Abstract
The aim of this chapter is to analyze the internationalization of research and development activities carried out by transnational corporations. Based on information about U.S. transnational corporations, provided by the Bureau of Economic Analysis, this chapter seeks to assess how such corporations allocate their R&D resources abroad, comparing the role of Asia and Latin America affiliates.
Introduction
As of the 1990s, after a period of retraction resulting from the 1980s debt crisis, Latin American (LA) countries have started to attract significant volumes of Foreign Direct Investment (FDI) again, especially to the largest countries in the region: Brazil, Mexico, and Argentina. From an average share of about 5.7% in FDI world flows in the period 1985–1990, LA countries reached an annual average of about US$ 26.7 billions between 1991 and 1996, and of US$ 89.1 billions between 1997 and 2000, which represented about 10% of the world total in each period.
As a result, the already high degree of internationalization of the productive structure in LA countries became even higher. Considering the 500 largest corporations in the region, the foreign companies answered for an average of about 25% of sales from 1990 to 1992. In the period 1998–1999, this percentage increased to 43%. Regarding the 100 largest LA companies in the manufacturing sector in the same period, the foreign share increased from 53% to 63% (Mortimore et al, 2001).