Political and Institutional Embeddedness of FDI: a case study of Nissan in Rio, Brazil

Abstract

Although globalization is an interdisciplinary subject, phenomena such as foreign direct investments (FDI) are thought of as belonging to the economic sphere. In this article, we draw from the global production network model and the New Economic Sociology of FDIs to test the embeddedness of economic action. We've designed a least likely case study from an FDI in the auto industry, evaluating Nissan Motor Co.’s decision-making process to build an automobile factory in Brazil. Our findings support the sociopolitical embeddedness hypothesis. The paper contributes to the literature of Economic Sociology when we argue that, despite the "always embedded" assumption, Nissan's investment decision was progressively embedded in time and space.

Keywords:
foreign direct investment (FDI); social embeddedness; institutions; politics; automotive industry