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Internationalization of innovative capabilities: counter-evidence from the electronics industry in Malaysia and Brazil


  • Norlela Ariffin
  • Paulo Figueiredo


The focus of this paper is the extent to which firms in the electronics industry in Malaysia and Brazil (Manaus) developed significant innovative technological capabilities. By examining whether innovative capabilities have spread to these two late-industrializing countries, the paper seeks to add new evidence to the debate over internationalization of innovative capabilities and to argue against existing generalizations. Internationalization of innovative capabilities is measured here by the technological capability types and levels built within firms. The framework for capability-building identifies types and levels of technological capabilities. The paper draws on empirical evidence from 82 electronics firms—transnational corporation subsidiaries and local firms: 53 in Malaysia (25 in Penang and 28 in Klang Valley) and 29 in Manaus (Northern Brazil). Empirical evidence was collected during extensive fieldwork based on different data-gathering strategies. Both qualitative and quantitative data analysis methods were used. Contrary to common generalizations, the study found that the capabilities of most sampled firms had been upgraded to carry out diverse innovative technological activities. Additionally, these capability-building efforts were strongly associated with higher capabilities for local decision-making and control, automation level and efforts to increase exports. The study found firms that innovated to be competitive by reducing costs, being more productive, reducing lead time and producing better products—regardless of whether they were in a domestic market-oriented country or in an export-oriented country. Finally, the analysis and framework in this study challenge some existing perspectives on the internationalization of innovative capabilities to the late-industrializing context.

Suggested Citation

  • Norlela Ariffin & Paulo Figueiredo, 2004. "Internationalization of innovative capabilities: counter-evidence from the electronics industry in Malaysia and Brazil," Oxford Development Studies, Taylor & Francis Journals, vol. 32(4), pages 559-583.
  • Handle: RePEc:taf:oxdevs:v:32:y:2004:i:4:p:559-583 DOI: 10.1080/1360081042000293344

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    Cited by:

    1. Figueiredo, Paulo N., 2008. "Industrial Policy Changes and Firm-Level Technological Capability Development: Evidence from Northern Brazil," World Development, Elsevier, vol. 36(1), pages 55-88, January.
    2. Altenburg, Tilman & Schmitz, Hubert & Stamm, Andreas, 2008. "Breakthrough China's and India's Transition from Production to Innovation," World Development, Elsevier, vol. 36(2), pages 325-344, February.
    3. Tello-Gamarra, Jorge & Zawislak, Paulo Antônio, 2013. "Transactional capability: Innovation’s missing link," Journal of Economics, Finance and Administrative Science, Universidad ESAN, vol. 18(34), pages 2-8.
    4. Lee, Chien-Chiang & Chen, Mei-Ping & Chang, Chi-Hung, 2013. "Dynamic relationships between industry returns and stock market returns," The North American Journal of Economics and Finance, Elsevier, vol. 26(C), pages 119-144.
    5. Collinson, Simon C. & Wang, Rowena, 2012. "The evolution of innovation capability in multinational enterprise subsidiaries: Dual network embeddedness and the divergence of subsidiary specialisation in Taiwan," Research Policy, Elsevier, vol. 41(9), pages 1501-1518.
    6. Peerally J.A. & Figueiredo P.N., 2013. "Technological capability building in MNE-Related social businesses of less developed countries : the experience of Grameen-Danone foods in Bangladesh," MERIT Working Papers 036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Iammarino, Simona & Padilla-Pérez, Ramon & von Tunzelmann, Nick, 2008. "Technological Capabilities and Global-Local Interactions: The Electronics Industry in Two Mexican Regions," World Development, Elsevier, vol. 36(10), pages 1980-2003, October.
    8. Rajah Rasiah, 2015. "The industrial policy experience of the electronics industry in Malaysia," WIDER Working Paper Series 123, World Institute for Development Economic Research (UNU-WIDER).
    9. Sabrina Lenz & Monica Pinhanez & Luis Enrique Urtubey De Césaris & Charlotte Jacobs, 2016. "Open Innovation And The Challenges Of Human Resource Management," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(07), pages 1-26, October.
    10. Figueiredo, Paulo N., 2016. "New challenges for public research organisations in agricultural innovation in developing economies: Evidence from Embrapa in Brazil's soybean industry," The Quarterly Review of Economics and Finance, Elsevier, pages 21-32.
    11. Argentino Pessoa, 2008. "Multinational Corporations, Foreign Investment, and Royalties and License Fees: Effects on Host-Country Total Factor Productivity," Notas Económicas, Faculty of Economics, University of Coimbra, issue 28, pages 6-31, December.
    12. Figueiredo, Paulo N., 2016. "Evolution of the short-fiber technological trajectory in Brazil's pulp and paper industry: The role of firm-level innovative capability-building and indigenous institutions," Forest Policy and Economics, Elsevier, vol. 64(C), pages 1-14.
    13. Figueiredo P.N., 2013. "Beyond technological catch‐up : An empirical investigation of further innovative capability accumulation outcomes in latecomer firms with evidence from Brazil," MERIT Working Papers 048, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Figueiredo, Paulo N. & Vedovello, Conceição, 2005. "Firms’ Creative Capabilities, the Supporting Innovation System and Globalization in Southern Latin America: A Bleak Technological Outlook or a Myopic Standpoint? Evidence from a Developing Region in B," UNU-INTECH Discussion Paper Series 04, United Nations University - INTECH.
    15. Sato, Yuri & Fujita, Mai, 2009. "Capability Matrix : A Framework for Analyzing Capabilities in Value Chains," IDE Discussion Papers 219, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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