Foreign Direct Investment in Chile: Historical Process, changing political ideologies and the responses of MNEs

Main Article Content

Carolina Salcedo
Michèle E.M Akoorie

Keywords

MNEs, foreign direct investment, Chile, political risk, corporate social responsibility, transition economies

Abstract

The objective of this paper is to identify how historical process and changing political ideologies have affected the responses of MNEs to investment in Chile. Using the historical dimension we provide a trajectory of development along which the Chilean economic system influenced by shifts in political ideologies has evolved. For each section we categorized the responses of MNEs during these periods of investment.  We then offer some contributions to theory and implications for managers by suggesting that understanding the functioning of a political system assists firm to develop and execute appropriate risk management strategies.

Downloads

Download data is not yet available.
Abstract 1936 | HTML Downloads 5724 PDF Downloads 607

References

Almond, G.A. and Powell, G. B. (1966). Comparative politics: a developmental approach. Boston, MA: Little, Brown and Company.

Allaire, Y. & M. E. Firsirotu (1989). Coping with strategic uncertainty. Sloan Management Review, 30(3), 7-16.

Behrens, R. (1992). Inversión extranjera y empresas transnacionales en la economía de Chile: 1974-1989; el papel del capital extranjero y la estrategia nacional de desarrollo. Estudios e Informes de la CEPAL numero 86, Santiago, Chile: CEPAL.

Buckley, P.J. & Lessard, D. R. (November 2005). Regaining the edge for international national business research. Journal of International Business Studies, 36(6), 595-599. DOI 10.1057/palgrave.jibs.8400170

Burmester, B. & Tayeb, M. H. 2000. International business theories: policies and practices. London: Pearson.

Bitar, S., Espinosa, J.G., Maulian, T., Vergara, P., & Vignolo, C. 1980. Chile, liberalismo económico y dictadura política. America Problema Series, Numero 11. Lima, Perú: Instituto de Estudios Peruanos.

Bremmer, I. & Keat, P. (2009). The Fat Tail: The power of political knowledge for strategic investing. Oxford University Press: Oxford.

Cardoso, F. & Faletto, E. (1979). Dependency and development. (M. Urquidi, Trans.). Berkeley, California: University of California Press.

CEPAL (Comisión Económica para America Latina y el Caribe) 1954. Antecedentes sobre el desarrollo de la economía chilena 1925-1952. Santiago, Chile: Editorial del Pacifico.

CEPAL (2001). La inversión extranjera en America Latina y el Caribe, 2000. Santiago, Chile: Naciones Unidas.

Collier, D. (1979). The new authoritarianism in Latin America. Princeton, NJ: Princeton University Press.

CORFO (2005). Chile: Global services platform. Chilean Economic Development Agency, CORFO. http://www.todochile.cl/corfo_det_20080910160133.aspx. Accessed 25 May 2005.

CORFO (2009). Guia para empresas y emprendedores. (Edición Marzo 2008). Santiago, Chile: CORFO.

Desormeaux, J. (1993). La inversión extranjera y su rol en el desarrollo de Chile. In D. Wisecarver (Ed.), El modelo económico chileno. Santiago, Chile: CINDE.

Easton, D. (1965). A systems analysis of political life. New York, New York: John Wiley & Sons.

ELAC (Economic Commission for Latin America and the Caribbean) (2000). Foreign investment in Latin America and the Caribbean, 1999. (LC/G/2061-P. Santiago, Chile: United Nations Publication.

Foreign Investment Committee, Chile (CINVER) (2004, 2005). http://www.cinver.cl Accessed 20 July 2009.

Ffrench-Davis, R. (2003). La inversión extranjera directa en Chile. In O. Muñoz Gomá (Ed.), Hacia un Chile competitivo: instituciones y políticas. Santiago, Chile: Editorial Universitaria-FLACSO.

Ffrench-Davis, R., & Tapia, H. (2001). Three varieties of capital surge management in Chile. In R. Ffrench-Davis (Ed.), Financial crises in successful emerging economies. Washington, D.C.: ECLAC and Brookings Institution Press.

Grindle, M.S. & Thomas J. W. (1991). Public choices and policy: The political economy of reform in developing countries. Baltimore, MD: Johns Hopkins University Press.

Hilbert, P. & Jones M. T. (December 2004). What if -- ? Finance & Development, 40(4), 24-27. Available at: http://www.imf.org/external/pubs/ft/fandd/2004/12/pdf/hilbers.pdf

Hirschman, A. 1979. The turn to authoritarianism in Latin America and the search for its economic determinants. In D. Collier (Ed.), The new authoritarianism in Latin America: (pp.61-98). Princeton, NJ: Princeton University Press.

