Mariana

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  • Document Type

    Working Paper

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  • Total Volume(s)


  • Country

    Czech Republic,

  • Region

    Europe and Central Asia,

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  • Doc Name

    Czech suppliers of multinational corporations : benefits and challenges

  • Keywords

    selection model;foreign investment advisory service;access to new technology;foreign direct investment;higher value added;cost of goods;direct foreign investment;lack of credit;SME support program;access to financing;movement of labor;chance of survival;quality of product;economics of transition;knowledge intensive sector;revenue from sales;quality control system;long term relationships;difference in wages;absence of credit;regression results;fixed effect;production technology;raw material;local source;multinational corporation;foreign language;advance payment;foreign company;business review;foreign enterprise;domestic supplier;product quality;horizontal spillover;supply chain;export market;business strategy;company management;transport cost;Technology Transfer;Flexible Production;survey results;production function;foreign presence;credit constraint;computer system;foreign bank;high wage;International Trade;manufacturing sector;firm survey;productivity growth;financial planning;financial constraint;inventory management;supplier development;input use;foreign investor;financial information;increase productivity;transparent manner;foreign affiliate;production management;scale economy;Industrialized countries;profit margin;political pressure;increased demand;private entity;industrialized country;intermediate product;practical skill;local market;knowledge spillover;government action;increased competition;capital stock;empirical evidence;import liberalization;Fixed Assets;standard error;regression analysis;public attention;intellectual property;productivity effect;anecdotal evidence;selection criterion;productivity spillovers;international economics;business environment;global strategies;firm level;foreign ownership;industry characteristic;econometric analysis;turnover rate;business experience;supply contract;home countries;productivity increase;direct payment;positive externality;government fund;empirical research;technological integration;brand reputation;marketing skills;learning effect;home country;technology licensing;business practice;worth emphasizing;secure financing;transport equipment;international company;production cost;technology spillover;personnel training;financial intermediation;adverse shock;Business Climate;transition process;survey sample;Extractive Industry;survey respondent;labor intensity;purchase price;take time;globalized economy;econometric technique;SME credit;aluminum alloys;automotive industry;production line;business relationship;foreign country;production process;delivery targets;program selection;performance result;firm size;pedagogical tool;business community;publicity campaign;business contract;manufacturing industry;intermediate input;local input;geographic proximity;import duty;local content;competitive price;parent company;enterprise survey;foreign share;active participation;medical equipment;electrical machinery;food product;wood product;communications equipment;basic metal;panel data;economic research;positive coefficient;supplier network;



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Smarzynska, Beata Spatareanu,Mariana

Czech suppliers of multinational corporations : benefits and challenges (English). Washington, D.C. : World Bank Group.