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A Latin American global player goes to Asia: Embraer in China
Abstract
Brazilian aircraft manufacturer Embraer has transformed itself since privatisation in 1992 to become a world market leader in a high-tech industry traditionally dominated by companies based in OECD countries. In recent years Embraer has also become an aggressive foreign investor - in particular by launching a joint venture in China in 2002. This paper analyses the record so far, considering the Chinese authorities' drive to build its own aerospace industry, the partners' different expectations, and the 'transplantability' of corporate success in a different business and political environment.
... and exported over $4 billion (embraer.com). It competes head to head with first world companies (Bombardier), exports 95 percent of its production, leads Brazil in manufactured exports, and leads the world market for unit sales of regional aircraft (Goldstein, 2008, p. 58 ...
... what saved the firm in the mid 1990s, and catapulted in on to a trajectory of long term growth, was the coincidental emergence of a rapidly growing market for regional jets (70-100 seat) in the United States. Since 1996, Embraer has shipped more than 1,000 aircraft to 20 countries (Goldstein, 2008, p. 58). However, to be in a position to fill this new demand depended on several decades of prior institutional development after the firm's founding in 1969. ...
... Second, Embraer could draw on skilled personnel from the nearby Instituto Tecnológico da Aeronáutica (ITA) and Centro Técnico da Aeronáutica (CTA). In fact, the training of aeronautical engineers by ITA preceded the establishment of Embraer, and Embraer could also count on ITA later for collaboration in research and development (Goldstein, 2008, p. 59). This protection and assistance meant that Embraer could survive for many years on continued subsidies. ...
The record of successful developmental states in East Asia and the partial successes of developmental states in Latin America suggest several common preconditions for effective state intervention including a Weberian bureaucracy, monitoring of implementation, reciprocity (subsidies in exchange for performance), and collaborative relations between government and business. Although Brazil failed to develop the high technology manufacturing industry and exports that have fueled sustained growth in East Asia, its developmental state had a number of important, and often neglected, successes, especially in steel, automobiles, mining, ethanol, and aircraft manufacturing. Where Brazil's developmental state was less successful was in promoting sectors like information technology and nuclear energy, as well as overall social and regional equality. In addition, some isolated initiatives by state governments were also effective in promoting particular local segments of industry and agriculture. Comparisons with East Asia, highlight the central role of state enterprises in Brazil that in effect internalized monitoring and reciprocity and bypassed collaboration between business and government (that was overall rarer in Brazil).
... After the privatisation in 1994, Embraer continued diversification into the regional jet market with ERJ series in 1995 and E-Jet series in 2002, hence directly competing with Bombardier's CRJ series (Hira and de Oliveira, 2007). Embraer aggressively continued its international expansion by entering a joint venture with Chinese COMAC to create Harbin Aircraft Manufacturing Corporation in 2002 (Goldstein, 2008) and by forming a consortium with EADS (parent company to Airbus) to acquire a majority in Portugal's aircraft parts manufacturer and maintenance services provider OGMA in 2005 (Goldstein and Godinho, 2010). ...
... As Bombardier (2012: 45) reports, Indian government has introduced "financial incentives for operating aircraft with fewer than 80 seats [that] include waived landing fees and lower jet fuel taxes, which encourages the operation of regional aircraft". Increased engagement in India would present another strategic response to Embraer's manufacturing joint venture in China (Goldstein, 2008). Additionally, it would improve the relative position with regard to India's business aircraft segment, which has been gaining in relative importance given that India's population of High Net Worth Individuals (HNWI) entered the Top 12 (CG, 2011), with further upward trend. ...
... However, with specific regard to prime contractors and other OEMs in civil aircraft manufacturing, the shift in global markets might equally have led to a shift of motives for strategic cooperation. For example, technology-related motives seem to have been subordinate to market access attempts in the cases of Airbus in China (Leixnering, 2005), Bombardier in Mexico (Hernandez Chavarria, 2011), or Embraer in China and Portugal (Goldstein, 2008;Goldstein and Godinho, 2010). ...
