Business History Review

Articles

Determinants of Firm Entry into the Brazilian Automobile Manufacturing Industry, 1956–1968

Helen Shapiroa1

a1 Helen Shapiro is assistant professor of business administration at the Harvard Business School.

Abstract

This article examines the negotiating process between the Brazilian state and transnational auto companies. It argues against dichotomous frameworks that emphasize either economic or political variables in shaping foreign direct investment and in favor of a more complicated bargaining framework that takes into account the strategic objectives of state policy as well as the form and timing of firm investment. Using archival evidence and interviews, the article documents the implantation of the industry; it concludes that the process of firm entry into Brazil must be understood in light of the policies and institutions that made the threat of market closure and the deadlines credible and made it costly for firms not to participate on schedule.

Helen Shapiro received her doctorate in economics from Yale University in 1988. She is an assistant professor of business administration at the Harvard Business School. Her dissertation was awarded the 1989 Herman E. Krooss Prize of the Business History Conference; a revised version, Engines of Growth: The State and Transnational Auto Companies in Brazil, will be published by Cambridge University Press. She has recently completed a study on investment and trade flows in the Brazilian and Mexican auto industries, “Automobiles: From Import Substitution to Export Promotion in Brazil and Mexico,” in a larger Harvard Business School project on world trade and global competition, to be published as Beyond Free Trade: Firms and Governments in World Trade, ed. David B. Yoffie, forthcoming from Harvard Business School Press in 1993.