The article examines why the automotive industry invested over US$20 billion in Brazil in the second half of the 1990s, focusing on how political economy factors influenced investment decisions. It is argued that, in a context of economic and policy uncertainty, when the state creates appropriate institutional mechanisms to communicate effectively with business and build a consensus for reform, in the process it also reduces investment risks. The argument is illustrated with the example of the Sectoral Chamber of the Automotive Industry (1991-95), and shows the impact of social concertation in neo-corporatist institutions on foreign direct investment.
Doctor, M. (2007). Boosting investment and growth: the role of social pacts in the Brazilian automotive industry. Oxford development studies, 35(1), 105-130. https://doi.org/10.1080/13600810601167629