In terms of their aircraft manufacturing industries, Canada and India are more different from each other than any other possible pair consisting of a developed and an emerging economy. Canada is one of the World's leading aircraft suppliers, yet its position is jeopardised by previous Brazilian and on-going Russian, Chinese, and Japanese entry. To the opposite, India is expected to become the market with highest demand for new aircraft. At the same time, India is lagging behind in establishing its national aircraft manufacturing. Large scale cooperation between Canada and India would allow the former to gain access to a key market, without necessarily raising another competitor. Through cooperation with industry's main players from Canada, India could significantly improve its relative position in design, supply of components, and MRO (maintenance, repair, and overhaul). Given anticipated favourable outcomes for either country, virtually non-existent Indo-Canadian trade and cooperation within the sector are puzzling. Our findings attribute missing Canadian commitment to the Indian market to the innovation paradigm in the industry. Aircraft manufacturing is a closed system industry with proprietary product architectures, and subject to strict safety and legal regulations. The industry hence tends to incremental rather than radical innovation, and follows technology-availability push rather than market-demand pull approach to innovation. The innovation paradigm in aircraft manufacturing is most appropriately characterised as hierarchical; in this hierarchy, the way to the market leads for any innovation ultimately via a prime contractor, thus inducing hierarchical cooperation along the whole value chain. This is detrimental to taping into Indian market, which is growing in demand, yet constrained by infrastructural and income gaps. Indian domestic aviation requires aircraft with unique set of characteristics, hence radical rather than industry's usual incremental innovation. Negligible involvement of Indian suppliers into value chains of Canadian OEMs is attributable to a set of factors such as general market gravity; lack of bilateral agreements regarding free trade, intellectual property, and aviation safety; lack of Indian AS9100 certified suppliers capable of delivering higher-value inputs; and despite usual claims to the contrary, actual shortage - and not abundance - of qualified labour on Indian side. As Canadian leading prime contractor, Bombardier plays a key role in either direction. Current focus on integration of Mexican suppliers seems not to allow the company to stretch its global value chain to India. Given its simultaneous strategic focus on C-Series program, Bombardier equally appears to be lacking resources and determination to lead the Canadian aircraft manufacturing industry to India.
... structures have a preference for functional 3PLs. Corbin (2009) analyzed the practices of pharmaceutical wholesalers in Puerto ...
... In Gutierrez et al. (2007) characteristics of Colombian company's transportation management systems were presented followed by the characterization of nine software products that were available in the country. Gutierrez and Jaramillo (2009) evaluated the way in which available software meets critical inventory management functions such as demand management, inventory location in the supply chain, and measuring supplier performance. Kang et al. (2008) presented mathematical models that optimize transportation resources used for the operation of container terminals, which are then implemented and examined with data from the Port of Balboa, Panama. ...
... The proposed model identified the factors and information that allow the detection of the value created by the different parties involved, how to promote collaboration, and how to share experience. Zuniga-Arias et al. (2009) presented an explorative framework for disentangling the interactions among different managerial activities that have an effect on quality variability in the mango supply chain in Costa Rica. They used production technologies, agro-ecological conditions, management intensity, quality control, contracting practices, and marketing operations data to understand the impact of technological and socio-economic factors on heterogeneity in quality performance at different stages of the supply chain. ...
This article presents a review of the supply chain management literature focusing on Latin America and is based on articles written in English and Spanish. We characterize the literature in terms of topics addressed, results obtained, methodologies used, and analyze areas of congruence and provide directions for further research. The results suggest that supply chain challenges in Latin America are numerous and complex. Furthermore, there is evidence that the supply chains of many companies in the region have internal vulnerabilities that might hinder their efforts to participate in the global markets. Challenges include lack of economic integration, political risks, social concerns, geographical obstacles, inadequate infrastructure, inefficient logistical networks, and poor supplier relationships. This review demonstrates the need for continued development and extension of the supply chain management body of knowledge in the region and serves as a foundation for future research efforts in Latin America.
... Between 2005 and 2012, a period of economic growth happened, as can be observed in the research of Hall et al. [2011], Marx and Mello [2014], and Cruz and Rolim [2010] in the automotive industry and agriculture. Costa [2012] points the development growths in the mineral industry; Porto et al. [2010] in oil and gas; Goldstein [2008], Goldstein andGodinho [2010], andMaculan [2013] in the case of the aircraft industry; and Barbalho et al. [2009;2019b] in the high-technology sector. This development engine was¯nished, and from 2013 until now, the Brazilian economy de-accelerated [Colombo et al. (2019)]. ...
