Internationalization of Technological Activities and Transnational Corporation from Developing Countries: A Comparative Analysis of Asia and Latin America Based on Patent Data

Thursday, 2 July 2015: 10:15 AM-11:45 AM
CLM.3.04 (Clement House)
Pedro Miranda, Institute for Applied Economic Research - IPEA, Rio de Janeiro, Brazil
In the last decades of the 20th century, the transformations in the international macroeconomic landscape and the increased competition at a global scale were joined by new strategies implemented by major corporations to maintain and strengthen their competitive advantages, including organizational change. In the manufacturing sector, it resulted in the creation of international production networks with a high geographical dispersion of their activities, where some developing countries were integrated, mostly from Asia.

Such changes, however, were not limited to production activities. In the 1990s, the internationalization of technological activities was intensified, achieving an increased geographic dispersion and encompassing activities of higher complexity. The foreign subsidiaries of transnational corporations (TNCs) not only did transfer technologies originated by their parent companies, but also began themselves to create new capabilities by virtue of the absorption of local knowledge. This process still remains extremely concentrated in the region formed by the triad United States–Western Europe–Japan, especially in the field of research. However, in the 2000s, some developing countries emerged in this scenario.

This article aims at moving forward in the debate regarding the profile of insertion of TNCs coming from developing countries (DCs) in such a process. The question touches on the operation of those TNCs: is this recent surge in their internationalization going beyond production activities, and encompassing technological activities as well? Do Asian and Latin American DCs present distinct insertion profiles?

The characterization of the insertion profile of each country was carried out by drawing a comparison between the importance of international activities in each technology domain and the pattern of national technological specialization, determined by revealed technological advantage index. The analysis was based on data of patents filed at the European Patent Office, in the period ranging from 1980 to 2012. The analyzed sample encompasses activities performed in all technological domains, by companies from 43 countries, including developing countries from Asian and Latin America and developed countries.

The results point to the existence of an asymmetry, with a prominent position occupied by Asian countries, especially South Korea and Taiwan. The differences found in the magnitude, importance and the type of activity, which indicates that the internationalization process of technological activities is a process determined by the interaction between the strategies adopted by the TNCs and national development policies.