This project investigates how the process of transnationalization affects the strategies of the Central American economic groups (CAEGs), and what these strategies will mean for the sustainable development of the region. Confronting Transnationalization: the Economic, Environmental, and Political Strategies of Central American Economic Groups
Little empirical research has been done on how the process of transnationalization affects the strategies of the Central American economic groups (CAEGs), and what these strategies will mean for the sustainable development of the region. The purpose of this project is to investigate the questions:
1. What are the strategies of the CAEGs confronted with transnationalization?
2. What can explain the different strategies?
3. To what extent do these strategies contribute to sustainable development of the region, or deepen patterns of inequality, unsustainable use of resources, and political exclusion.
More specifically, the project has three components that aim to answer a number of questions: The first component focuses on the economic strategies
of the CAEGs. Whereas the CAEGs are mostly family owned, and confined to Central America, they have established a variety of different relationships with larger TNCs operating in the region. Yet little is known about their goals and strategies of transnationalization, and the impact of these. Furthermore, we have limited knowledge about the extent to which the transnationalization strategies of the CAEGs contribute to promote
economic growth and employment in a region suffering from sluggish activity and productivity, as well as unemployment. We also have little knowledge about what influences the choice of strategy. These are the issues that will be investigated under the first component.
The second component focuses on the environmental strategies of the CAEGs. Much attention has been paid to the environmental conduct and strategies of large TNCs. They are currently viewed both as (to some extent unruly) subjects of national and international regulation, and as potential agents of sustainable development - through investments in green technology but also through self-regulation and social responsibility. This component will investigate the inclusion of environmental considerations in the annual business plans of the CAEGs: to what extent environmental management is an integral part of their operations, as well as their involvement in the regional environmental agenda. It will also investigate how the large economic groups interact with the regional environmental institutions that recently have gained increasing relevance.
The third component focuses on the political strategies of the CAEGs. Many of the CAEGs have traditionally had dominant positions in national politics in their home countries. However, the relationship to their respective states has varied significantly across the different Central American countries. Moreover, there are signs that the process of transnationalization has created a rupture of the old order due to a reduction of monopoly powers in several sectors (although it still remains in many), and the increased importance of large TNCs. However, whether this will be a real rupture may depend on the form of alliances that the CAEGs form with the TNCs and the extent to which they are able to transnationalize themselves. This part of the project seeks to investigate the political strategies of the CAEGS confronted with the new challenges, to understand the rationale for different strategies as well the degree to which they contribute to exclude other social forces. Gaining increased insight into the questions above will not only contribute to a better understanding of the current processes of change in Central American business. Considering how the productive structures have impacted on development and democracy historically, this may also be a key to understanding the direction of broader political and economic processes in the region.
The Norwegian Research Council
- Castellacci, Fulvio (2012). Business Groups, Innovation and Institutional Voids in Latin America. NUPI Working Paper: 809. 41 pages. The paper presents an empirical analysis of the innovative activities of business groups in Latin America.