Transnational Corporations,Industrial Policy and the ‘War of Incentives’: The Case of the Argentine Automobile Industry

In the context of intensified internationalization of production, automobile firms in Argentina face a profoundly different structure of incentives to the prior decades of import substitution industrialization. Recent policies in the Argentine auto industry have been aimed at a recovery through a reorientation towards exports. Two initiatives set the context for changes during the 1990s: an industry–government–labour agreement and the implementation of a commercial partnership with Brazil. The dramatic recovery of the sector is an apparent validation of the policies implemented. This article questions this recovery by drawing on case‐study work at a number of auto plants and components suppliers. The effects of these policies on changes in the structure of production and industry and on externalities supporting domestic firms are examined. Lessons are drawn for the role of government policy in supporting the contribution of transnational corporations to domestic technological and organizational development.     

Agglomeration,foreign firms and firm exit in regions under transition: the increasing importance of related variety in Hungary

ABSTRACT

Related variety of economic activities is widely recognized to induce regional development; however, it is not clear how this mechanism takes place in regions that go through major structural and institutional transformation. Furthermore, foreign direct investment (FDI) is typically a major source of structural change in these areas; and we still need a better understanding on how foreign-owned (foreign) firms affect the dynamics of domestic-owned (domestic) companies. For these reasons we analyse firm-level exit in Hungarian city regions between 1996 and 2011, over the late post-socialist transition in manufacturing industries, focusing on the difference between foreign and domestic firms. Introducing ownership into the related variety calculation, we estimate the probability of firm exit with the region-level related variety calculated separately for foreign and domestic firms. Our results suggest that related variety of foreign firms decreases the probability of domestic firm exit earlier during the economic transition compared to the related variety of domestic firms. This finding supports the idea that FDI plays a formative role in regions under transition, and shows that domestic firms benefit from being in agglomerations where foreign firms are technologically related to each other.     

Internationalization intensity of clusters and their impact on firm internationalization: the case of Poland

Existing and dominant perspectives on determinants of firm internationalization have focused on the firm-specific and country-specific factors, paying less attention to the question ‘if and how can clusters foster internationalization of cluster firms’. To investigate this issue, we conducted the study focused on the Polish clusters. First, we conceptualize the impact of clusters on the internationalization of cluster firms by introducing the concepts of the propensity of internationalization and intensity of internationalization. Second, we assess the internationalization intensity of clusters in Poland and check how cluster managers facilitated the internationalization of cluster firms. The results obtained show that clusters play an important role in neutralizing the liability of foreignness suffered by cluster entities. The findings confirm that the need of internationalization which is related to the internationalization propensity emerges over the time as a cluster matures and internationalization intensity is higher in case of more dense clusters. By combining meso- and microeconomic perspectives, this study offers a more holistic approach for studying internationalization processes.     

Globalization,Recession and the Internationalization of Industrial Districts: Experiences from the Italian Gold Jewellery Industry

Abstract

Globalization and the recent recession crisis are significantly challenging Italian industrial districts (IDs), leading to deep transformations in their internationalization, innovation and organization strategies. With our empirical focus on a single industry (gold jewellery) and a specific country (Italy) and through the theoretical lenses of the global value chain (GVC) approach, the evidence in this article sheds light on the differences in how three IDs within Italy's gold jewellery sector (Valenza Po, Arezzo and Vicenza) compete in the global arena. Our comparative analysis reveals striking differences among these districts with regard to their upstream and downstream internationalization strategies in response to two industry shocks: increasing global competition in the early 2000s and the world economic recession of 2008–2009. Our explanation for the varied gold jewellery district responses to these two global crises involves both internal and external factors: (1) structural differences between the three IDs; (2) distinct business strategies; and (3) how these districts are linked to the gold jewellery GVC.     

Gender,Contracts and Wage Work: Agricultural Restructuring in Brazil's São Francisco Valley

Brazil?s São Francisco Valley provides an example of the ways in which agro-food firms are attempting to mobilize and control labour as they expand production of fruits and vegetables for domestic and global markets. In crops where cost reduction is a primary concern, firms choose highly ‘flexible’ forms of labour mobilization, drawing on the casual labour of migrants from the Brazilian Northeast. In crops where the quality and timing of produce are of great importance, firms use either subcontracting arrangements that mobilize family labour, or the labour of local women and children. In this way, firms involved in the production of fruits and vegetables show many similarities to their counterparts in certain branches of industry: they are actively experimenting with labour arrangements that tap the most vulnerable segments of the international workforce, and that appropriate unpaid family labour.     