Howell, L.D. & Chaddick, B. (1994). Models of political risk for foreign investment and trade: an assessment of three approaches. Columbia Journal of World Business, 29(3), 70-91. DOI 10.1016/0022-5428(94)90048-5

Hymer, S. (1972). The multinational corporation and the law of uneven development. In J. Bhagwati (Ed.), Economics and the World Order, New York: Macmillan.

Ianni, O. (1975). La formación del estado populista en América Latina Ciudad de Mexico, Mexico: Ediciones Era.

Jenkins, R. (1984). Transnational Corporations and industrial transformation in Latin America. London: Macmillan.

Jenkins, R. (1987). Transnational corporations and uneven development. London: Methuen.

Jones, B.D. (2001). Politics and the architecture of choice. Chicago: University of Chicago Press.

Kaufman, R. (1979). Industrial change and authoritarian rule in Latin America: A concrete review of the Bureaucratic-Authoritarian model, In D. Collier (Ed.), The New Authoritarianism in Latin America (pp.165-253). Princeton, NJ: Princeton University Press.

Kennedy, C. Jr. (August 1984). Multinational corporations and political risk in the Persian Gulf. Journal of Middle East Studies, 16(3), 391-403. DOI 10.1017/S0020743800028233

Kennedy, C. Jr. (1992). Relations between transnational corporations and governments of host countries: a look to the future. Transnational Corporations, 1(1), 67-91.

Lhabitant, F-S. & Tinguela, O. (May 2001). Financial risk management: an introduction. Thunderbird International Business Review, 43(3), 343-363. DOI 10.1002/tie.1001

Miller, K.D. (1992). A framework for integrated risk management in international business. Journal of International Business Studies, 23(2), 311-332. Available at: http://www.jstor.org/stable/154903

Muñoz, O. (1977). Estado e Industrialización en el ciclo de expansión del salitre’, Estudios CIEPLAN, Nº 6, Santiago de Chile, Corporación de Investigaciones Económicas para Latinoamérica (CIEPLAN), Enero.

Muñoz, O. (2003). Hacia un Chile competitivo: Instituciones y políticas. Santiago, Chile: Editorial Universitaria y FLACSO-Chile.

Oetzel, J. & Doh, J. (April 2009). MNEs and development: a review and reconceptualization. Journal of World Business, 44(2), 108-120. DOI 10.1016/j.jwb.2008.05.001

Quijano, A. (1974). Crisis imperialista y clase obrera en America Latina. Lima, Perú: Quijano.

Ramírez, H. (1970). Historia del Imperialismo en Chile. Santiago, Chile: Editorial Austral.

Redding, G. (2005). The thick description and comparison of societal systems of
capitalism. Journal International Business Studies, 36, 123-155. DOI 10.1057/palgrave.jibs.8400129

Richards, D. G. (1997). The political economy of the Chilean miracle. Latin American Research Review, 32(1), 139-159.

Riveros, L., & Vatter, J. (1994). La inversión extranjera directa en Chile, su contribución al desarrollo: 1987-93, Serie de Documentos de Trabajo - BID, numero 181. Washington, DC: BID.

Robock, S.H. & Simmonds, K. (1989). International business and multinational enterprises. Homewood, IL: Irwin.

Sethi, S.P. & Luther K. A. N. (1986). Political risk analysis and direct foreign investment: some problems of definition and measurement. California Management Review, 28(2), 57-68. DOI 10.1002/tie.5060280206

Sethi, S.P. (1994). Multinational corporations and the impact of public advocacy on corporate strategy: Nestlé and infant food formula controversy. Boston: Kluwer Academic Press.

Shapiro, A. (1986). Multinational financial management. Allyn and Bacon: Boston, Mass.

Simon, J.D. (1984). A theoretical perspective on political risk. Journal of International Business Studies, 15(1), 123-143. DOI 10.1057/palgrave.jibs.8490499

Simons, R. (2000). Performance measurement and control systems for implementing strategy. Upper Saddle River, New Jersey: Prentice Hall.

Van Wyk, J. (2010). Political sources of international business risk: An interdisciplinary framework. Journal of International Business Research, 9(1), 103-119.

Vernon, R. (1998). In the hurricane’s eye: The troubled prospects of multinational enterprises. Cambridge, MA: Harvard University Press.

Wilska, K. (2002). Host country determinants of foreign direct investment in Latin America: Finnish company cases in Brazil, Chile and Mexico. Turku, Finland: Turku School of Economics and Business Administration.