New Europe College Regional Program Yearbook 2001-2002

DENIZ EYLEM YÖRÜK
have shown significant network developments that have helped to upgrade
both the firm and its partners within the chain (Table A.3).
Table 4. Overall assessment of the relationship between network
development strategy and industrial upgrading in MNE subsidiaries in
Romania and the Romanian firms.
MNC subsidiaries Romanian big firms
University
spin-off
FOR1 FOR2 FOR3 FOR4 ROM1 ROM2 ROM3 ROM4 ROMX
network
development
strategy
level of
industrial
upgrading
closed half open closed
Source: Interviews conducted by the author.
half
open
333
open
(implicitly)
open
half open
(open to
possibilites)
closed open
high high medium medium high high low low high
Second, the Romanian firms have a tendency to develop knowledge
networks with the universities, to which they have easy access, whereas
the foreign firms focus on the raw material procurement and thus establish
production networks with the upstream agriculture thereby helping in the
upgrading of agricultural production. On the one hand, the low quality of
domestic agricultural produce, together with declining quality of
agricultural technology with the fragmentation of the farms and inadequacy
of technical support from agricultural extension services after the fall of
the communist regime, have become a focal point of attention for foreign
entrants, once they move beyond importing some or all of the materials
(e.g., FOR3 in Table A.3). There are problems in securing hygiene of the
milk collected in the dairy industry due to the lack of milking machines
and fully equipped collection points, which are awaiting foreign
investments. In effect the foreign investors have been sucked into trying
to revive the upstream end of the industry, by having to teach the farmers
how to obtain the quantity and quality of output which they need for
downstream processing (Yoruk and von Tunzelmann, 2002). On the other
hand, the foreign firms do not want to diffuse their know-how to domestic
organizations through co-operation whatsoever if they are not convinced
that they will get something in return by way of reciprocity. Figure 2
clearly reveals this unidirectional knowledge flow within the MNE itself.