A stage and eclectic approach to industrial district development: two policy keys for ‘survival’ clusters in developing countries

This article analyses the history of Italian industrial districts (IDs) to identify lessons to help small and medium‐sized enterprise (SME) clusters in developing countries to move to higher stages of development. Transforming the 1990 seminal work of Brusco on distinct models of SME clustering into a stage approach, this article identifies a sequence of different maturity stages which the IDs passed through: initial craft production; industrialization through large firms; the fragmentation of production followed by the growth of smaller specialized units; and, finally, new routes to innovation and competitiveness. These phases help explain how development is a stage process which needs to be carefully considered and not rushed, through attempting to cross too many stages at once. Realistic steps are always necessary to create an effective base for growth. Furthermore, a theoretical framework is presented, which identifies three factorial levels that have intervened in the ID development process over the past 50 years. Economic, policy and social factors are identified and presented as drivers that work together to produce the structural changes that explain an effective development process. The final section emphasizes the relevance that this kind of analysis can have on the policy‐making schemes being applied in developing countries, with special reference to less developed types of clusters.     

IMMIGRATION AND FIRM EXPANSION*

ABSTRACT Research generally focuses on how immigration affects native workers, while the impact of immigration on domestic firms is often overlooked. This paper addresses this important omission by examining whether firms respond to immigration by expanding their production activities within a city in order to utilize the abundant supply of low‐skilled workers. Using data on immigration and the universe of establishments in U.S. cities, the results indicate that firms respond to immigration at the extensive margin by increasing the number of establishments. Not surprisingly, immigration has a more positive impact on the number of establishments that are small in size and in relatively mobile, low‐skill intensive industries. Additional evidence indicates that immigration has little impact on employment within existing establishments, the intensive margin, or on the number of establishments in service industries which may expand simply due to immigrant consumption.     

A River is a River-Cross-Border Networking Between Baden and Alsace

Using the concepts of national and regional innovation systems as an analytical framework for analysing the cross-border networking activities between Baden and Alsace, the empirical analysis presented in this paper reveals that despite the political promotion of cross-border relations the reality in innovation networking looks different. In the industry sample used for empirical analysis, no firm in Baden had research contacts with an Alsatian research institute, while at least 7% of the Alsatian firms cooperated with research and transfer institutes in Baden. Although spatial distance does not matter, cultural and institutional distance does. The neighbouring region is not looked at as a significant knowledge source for firms in both regions. Despite technological and economic internationalization, for many firms innovation-relevant learning still takes place mainly within their own national and regional system of innovation. For the two regions under review, the Rhine is still a cultural and institutional barrier which needs more networking bridges to be crossed.     

Does Spatial Clustering of Foreign Direct Investment Foster Global Production Networks? The Case of Qingdao,China

This article examines how spatial clustering of foreign direct investment (FDI) can foster a global production network (GPN). The cluster concept, in general, stressed inter-firm relations between local and regional firms while neglecting global–local linkages in the spatial context. In contrast, GPN focuses on the advantages of international production organization and governance structure but underestimates regional or localized channels of production arrangement. By integrating the conceptual framework of spatial clustering of FDI and GPN, this paper provides empirical evidence of various channels to knowledge and innovation transfer between domestic firms and foreign-invested enterprises. This paper demonstrates that the different types of linkages formation are key determinant factors for establishing cluster through contributing to local economic development.     

