Technological strategies of Transnational Corporations affiliates in Brazil

Abstract

This paper presents an analysis of the technological efforts made by Transnational Corporations' (TNCs) affiliates in Brazil. Many studies have indicated that most TNCs concentrate their main technological activities in their home, developed countries. However, empirical investigation has shown TNC affiliates in Brazil have presented a higher profile than local firms in terms of both innovative performance and R&D efforts. This study is an attempt to examine the technological efforts of TNC affiliates in Brazil and their main determinants, considering the recent changes in TNC strategies for global organization of production and technological activities. The study is based on data analysis from 450 firms controlled by foreign capital operating in São Paulo State in 1996. The database was taken from the first PAEP - Pesquisa da Atividade Econômica Paulista -, which comprises not only economic indicators, but also includes an innovation survey based on OECD guidelines. Using multivariate techniques, we have identified distinct strategies of TNCs subsidiaries in regard to technological activities, which reflect different technological effort patterns. In addition, the article reveals that such diversity of technological strategies has been influenced by the size of firms, the industrial sector to which the firm belongs and the nationality of foreign capital, in this order.