Title: Geographical distribution of product development capabilities in the automobile industry: towards a hierarchical division of labour in Mercosur

Authors: Martín Obaya

Addresses: Monash European and EU Centre, Monash University, Monash University Caulfield Campus, 5th Floor, Building H, 900 Dandenong Road, Caulfield East, Australia

Abstract: In the last decade, some carmakers with operations in Mercosur delegated a growing number of product development responsibilities to their subsidiaries operating in Argentina and Brazil. As a result, these subsidiaries were able to accumulate capabilities that allowed them to introduce innovations of increasing complexity into the vehicles manufactured in the region. Empirical evidence suggests that, beyond the differences observed in the strategies adopted by carmakers in Mercosur, the most intense capability accumulation experiences were largely concentrated in subsidiaries located in the Brazilian territory. As a result, a hierarchical division of labour has progressively taken shape within Mercosur favouring the subsidiaries located in this country, at the expense of their Argentinian counterparts. Through the examination of three companies, this article aims to analyse the process of accumulation of product development capabilities in subsidiaries operating in Argentina and Brazil between 1991 and 2011.

Keywords: innovation management; multinational corporations; MNCs; automobile industry; product development capabilities; emerging markets; Mercosur; division of labour; Argentina; Brazil; MNC subsidiaries; automotive manufacturing; vehicle innovations.

DOI: 10.1504/IJATM.2014.060748

International Journal of Automotive Technology and Management, 2014 Vol.14 No.2, pp.102 - 120

Available online: 28 Apr 2014 *

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