Transnational corporations' strategies and foreign trade patterns in MERCOSUR countries in the 1990s

Market-seeking strategies predominate in the recent FDI boomin MERCOSUR countries. In the trade performance of transnationalcorporation affiliates a sort of ‘asymmetric integration’is clearly visible: they produce for the internal market and,to some extent, for the regional one, while import inputs andfinal goods from developed countries (and a significant partof these trade flows is intra-firm). Thus, even if affiliatesobtained productivity gains in the 1990s, they have not yetbeen reflected in a significant increase in exports, and evenless in extra-regional exports. Hence, the foreign direct investmentboom seemingly has not yet contributed to a better insertionof MERCOSUR countries into the world economy.     

The challenge by domestic enterprises to the transnational corporations' domination: A case study of the Argentine pharmaceutical industry

Given the relative reduction in the rate of innovation of the large TNCs operating in the pharmaceutical field and the reduced interest in the Argentine market by most of the TNCs in the late 1960s and the early 1970s, domestic firms have been able to challenge the domination of the pharmaceutical industry by foreign enterprises. Using the techniques of product differentiation, they have been able to launch more new medicines into the market than foreign enterprises. This was done through transfer of technology agreements in a number of cases, relying on non-patented sources for the provision of active components in other cases and devoting some resources to local R and D. As a result of the challenge, foreign participation in the market for finished products in Argentina was not high by international standards (57% in 1972), the majority of the pharmaceutical sub-markets showed a medium degree of business concentration and the ranking of the leading firms included 6 local enterprises among the 15 leaders of the country.     

The changing remittance behaviour of United States manufacturing firms in Latin America

An examination of the remittances made in 1966–1979 by US manufacturing firms operating in Latin America has clearly shown that intra-firm technology payments have been reduced in absolute terms since 1975. This has been a result of government regulations in this area. The total record of repatriated dividends and interest payments does not suggest a shift from technology payments to other normal types of remittances.Lower remittances have not resulted from lower overall earnings. On the contrary, earnings have been growing faster than remittances, have been mainly reinvested in the region and have led to higher investments in fixed assets. Such higher investment requirements in the 1970s can be explained by oligopolistic reaction to specific economic policies aimed at fostering the industrialization process with the participation of TNCs based not only in the US but also in Europe and Japan and to the less attractive prospects in traditional investment destinations.     

Patents and trademarks in pharmaceuticals

While the role of patents and trademarks in reinforcing the market power of TNCs operating in the pharmaceutical industry is beyond doubt, the possibilities of reducing such market power through public policies dealing with industrial property in developing countries are less clear. Evidence on policies aimed at eliminating or weakening patent rights, and/or at promoting the use of generic names instead of trademarks for pharmaceuticals is examined. It is concluded that these policies are a necessary but not a sufficient condition for modifying the current market structure of the pharmaceutical industry in developing countries.     

Foreign trademarks in developing countries

Foreign trademarks are used in some cases to cover imported goods and generally products made in the host countries by foreign manufacturing subsidiaries and licensees. This industrial property right is a major source of market power for those subsidiaries making consumer goods. Domestic enterprises making similar goods must either accept a reduced share of the market or must enter into trademark license agreements. But even in those cases, although licensees of foreign-owned trademarks receive a current profit out of the licence, they cannot enjoy the result of the goodwill development.Although the advertising expenditures are borne by the consumers of the developing countries, the accrual in goodwill is for the benefit of non-resident owners of this intangible asset. These private benefits — mostly appropriated by the foreign trademark owner — can be considered as net social costs to the recipient country.     

Money for Science? The Impact of Research Grants on Academic Output*

This paper evaluates the impact of subsidies on the academic performance of researchers in Argentina. Academic performance is measured in terms of number of publications and in terms of impact factors in peer‐reviewed journals. The performance of researchers with financially supported projects is compared with that of a control group of researchers who submitted projects accepted in terms of quality but not supported because of shortage of funds. We use non‐experimental data and a difference‐in‐differences approach along with propensity score matching techniques, where we control for pre‐programme observable attributes as well as for researchers’ time‐invariant unobservable characteristics. Our findings suggest a positive and statistically significant effect of subsidy on academic performance, especially for young researchers.