Multinational Corporations, Value Chains and Knowledge Spillovers in the Global Aircraft Industry

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Jorge Niosi
Majlinda Zhegu

Abstract

The commercial aircraft manufacturing industry is starting a
process of delocalization from developed to developing countries. From its
original strongholds in the United States, Western Europe and Canada, it is
now moving towards the largest new industrial countries of Brazil, Russia,
India and China. The technology transfer channels include investment
by multinational corporations, participation in global value chains, and
outsourcing by large prime contractors based in North America and Western
Europe. The process through which technological learning occurs has been
studied in economics as international knowledge spillovers. In management,
similar processes have been studied under outsourcing and global value
chains. Drawing hypotheses from theory, the paper analyzes the patterns
of trade, foreign direct investment and outsourcing in the global aircraft
manufacturing industry. The evidence amassed shows that through these
mechanisms, North American and Western European aircraft industries risk
now losing their dominance to the developing countries.

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