EXPORT PERFORMANCE AND EXPORT POTENTIALS: WESTERN CANADIAN EXPORTS OF MANUFACTURED END PRODUCTS

This paper analyses the export performance and export potentials of end products manufactured in western Canada. Exports are explicitly interpreted as part of the (progressive) internationalization of firms. A sample of manufacturing firms is classified according to a five-stage model of the internationalization of firms on the basis of variations in marketing and technological strategy. It is suggested that improvements in export performance would be facilitated by export stimulation programs that are sensitive to the varying resources and to constraints of firms in different stages of internationalization. More generally, export promotion should be seen as part of the problem of stimulating the growth of firms.
Cette communication analyse la situation actuelle et potentielle des exportations de produits fabriqués dans I'ouest canadien. On considère catégoriquement que les exportations font parti de I'internationalisation (progressive) des fabricants. Un échantillon de ces derniers est classifié selon un modèle, à cinq étapes, de I'internationalisation de ces socieétés, basé sur les variations dans leurs stratégies techniques et commerciales. II est sug-géré que les taux des exportations pourrait ětre améliorer par des programmes visant a les stimuler, en autant que ces efforts tiennent compte du bilan des ressources et des contraintes des sociétés, durant les différentes étapes de leur internationalisation. En général il ne devraitpas avoir de distinctions entre les efforts visant à stimuler les exportations et ceux qui encouragent la croissance des sociétés fabricantes.     

Regulating Investment Abroad: The Political Economy of the Regionalization of Singaporean Firms

This paper attempts to understand the regionalization of national firms from Singapore within the methodological construct of the regulationist perspective. It aims to demonstrate the usefulness of some concepts in the regulationist perspective for explaining restructuring processes in developing countries, and to evaluate critically the role of some of these concepts—such as regimes of accumulation and modes of social regulation—in illuminating the internationalization of capital through transnational corporations and their associated foreign direct investment. In particular, the paper argues that Singapore's export-led regime of accumulation manifests inherent contradictions in its dependence on foreign capital, the domination of the domestic economy by state-owned enterprises, and the relative underdevelopment of indigenous entrepreneurship. While this accumulation process was embedded in an earlier set of social and institutional mechanisms, its contradictions and tensions were not appropriately regulated and contained. When Singapore experienced two major external economic crises in the mid-1970s and 1985, these shocks and their internal tensions triggered a continuous process of economic restructuring regulated by a distinct combination of social and institutional mechanisms, or "fixes." One such institutional fix in recent years has been the promotion of the regionalization of Singaporean firms through the social regulation of local labor markets and the state-led establishment of institutions to facilitate the regionalization drive.     

TRAFFIC CONGESTION,POLYCENTRICITY, AND INTRAURBAN FIRM LOCATION CHOICES: A NESTED LOGIT MODEL FOR THE LOS ANGELES METROPOLITAN AREA

This study empirically investigates traffic congestion effects on agglomeration through the lens of firm location decisions. A discrete choice model is applied to examine new establishments’ location choices within the Los Angeles metropolitan area. Employment centers are defined as the choice set to explore the nature and role of intraurban agglomerations. The results show that metro‐wide congestion negatively affects the location choices of firms in the high‐order office‐related activities, while local congestion have positive impacts on those firms’ location decisions. In contrast, firms in production‐related activities are positively influenced by regional congestion but are negatively affected by local congestion levels.     

Fostering place-based innovation and internationalization – the new turn in German technology policy

Since the mid-1990s German technology policy has experienced a paradigmatic shift from standard grant schemes towards a region-oriented and competition-based R&D policy. Currently, a new policy experiment, the InterClust contest, is under way, trying to simultaneously foster place-based innovation, R&D internationalization and the internationalization of innovative places. The current paper analyses the new policy, relating it to the recent literatures on heterogeneous firms and on cluster-life cycles, and presents results from a firm survey performed in 21 winner regions of InterClust. Findings show that the new funding scheme takes insights from recent theoretical developments into account and addresses important impediments to firm and cluster internationalization. Although it is too early for an overall assessment, it is argued that the long-term impact will critically depend on the inflow of heterogeneous knowledge and the strength of intra-regional mobilization effects.     

产业联系与外资溢出效应-对浙江省制造业的实证研究

本文探讨水平联系、前向联系和后向联系对外商直接投资溢出效应的影响。利用浙江省制造业数据,通过实证分析发现,浙江省制造业外资总体上具有水平负向溢出效应,同时通过后向联系产生正向溢出效应。水平负向溢出效应主要是外资企业带来的激烈竞争所导致的,产业后向联系产生的正向溢出效应主要通过外资企业的本地采购发生。浙江省内资制造业企业并没有从购买外资企业中间投入品而显著提升效率。     

Do industrial districts influence export performance and export intensity? Evidence for Spanish SMEs' internationalization process

This paper seeks to enhance the understanding of the role of the industrial districts in the internationalization process of small and medium-sized enterprises (SMEs). The study focuses essentially upon the following issue: Can the location inside industrial districts influence the export performance and export intensity of the Spanish SMEs? To address this question, this study draws upon a sample of 285 manufacturing firms located in the Valencian community (a Spanish region) surveyed during the period January 2000 to March 2000. It is shown that industrial district location, marketing differentiation, institutional networks, clients' networks, competitors' networks and global orientation of sector and company have a clear influence on firms export performance and export intensity. The results are basically consistent with the limited previous research.     

