Foreign Ownership, and Learning and Innovation in the Automotive Firms in Brazil, India and South Africa: The Role of Institutions in Technological Capability Building (Rajah Rasiah)


This paper examines the relationship between the embedding systemic and institutional support and technological capabilities in foreign and local automotive firms in Brazil, India and South Africa. Despite firms in Brazil and South Africa enjoying stronger exposure to foreign ownership and external markets than those in India, firms in the former two countries show lower technological capabilities than those in the latter. Stronger human capital endowments and network cohesion have helped firms in India to offset a lack of integration in the value chains of foreign multinationals and external markets to drive higher technological capabilities than firms in Brazil and South Africa. The evidence also shows that human resource and R&D capabilities of foreign firms increase as the strength of the four systemic pillars rises.

Working Paper