Home/Working Papers/Determinants of Firm Competitiveness in Latin American Emerging Economies: Evidence from Brazil’s Auto-parts Industry
Determinants of Firm Competitiveness in Latin American Emerging Economies: Evidence from Brazil’s Auto-parts Industry
Código: WPE – 089
Luiz F. Mesquita
Sergio G. Lazzarini
We study how intra-firm practices, inter-firm relationships, and institutions influence the competitiveness of individual companies. We propose that participation in industry associations allows firms to enhance intra- and inter-firm practices that lead to increased production efficiencies. Based on survey data and interviews with suppliers in the Brazilian auto-parts industry, we find that participation in associations encourages companies to work together and provides them with information and other resources that foster the development of superior intra-firm practices and inter-firm relationships. For their part, and as expected, the adoption of firm-level practices and a willingness to develop closer ties with customers were directly associated with stronger performance at the company level. Our study highlights the importance of studying the joint impact of intra-firm firm practices and interfirm relationships (both vertical and horizontal) on the competitiveness of firms.