MNCs Strategic Response to Sub Regional Institutions: Evidence from the Mexican Aerospace Industry
The paper examines how actors engage in the process of institutional building in the aerospace industry in Mexico. Over the last decade, Mexico has increased its role in the global aerospace industry. FDI has increased significantly, namely from 250 million US $ in 2004 to 1.1 billion in 2014, while employment has surged from 13,000 in 2004 to 45,000 in 2014. The industry is concentrated in five regions and our focus is on Querétaro which is known for having the most dynamic cluster in the country. In 2015, we conducted interviews (n=30) with government officials, innovation and training center representatives, trade union officials and managers of MNCs in this fast growing industry.
Drawing on this material, the paper seeks to understand from ‘below’, the process of institutional building in the aerospace in Querétaro. We highlight the strategic responses of MNCs and their role in the process of institutional building. We also identify the institutional blockages that seem to lock actors into the Mexican form of economic strategy which tends to rest on low wages and flexible workplaces as a basis of international comparative advantage.