Multinational corporate product strategy, spatial diversification and nationalisation: A Guyanese comparison

The imlications of corporate product strategy and spatial structure for nationalisation by developing countries have been neglected. Corporate spatial diversification to reduce the importance of the target field unit in the corporate system is an important pre-requisite of frictionless divestment. But Guyanese nationalisation suggests that even after spatial diversification a vertically integrated, dominant product strategy confers less divestment capacity than a diversified, multi-product strategy. The product strategy classification used here may provide the necessary framework within which to explain the locational behaviour of multinational corporations.     

Resource-based industrialization and country size: Venezuela and Trinidad and Tobago

There are scale advantages in resource-based industrialization (RBI). Trinidad and Tobago's small size meant that its RBI projects resulted in: relatively low revenue retention, heavy dependence on export markets, skilled personnel shortages and severe ‘Dutch disease’ effects. However Venezuela squandered its size advantage because its RBI strategy was over-ambitious. Instead of taking advantage of its ample scope for risk-reducing diversification, Venezuela concentrated largely on metals processing in a single location. Although it captured more backward linkage than Trinidad and Tobago it did so at high cost as a result of inefficient project execution. Worse, Venezuela's metals projects greatly exceeded its sizeable domestic demand, overtaxed its human resources and exacerbated existing distortions in the economy. Since poorly implemented RBI projects can overwhelm even a large developing economy, RBI is risky and should therefore only be pursued as part of a flexible, broadly-based diversification drive.     

Multinational resource corporations,the product life-cycle and product strategy: the oil majors' response to heightened risk

During the post-war period multinational resource corporations in the mature stage of their product life-cycle pursued a dominant product strategy, retaining vertical integration from the pioneer stage and adding geographical diversification to reduce risk and secure economies of scale. Heightened uncertainty since the mid-seventies has removed the key assumption of this product strategy, namely that the need for product diversification would be signalled in ample time. The oil majors' dilemma between investment in new growth products or rationalisation of their existing oil-based chains underlines the present high risk of the dominant product strategy for multinational resource corporations.     

THIRD WORLD RESPONSE TO GLOBAL PROCESSES: THE MINERAL ECONOMIES

The utility of intercountry comparison in understanding responses to global economic change is illustrated with reference to the oil exporters, the most important class of mineral economy. The analysis is set within a resource based classification of developing countries.