... Between 2005 and 2012, a period of economic growth happened, as can be observed in the research of Hall et al. [2011], Marx and Mello [2014], and Cruz and Rolim [2010] in the automotive industry and agriculture. Costa [2012] points the development growths in the mineral industry; Porto et al. [2010] in oil and gas; Goldstein [2008], Goldstein andGodinho [2010], andMaculan [2013] in the case of the aircraft industry; and Barbalho et al. [2009;2019b] in the high-technology sector. This development engine was¯nished, and from 2013 until now, the Brazilian economy de-accelerated [Colombo et al. (2019)]. ...
This study presents a proposal to improve public policies for supporting innovation in Brazil’s automotive industry by using a conceptual model with incremental benefits based on nudge concepts. This new model aims to reduce the complexity of the current fiscal mechanism. It makes the tax incentive mechanism more dynamic and stimulates innovative companies to improve their innovative performance. For this, a qualitative comparative analysis of the effects (empirical and simulated) of a public innovation policy — an automotive policy called Inovar-Auto — compares a consolidated traditional tax incentive mechanism with the new model. It is concluded that the incremental scale of benefits stimulates the companies-government interaction more safely and effectively, reducing the complexity of the current tax incentive mechanism and offering new paths and choice possibilities. This study contributes to the literature by presenting an innovative tax incentive mechanism, a “nudge” for changing companies’ behavior, which can be applied in other countries.
... Thus we have a paradox: a weak system with a strong company. The question that naturally arises is how a firm in a typical high-tech sector can be globally competitive without these structural conditions, which in principle would appear to be a sine qua non (Fundação Museu de Tecnologia de São Paulo, 2009;, Forjaz, 2005Silva, 1998;Goldstein, 2002Goldstein, , 2008Goldstein & Godinho, 2010). ...
... Thus we have a paradox: a weak system with a strong company. The question that naturally arises is how a firm in a typical high-tech sector can be globally competitive without these structural conditions, which in principle would appear to be a sine qua non (Fundação Museu de Tecnologia de São Paulo, 2009;, Forjaz, 2005Silva, 1998;Goldstein, 2002Goldstein, , 2008Goldstein & Godinho, 2010). ...
This article discusses whether a globally competitive high-tech firm is sustainable without being associated with a sufficiently dense sectoral innovation system. It focuses on Embraer and hence on the Brazilian aeronautics industry. Despite not benefiting from a highly subsidized process for technological and financial modernization, Embraer has become the world's third-ranking producer of commercial jets thanks to institutional innovations, especially in producing and managing contracts with suppliers and risk-sharing partners. The conclusion drawn is that the competitiveness of the Brazilian aircraft industry depends on the continuing supply of technology in international markets. Technological restrictions imposed for geopolitical reasons, or even for market constraints, could fatally undermine the strategy adopted by the company. © Universidad Alberto Hurtado, Facultad de Economía y Negocios.
... First, the literature argues that further research is needed on the characteristics, challenges, and strategies that result in the success or failure of supply chains in emerging economies (Sacomano Neto and Pires, 2007;Cerra et al., 2008). Brazil is recognized as a leading emerging country that has recently been achieving significant economic success (Brainard and Martinez-Diaz, 2009;Aman, 2011;Goldstein, 2008). Second, some researchers have called for further research on natural resource-based supply chains in Latin America (e.g., Altenburg and Meyer-Stamer, 1999). ...
... First, the literature argues that further research is needed on the characteristics, challenges, and strategies that result in the success or failure of supply chains in emerging economies (Sacomano Neto and Pires, 2007;Cerra et al., 2008). Brazil is recognized as a leading emerging country that has recently been achieving significant economic success (Brainard and Martinez-Diaz, 2009;Aman, 2011;Goldstein, 2008). Second, some researchers have called for further research on natural resource-based supply chains in Latin America (e.g., Altenburg and Meyer-Stamer, 1999). ...
