Local Entrepreneurship within Global Production Networks: the Automotive Industry in Mexico (2000-2010)

Type de publication:

Conference Paper


Gerpisa colloquium, Paris (2011)


From the decade of the 1980s, Mexico became a highly attractive location for global automobile assemblers. Geographical proximity and low production costs came associated with high productivity levels, making this country an important location in the bitter struggle for market share in the North American market.

As this industry became highly concentrated, driven by a small number of very large assembly firms and a privileged group of highly globalized transnational suppliers, the benefits for the host localities has turned to be a highly controversial issue.

Taking this controversy as a background, a case study was designed to analyze the incorporation of local suppliers around a major assembly plant from Ford Motor Company and its global suppliers in Hermosillo, Mexico. The empirical analysis consisted on a survey applied to a sample of 166 small and medium size local firms, and 56 interviews with managers of transnational firms, owners of local companies, and ex-employees of the Ford plant in Hermosillo. Also¸ the paper analyses a survey on Multinational firms in Mexico in order to determine the diffusion of spill-overs.

Our findings revealed that while most local suppliers could be classified in low added value products and services, with very limited functional roles within the supply chain, a recently emerged trend is the incorporation of a handful of knowledge-intensive small local businesses providing higher value services and playing more important roles within the supplier chain. We analyze the factors that have enable these firms to emerge and evolve, and propose a model of interactions where both enabling and inhibiting factors are considered, with the purpose to improve the understanding of the potential of global production networks to foster local entrepreneurship, and to identify the factor that policies should target in their efforts to promote these emerging firms. 

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