Cooperation between Danish and Argentinean Firms: forms and impact

ROCHA, H; SCHAUMBURG-MULLER

Congreso; 6th International Meeting of the Iberoamerican Academy of Management; 2009

Este artículo es con referato Globalization has led to profound changes in the ways and forms under which cross-border firm cooperation takes place. Increasingly such firm cooperation takes place between firms in developed countries and firms in developing and emerging market economies. Much research interest has been given to cooperation with firms in Asia, and significantly less to cooperation between firms in Europe and in Latin America. This joint research project will focus on cooperation between Danish affiliate firms and their local partners located in Argentina. An important development in economic globalization has been how different parts of the value chain are being dispersed at various locations and how the value chain is managed in different ways. When this process involves different companies in non-hierarchical and non-ownership relations, questions arise related to the division of value chain activities, to the governance and management of the chain and to the effects of the linkages and resource flows between the firms. These questions have been addressed under various headings in the international business (IB) literature. The focus of this paper is on the cooperation between Danish affiliates in Argentina and their local partners. In particular, this paper focuses on the linkages and the transfer of resources between these firms and the impact of their interaction on the local partners. The overall research questions guiding this paper are: (1) Why do Danish invest in Argentina?; (2) How do the affiliates cooperate with local firms?; and (3) What is the impact of the cooperation on the partner firms? To answer these questions we lean primarily on the IB literature dealing with effects of direct linkages between the affiliate of the multinational corporation (MNC) and its business partners in the host country, but as a background to understand the formation of linkages we need to look at why the MNC invest drawing at location motives (Dunning 1993; Lasserre 2003). This paper contributes to new knowledge in the following ways: (1) Much of the recent offshoring/outsourcing debate has been concerned with the strategies of the offshoring firm and the impacts in the home country (Sako 2005). Less attention has been paid to the forms of cooperation, the linkages and the impact on the local firms cooperating with the affiliate of the multinational corporations (MNCs) (cf. Rocha, 2006; Rocha and Miles, 2009). (2) Furthermore, studies have focused on outsourcing in the supply chain of upstream manufacturing value added activities (supplier and subcontractors) and on offshoring of business service support activities.  Much less attention has been paid to offshoring of downstream activities including marketing, distribution, sales and after-sales services (Scott-Kennel and Enderwick 2005:115; Giroud and Scott-Kennel 2006:8). This form of firm cooperation is related to knowledge of host country markets, marketing, distribution networks and customer knowledge. (3) Finally, because the main debate on offshoring has been on the upstream supplier linkages, the geographic focus has been on business relations with firms in Asia. European not to say Danish firm cooperation in Latin America has attracted much less attention.