Although research on supply chain management has made many valuable contributions, there is a dearth of empirical evidence and theoretical reflection on the characteristics of supply chains that operate mainly in developing and emerging economies. The aim of this paper is to help to fill this gap by exploring how supply chain sustainability can be implemented and managed in these settings. An in-depth case study of the upstream oil and gas industry supply chain in Brazil was used to develop propositions about supply chains that operate in developing settings. Drawing from institutional theory, evolutionary theory, complexity theory, and from the organizational learning, innovation, and strategy literatures, this paper offers four key findings and contributions to the supply chain literature. First, it shows that becoming a sustainable supply chain is not a destination, but a journey, where trajectory and time matter. Given the evolutionary nature of supply chain sustainability trajectories, this paper highlights that supply chains learn and evolve just as organizations do. Second, this research indicates that, although globalization is a trend, natural resource-based supply chains are often more geographically bounded and susceptible to local social demands than other supply chains. Third, this paper extends the supply chain literature by arguing that supply chains face additional barriers to sustainability in developing and emerging economies, which contribute to a higher degree of complexity and uncertainty due to the existence of highly turbulent business environments and institutional voids. These factors in turn hinder supply chain learning and innovation, and reduce the slope of supply chains sustainability trajectories. Finally, this research contributes to the literature by claiming that, due to the highly complex and uncertain business environments, in these settings focal companies play an even more important role in managing the escalating ambiguity, stimulating supply chain learning, and promoting innovation towards supply chains enhanced sustainability performance.
... That is, the main Brazilian multinationals demonstrate themselves willing to take a leap and overcome cultural and geographic barriers, in addition to problems related to legal security, seeking the chance to be become more competitive. This does not imply, however, that this has been an easy task, as evidenced by the problematic experiences of Marcopolo (Rosa, 2006) and of Embraer (Goldstein, 2008) in China. ...
The recent wave of internationalization among Brazilian companies differs from past experiences, in terms of volume, reach and quality. Unlike what is suggested by recurrent explanations about the gradual expansion of multinationals from emerging countries, the first steps of Brazilian multinationals were not entirely directed towards South America, in a search for regional dominance. In amount of investment and number of subsidiaries there are signs they prefer activities in advanced markets – mainly Europe and North America – where they compete on an equal footing with major conglomerates and can have access to cutting-edge technology. Some Brazilian companies have previous internationalization experience, and a significant portion had been prepared and initiated outward growth in the 1990s, after the economy opened up. However, the boom of internationalization that began in 2004 took place in such unusual conditions as to deserve highlight and special analysis. This article discusses the recent expansion of Brazilian multinationals pointing out: (i) that the companies have as a strategic goal the more advanced economies; (ii) how the transformation of the Brazilian productive structure led to the emergence of a group of companies seeking internationalization as a competitive strategy; (iii) the new Brazilian state activism, especially in financing and the implementation of industrial policies which support the creation of large national groups with a presence in the globalized market.
... First, the literature argues that further research is needed on the characteristics, challenges, and strategies that result in the success or failure of supply chains in emerging economies (Sacomano Neto and Pires, 2007;Cerra et al., 2008). Brazil is recognized as a leading emerging country that has recently been achieving significant economic success (Brainard and Martinez-Diaz, 2009;Aman, 2011;Goldstein, 2008). Second, some researchers have called for further research on natural resource-based supply chains in Latin America (e.g., Altenburg and Meyer-Stamer, 1999). ...
Although research on supply chain management has made many valuable contributions, there is a dearth of empirical evidence and theoretical reflection on the characteristics of supply chains operating mainly in emerging economies. Consequently, the literature still lacks a framework that incorporates the context and dynamics encountered in such settings. The aim of this paper is to help to fill this gap by exploring how sustainability can be managed within supply chains in Brazil and how the results of this challenge can potentially bring new insights for managing sustainability in other emerging economies. This research employs grounded theory approach and case study method in the upstream part of the Brazilian offshore oil and gas supply chain, which involves a successful case of a focal company that was able to incorporate sustainability into its supply chain. This research contributes to the literature by identifying and discussing those additional barriers encountered in Brazil due to unique idiosyncrasies and institutional environment. Also, this paper shows that pressing social issues increase supply chain uncertainty and that focal companies play an even more important role to endorse new technologies, increase integration, enhance collaboration and promote sustainable supply chains in countries like Brazil, where the identified barriers are particularly salient. Also, this research argues that natural resource-based supply chains may be more geographically bounded than other supply chains and that sustainable supply chains can only be successfully implemented through innovation, which becomes a critical driver for supply chain enhanced sustainability performance.
