State–Firm Nexus, Indigenous Coupling, and Social Downgrading in the Aerospace Global Production Network: A Case Study of Embraer, Brazil

Global production network (GPN) scholars increasingly focus on examining exclusionary processes in strategic coupling. However, attention has been given to structural coupling, where uneven outcomes often evolve through lead firms exploiting power asymmetries to foster their interests over regions. Functional and indigenous coupling, although acknowledged to have exclusions, are considered to be less likely for such outcomes due to assumed symmetrical power. This assumption has led to a lack of studies exploring not only how uneven outcomes evolve in indigenous coupling but also what territorial mechanisms are involved. This article addresses this gap by conceptualizing the notion of a statist transnational community (STC) as a crucial mechanism in indigenous coupling, and with potential to explain how asymmetrical relations can emerge and foster exclusionary processes. Based on qualitative methods, this article analyzes Brazil's integration into the aerospace GPN through indigenous coupling. First, it examines how the Brazilian developmental state, under a national developmental ideology, fostered coupling in São José dos Campos (SJC) by establishing institutions, regional assets, Embraer, and an aerospace industrial cluster. Second, it elucidates how the Brazilian state facilitated the formation of an STC crucial in establishing firms and creating and harnessing regional assets. Additionally, it reveals how and why the SJC STC is marked by relative symmetrical and cooperative relations, and encourages collaboration. Lastly, this article investigates a training partnership between Embraer and the Aeronautics Institute of Technology in SJC, disclosing how asymmetrical power relations can also be present in indigenous coupling, fostering social downgrading, especially in relation to labor.