Title: MNC technological upgrading in emerging regional areas: a case study on automotive subsidiaries in MERCOSUR

Authors: Martín Obaya; Paul Kalfadellis; Natalie Doyle

Addresses: National Scientific and Technical Research Council (CONICET)/Research Center for Transformation (CENIT)/National University of San Martín (UNSAM), Avenida Callao 353 – Piso 3º "B", (1022) Ciudad Autónoma de Buenos Aires, Argentina ' Faculty of Business and Economics, Monash University, 900 Dandenong Road, Caulfield East, Victoria 3145, Australia ' Faculty of Arts, Monash University, Scenic Blvd. & Wellington Road, Menzies Building, Clayton Campus, Clayton VIC 3800, Australia

Abstract: Technological upgrading dynamics in subsidiaries operating in emerging regions remain an under researched topic. This study aims to examine the role of headquarters and subsidiaries in the upgrading process of subsidiaries in regional agreements among emerging countries. It also examines how the multi-level normative frame regulating such agreements affects the accumulation of technological capabilities. A single case study has been designed to examine the process of upgrading of automotive subsidiaries operating in MERCOSUR, covering the period 1991 and 2012. Among the main findings, the study concludes that the decision to promote technological upgrading in subsidiaries in emerging regions remains at the level of headquarters during the early stages of the learning process. Only when subsidiaries go beyond a capability threshold, they are able to gain autonomy to make autonomous learning initiatives. Furthermore, it was found that the functionally-integrated network organised by the headquarters within the MERCOSUR region adopted a highly hierarchical structure lead by the Brazilian unit, which truncated the learning process of the Argentinean subsidiary. The intra-firm hierarchies were accentuated by the characteristics of the MERCOSUR normative framework that did not included provisions to counterbalance growing asymmetries within the region.

Keywords: multinational companies; subsidiaries; technological capabilities; MERCOSUR; innovation; technological learning; subsidiary development.

DOI: 10.1504/IJTLID.2018.093724

International Journal of Technological Learning, Innovation and Development, 2018 Vol.10 No.3/4, pp.295 - 321

Received: 27 Sep 2017
Accepted: 02 Apr 2018

Published online: 01 Aug 2018 *

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