... Padua is a well-known BOP cluster for ornamental granite gneiss products in Brazilan emerging economy with a significant number of BOP producers and consumers (Regazzi et al., 2004;Pereira and Herschmann, 2005). Despite being a technology leader in certain industries such as aircrafts (Goldstein, 2008), energy (Silvestre et al., 2010a(Silvestre et al., , 2010b, biofuels (Hall et al., 2011), agriculture (Hall et al., 2008) and offshore ultra-deep oil production (Silvestre and Dalcol, 2009), the country still struggles with social disparities (Hall et al., 2012b). Second, the literature claims that further research is needed on the natural resource-based clusters in Latin America (Altenburg and Meyer-Stamer, 1999). ...
Although research on industry clusters has made many valuable contributions, a dearth of empirical evidence and theoretical reflection about the characteristics of Base of the Pyramid (BOP) clusters has persisted. Consequently, the literature still lacks a framework that incorporates the context, challenges, and dynamics encountered in such clusters. Drawing from clusters, capability accumulation, and innovation literatures, we develop a theoretical framework that provides a more fine-grained understanding of the dynamics encountered in BOP clusters, the role of support organizations, the importance of capabilities accumulation in firms, and the challenges associated with technology development and diffusion within such settings. We use case study research method conducted in a traditional granite-mining cluster in Brazil, based on 154 interviews with key informants between 1999 and 2011. Our findings suggest that BOP clusters present different dynamics when compared to clusters elsewhere, because of the existence of idiosyncrasies such as additional barriers to technology diffusion, especially when coupled with a lack of coordination and misaligned policy approaches. We contribute to the literature by arguing that the process of technology diffusion in BOP clusters is hindered by these barriers, and that technology development without wide diffusion within BOP clusters can become a source of social exclusion and wealth concentration. Moreover, in large emerging economies, global pipelines are not necessarily the only path for BOP clusters to achieve competitive advantage and sustainable growth, as suggested in the clusters literature.
Since the foundation of the People's Republic in 1949, China (PRC) has made strong efforts to build an independent aircraft industry, both civilian and military. During the first decade of its existence, the PRC received technology from the Soviet Union, while it started to build its domestic public institutions for research and teaching. After the Sino-Russian split in 1966, the flow of Soviet technology ebbed. Since 1972, the PRC started progressively to tap Western sources of technology, and is now close to launch its own commercial aircraft industry with a view to global markets. The paper analyses the strategies of the Chinese government for domestic institution building and international technology transfer, and how Western companies and governments helped China to nurture its future competitors.
Abstract: Developing countries often have ambitions to become major players
in the commercial aerospace industry, but it remains effectively a duopoly
dominated by Boeing of the USA and Europe’s Airbus. China is no exception
and the projects designed to bring this about have taken a number of forms.
Adopting the sectoral system of innovation (SSI) as an analytical framework,
this paper explores recent changes in the industry. Using China’s ARJ21
regional jet programme as a case study, it examines how these changes provide
opportunities for latecomer nations to catch-up technologically. It is argued that
the new institutional context and the presence of new actors within the SSI,
represent an opportunity for latecomer nations like China to acquire the
capability to design, develop and manufacture commercial jet airliners, through
linking with Western suppliers. However the analysis reveals that as a
latecomer nation, China may prove to be a special case, with the opportunities
for catch-up by other latecomers much more limited.
China's progress since it first opened to foreign investment and reform in 1978 has been dazzling. Over the last 20 years, and after a long period of economic autarky, the country emerged as a major player in world trade. In this context, China's accession into World Trade Organisation (WTO) in 2001 could be considered as a milestone. China emerged as both a threat and an opportunity for Latin American emerging markets. On average, and in spite of some exceptions, Latin America is a clear trade winner from Chinese global integration. In order to analyse the Chinese trade impact, we study the exporting and importing structure of the country. We used a database of 620 different goods and built two indexes of trade competition in order to compare Chinese impact over the period 1998-2003 on 34 economies of which 15 are Latin American countries. In general terms, the results confirm that there is no relevant trade competition between China and Latin America. Not surprisingly, those countries that export mainly commodities face lower competition. This is an expected result since China is a net importer of raw materials.
