Document Type


Publication Date

Spring 1979

Published In

International Organization


Export promotion has replaced import substitution as the orthodox strategy for economic development. In sectors dominated by transnational corporations, however, such a strategy may run afoul of difficulties not immediately apparent from the neoclassical comparative-advantage perspective that has provided its principal theoretical support. Evidence from the Mexican automobile industry shows that an export promotion policy may face problems of a) demand rigidities in TNC intracompany transfers, b) decision dependency, c) difficulties in enforcing sanctions in cases of recalcitrance, and d) an unequal distribution of benefits between foreign-owned and domestically-owned firms.


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