Foreign-owned Firms' Campaign Contributions in the United States: An Exploratory Study

This study extends previous empirical work on corporate political activity by examining which foreign-owned firms provide campaign contributions to United States legislators. While numerous studies have examined which domestic firms make campaign contributions, little is known about the propensity of foreign-owned firms to make contributions. Using logit and Tobit analyses, the findings suggest that firm size, legislative issues, foreign ownership, and cultural characteristics are important determinants of a foreign-owned firm's political strategy. The findings also suggest that there are strong parallels between the political strategies of foreign-owned firms and domestic firms.     

Can Host Innovation Systems in Late Industrializing Countries Benefit from the Presence of Transnational Corporations? Insights from Thailand's Manufacturing Industry

Innovation systems in late industrializing countries are said to be ill-developed and fragmented, lacking crucial key resources and access to technology and knowledge. At the same time these national innovation systems (NISs) host subsidiaries of transnational corporations, which could contribute to the development of the NIS due to their advanced technology and capabilities. This paper considers data from innovation surveys, self-assessment of technological capabilities and qualitative interview information in order to establish two things: firstly, the technological activities and capabilities of foreign affiliates and domestic firms in Thailand (as compared to Singapore, Penang and Europe), and secondly, the main mechanisms by which foreign affiliates foster upgrading in domestic firms and in the innovation systems themselves.     

Global Value Chains and Open Networks: The Case of Italian Industrial Districts

Italian district small and medium enterprises (SMEs) developed aggressive strategies to extend their sales networks and supply chains abroad. Literature on districts offered alternative explanations about the impacts of internationalization on local manufacturing systems. The authors consider the evolution of Italian districts in the framework of global value chain approach, focusing on the role of leading firms. Based on a survey of 650 Italian SMEs and financial indicators, the paper describes the rise of a new district firm model, the open network, which becomes a key node of global value chains. The paper also analyses the relationships among internationalization, innovation strategies and performance of SMEs.     

Global Markets, Local Home-working: Governance and Inter-firm Relationships in the Balinese Clothing Industry

Abstract: Within the industrialization process of the Indonesian economy, the manufacture of clothing has played a significant role. Besides Java, Bali has the second highest agglomeration of industrial activities within this sector. However, in contrast to Javanese clothing firms, which have a strong emphasis on Western-styled clothing, Balinese clothing firms focus on the manufacture of Batik and embroidery products. Based on the commodity chain debate, I will show in this paper how Balinese clothing industry is organized into and governed within the global and local economy. This aims in particular to unravel how these types of garments (Batik and embroidery) can shape and reshape buyer relations. The analysis will also include a discussion of aspects, such as product development and raw material procurement. Furthermore, since Balinese clothing companies organize their production activities within extensive networks of rural home industries, the driving forces behind these specific network co-ordinations will be explored.     

Hypermobility and the governance of global production networks: The case of the Canadian cycle industry and its links with China and Taiwan

Western firms engaged in mass retailing and in product assembly make frequent changes to their global production networks (GPNs). Indeed, some GPNs show a tendency to hypermobility, which we define as a rapid switching of economic links among manufacturers, importers, and retailers. This theme is explored in the context of the Canadian bicycle industry where domestic production collapsed between 1980 and 2008, following a century of remarkable stability. After a period of flux when Taiwan was the key player, China has emerged as the dominant original equipment manufacturer (OEM) of bicycles sold in Canada, with big‐box stores accounting for the great majority of sales. We connect this increasing fluidity in supply arrangements and in the global organization of the industry with the governance of these GPNs. Several aspects of governance are considered, including the Sloanist practices of the largest Canadian retailers, and the activist role of the Chinese state in directing regional patterns of manufacturing in China.