This study examined several hypotheses regarding the location choice of foreign direct investment from newly industrialized economies (NIEs). Using a sample of 328 Taiwanese firms in the analysis, this study found that the firms' motivations had a significant impact on the choice of their investment location (developed countries vs. less developed countries), yet this impact was moderated by the capabilities that the firms possessed. The results suggest that both asset-exploitation and asset-seeking aspects of investments are predictive of the NIE firms' location choice of investment.© 2002 JIBS. Journal of International Business Studies (2002) 33, 403–421
La economía china ha crecido a pasos agigantados y es hoy actor importante del comercio mundial. Para América Latina, el crecimiento chino constituye a la vez una amenaza y una oportunidad. En general, y pese a algunas excepciones, la integración de China al comercio mundial favorece claramente a América Latina. Para analizar los efectos del auge comercial chino, se estudió la estructura exportadora e importadora del país. Utilizando una base de datos que abarca 620 productos, se establecieron dos índices de competitividad comercial para comparar los efectos del comercio chino en 34 economías, 15 de ellas latinoamericanas, en el período 1998-2004. A grandes rasgos, los resultados confirman que en el mercado estadounidense no existe demasiada competencia comercial entre China y América Latina. Obviamente, el grado de competencia es menor en el caso de los países que exportan principalmente productos básicos (commodities), dado que China es importador neto de materias primas y América Latina tiene una abundante dotación de ellas.
The aviation industry is critical for Asia to gain from participation in the global economy. The airline industry in developing Asia is generally dominated by state-owned enterprises, and the record of state ownership is poor. Foreign direct investment would provide the managerial and technical skills needed to improve productivity. Paradoxically, however, this is an industry that combines extensive cross-border activities with almost insurmountable obstacles to foreign investment. Airline alliances and marketing arrangements have emerged as an imperfect substitute to consolidation through (cross-border) mergers and acquisition. This paper sketches the main features of international air transport, focusing in particular on the bilateral and multilateral regimes; presents the main characteristics of the developing Asia market and the specific Association of Southeast Asian Nations and Asia-Pacific Economic Cooperation forum objectives in this domain; analyzes ongoing developments in selected countries, in particular in privatizing flag carriers in India and Thailand and consolidating airlines in People's Republic of China; and concludes by putting findings from the region in the wider context of experiences in other developing regions and regulatory development at the multilateral level, including at the World Trade Organization.
In the epoch of global business revolution, the world’s leading firms have undergone a revolutionary transformation. Firms from developing countries are disadvantaged to compete on the global level playing field of international big business. This paper investigates the competitiveness of Chinese large firms on the global level playing field as China joins the World Trade Organization. Based on analysis of firms in two ‘strategic’ sectors: oil and aerospace, the authors conclude that China’s leading firms face critical challenges, even in the sector that has achieved significant successes.
after privatization to become a world market leader in a high-tech industry traditionally dominated by companies based in member countries of the Organization for Economic Cooperation and Development (OECD). Its main findings are that top management played a key role in aligning innovation for dynamic capabilites, that the company has been very successful in forming alliances with foreign partners and strengthening its bargaining position, and that the Brazilian authorities have consistently supported Embraer after relinquishing direct control. For these results to be extended to other companies, however, Brazil's export promotion tools must be made compatible with multilateral norms.
As China joins the World Trade Organization, the authors question whether China’s large firms will be able to compete on the global level playing field. Over the past two decades, Chinese large enterprises have undertaken extensive evolutionary change but, at the same time, the world’s leading firms have undergone a revolutionary transformation. Based on analysis of firms with the aerospace, oil and petrochemical industry, the authors conclude that China’s leading firms face critical challenges, even in sectors in which China’s policy-makers have scored significant successes.
This paper focuses on China's efforts to build a world-class aircraft manufacturing industry. In the first half of the 1990s, the potential of the Chinese industry to mount a competitive challenge to Western aircraft builders was largely discounted. Nowadays, the threat is taken more seriously. The growth in the Chinese air transport market has reinforced the bargaining power of national aircraft producers and authorities are giving priority to building science and technology capacity in this area. Progress in creating military/civilian synergies has proven much more modest and the overall industry still lacks effective coordination.
This paper explores the dynamics of high-tech industrialisation in three emerging countries with sub-regional power ambitions in the peculiar case of aerospace. The focus of the analysis is on the interaction between economic and political factors, at both the domestic and the international levels. The three (initially) state-owned firms show diverging fortunes that reflect differences in the ability to align the ownership structure to the financial requirements of technological upgrading, to adopt modern management practices, to participate actively in the internationalisation of global supply chains, and to garner the support of domestic interest groups. Copyright 2002, Oxford University Press.