Internationalization and structural dependency: foreign corporations and the erratic trajectory of the Brazilian economy

Abstract

This paper provides an analysis of the internationalization of the Brazilian industrial production structure, which was extended and intensified during the 1990s and early 2000s. The goal is to evaluate if this process brought benefits to Brazilian development. In the spotlight is the intrafirm trade between foreign capital corporations of the Brazilian manufacturing industry, based on data from the Central Bank of Brazil Census of Foreign Capital for 1995, 2000, and 2005. The growing internationalization of the industrial productive structure magnified a historical relation of dependency, which increased in scale from the 90s, when Brazil became a more open economy, and more attractive to direct external investment. It is concluded that the increase in participation of transnational corporations in the Brazilian economy in addition to the way Brazil inserted itself in the global value chains contributed to increasing structural dependency, with negative effects on development.

Keywords:
Brazilian economy; Transnational corporations; Internationalization; Structural dependency