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Evaluating The Impact of Foreign Investment: Methodology and the Evidence from Mexico, Colombia, and Brazil

Published online by Cambridge University Press:  24 October 2022

Jerry L. Ingles  and
Loretta Fairchild
Jerry L. Ingles
Affiliation:
Cornell University
Loretta Fairchild
Affiliation:
Nebraska Wesleyan University
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Much of the focus of, indeed much of the impetus for, the current discussion of science and technology policy for the Latin American industrial sector has involved comparisons of foreign and domestic ownership. While such traditional concerns as the quantity of repatriated profits and interference in domestic politics (in the case of foreign firms) continue to be important, much of the recent literature is on comparative financial performance, growth, technology, and the interrelationships among these elements. The following conclusion is ubiquitous: Domestic enterprises, due largely to “technological” shortcomings, are simply unable to compete with the foreign firms and are therefore restricted both to secondary positions within individual product markets and to the less profitable sectors.

Type
Research Article
Information
Latin American Research Review , Volume 12 , Issue 3 , 1977 , pp. 57 - 70
Copyright
Copyright © 1977 by the University of Texas Press

Footnotes

*

Data collection and analysis for this article were done as part of the Comparative International Science Policy Project under the auspices of the Program on Policy for Science and Technology in Developing Nations, Cornell University.

References

Notes

1. “Multinational Corporations in Brazil and Mexico: Structural Sources of Economic and Noneconomic Power,” August 1975.

2. Las Empresas Transnacionales: Expansion a Nivel Mundial y Proyección en la Industria Mexicana, versión preliminar (México: CONACYT- CIDE, 1975).

3. E.g., for México, Bernardo Sepulveda and Antonio Chumacero, La Inversión Extranjera en México (México: Fondo de Cultura Económica, 1973).

4. Las Empresas, p. 352. The authors also note that (our translation), “The MNCs which could be called ‘modern’ are compared with the aggregate of the national firms which include both the modern and traditional. Had the small national firm been excluded the resulting differences would obviously have been smaller,” p. 344. Thus the authors agree that size is a crucial determinant of firm characteristics. Despite this observation, Fajnzylber and Martinez argue that this bias is counterbalanced by under-representation of the MNCs and do not proceed to account for the influence of size.

5. Jerry Ingles, “Firm Size Duality and Industry Characteristics in Venezuela,” unpublished (PPSTDN, Cornell, 1976).

6. United States Joint Ventures and National Manufacturing Firms in Monterrey, Mexico: Comparative Styles of Management (Ithaca: Cornell Latin American Studies Program, Dissertation Series, 1972).

7. I.e., when the quantities of repatriation permitted by law are, in fact, less than what otherwise would be transferred.