Third World Multinationals: Engine of Competitiveness or New Form of Dependency?

225 Pages·2003·3.428 MB·English

by  Francesca Beausang (auth.)

Third World Multinationals
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Third World Multinationals
Engine of Competitiveness or New Form
of Dependency?
Francesca Beausang
© Francesca Beausang 2003
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
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save with written permission or in accordance with the provisions of the
Copyright, Designs and Patents Act 1988, or under the terms of any licence
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Tottenham Court Road, London W1T 4LP.
Any person who does any unauthorized act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The author has asserted her right to be identified as
the author of this work in accordance with the Copyright,
Designs and Patents Act 1988.
First published 2003 by
PALGRAVE MACMILLAN
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Companies and representatives throughout the world
PALGRAVE MACMILLAN is the global academic imprint of the Palgrave
Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd.
Macmillan® is a registered trademark in the United States, United Kingdom
and other countries. Palgrave is a registered trademark in the European
Union and other countries.
ISBN 978-1-349-51174-7 ISBN 978-0-230-50832-3 (eBook)
DOI 10.1057/9780230508323
This book is printed on paper suitable for recycling and made from fully
managed and sustained forest sources.
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging in Publication Data
Beausang, Francesca, 1975–
Third world multinationals:engine of competitiveness or new form
of dependency?/Francesca Beausang.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-349-51174-7
1. International business enterprises—Brazil. 2. International
business enterprises—Chile. 3. Competition—Brazil.
4. Competition—Chile. 5. Brazil—Economic conditions.
6. Chile—Economic conditions. I. Title.
HD2833.B425 2003
338.8′8981—dc21 2003041431
10 9 8 7 6 5 4 3 2 1
12 11 10 09 08 07 06 05 04 03
Contents
List of Tables viii
List of Figures x
Acknowledgements xi
List of Abbreviations xii
1 Introduction 1
1.1 Introduction 1
1.2 Main Thesis 1
1.3 Objective 2
1.4 Links 3
1.5 Method 5
1.6 Detailed Structure 5
1.7 Summary 7
2 The Theory of the Developed Country Multinational
Enterprise and the Third World Multinational Enterprise 8
2.1 Introduction 8
2.2 Multinationalization Motives of Developed Country
Multinational Enterprises 9
2.3 Competitive Advantages of Developed Country
Multinational Enterprises 20
2.4 Host Country Choices and Entry Forms of Developed
Country Multinational Enterprises 24
2.5 The Third World Multinational Enterprise 29
2.6 Brazilian and Chilean Multinational Enterprises 40
2.7 Summary 45
3 Fieldwork on Brazilian and Chilean Multinational
Enterprises 46
3.1 Introduction 46
3.2 Case Studies 46
3.3 Theoretical Implications 56
3.4 Summary 60
v
vi Contents
4 Competitiveness of Multinational Enterprises 62
4.1 Introduction 62
4.2 Indicators of Firm Competitiveness 63
4.3 Organization 64
4.4 Networks and Multinational Enterprises 70
4.5 Summary 76
5 Case-Study Evidence on Multinational Enterprise
Competitiveness 78
5.1 Introduction 78
5.2 Method 78
5.3 Gerdau 81
5.4 Weg Motores 84
5.5 Madeco 87
5.6 Lucchetti 89
5.7 Intra-Conglomerate Comparison 93
5.8 Summary of Observations 94
5.9 Conclusions 96
6 Innovation Policy and the Competitiveness of Less
Developed Countries 98
6.1 Introduction 98
6.2 Indicators of National Competitiveness 98
6.3 Models of National Competitiveness 99
6.4 Instruments of Innovation Policy 106
6.5 Models of Innovation Policy 111
6.6 Links between Industrial and Innovation Policy 116
6.7 Recommendations for Less Developed Country
Innovation Policy 118
6.8 Brazilian/Chilean Competitiveness and Innovation Policy 121
6.9 Summary 127
7 Fieldwork on Innovation Policy 129
7.1 Introduction 129
7.2 Public Institutions in the Sample 129
7.3 Different Programmes of Innovation Policy in Brazil
and Chile 129
7.4 Implications for Innovation Policy 137
7.5 A Recent Initiative in Brazilian and Chilean
Innovation Policy 140
7.6 Evidence from Fieldwork: The (case of a Brazilian)
Supplier Network Programme (PDP) 142
Contents vii
7.7 Bridging Multinational Enterprise and Policy Strategies 145
7.8 Summary 150
8 Summary, Conclusions, Policy 151
8.1 Introduction 151
8.2 Conclusions and Policy Implications 155
8.3 Recommendations for Further Research 156
Appendix 1: Preliminary List of Brazilian and Chilean
Multinational Enterprises 158
Appendix 2: Summaries of Transcriptions of Case-Study Interviews 161
Appendix 3: Question Guidelines for Interviews with Technology
Institute Representatives 179
Appendix 4: Responses of Technology Institute Representatives 180
Notes 184
Bibliography 197
Index 210
List of Tables
2.1 World’s largest 794 multinational enterprises by
country of origin 25
2.2 Percentage of outward foreign direct investment of
12 major investor countries and regions 26
2.3 Intensity ratios for foreign direct investment of 12 major
countries and regions 27
2.4 Our synthesis of Third World multinational enterprise
multinationalization motives, advantages and host
country locations, based on various theories of the
Third World multinational enterprise 33
2.5 Our comparison of developed country and Third World
multinational enterprise multinationalization characteristics 38
2.6 Main characteristics of foreign direct investment from
Brazil and Chile in the 1990s 42
2.7 Forms of the internationalization process of Latin
American firms 43
3.1 Subsidiaries of Brazilian and Chilean multinational
enterprises 47
3.2 A very broad outlook on fieldwork conclusions on
multinationalization 57
3.3 The characteristics of the multinationalization process in
four case firms 58
5.1 Competitiveness indicators of cases (1998) 80
5.2 Compilation of competitiveness indicators of chosen
Asiaweek 1000 firms (1998) 80
5.3 A summary of case-study firm multinationalization and
innovation profiles 95
6.1 A summary of pro- and anti-high-tech arguments 114
6.2 A summary of the purposes of Brazilian innovation
policy bodies 122
6.3 A summary of the purposes of Chilean innovation
policy bodies 126
7.1 List of selected Brazilian technology institutes 130
7.2 List of selected Chilean technology institutes 131
7.3 A summary of fieldwork conclusions on innovation policy 137
viii
List of Tables ix
A1.1 The main Brazilian and Chilean firms with foreign direct
investment operations according to Chudnovsky
and Lopez (1999) 158
A1.2 The main Brazilian and Chilean firms with foreign
direct investment operations according to
Peres Nunes (1993) 159
A1.3 The main Chilean firms with foreign direct
investment operations based on Calderon and
Griffith-Jones (1995) 159
A1.4 The main Brazilian firms with foreign direct investment
operations according to Wells (1988) 160