The Emergence of Latin Multinationals

Santiso, Javier (2008): The Emergence of Latin Multinationals.

Abstract

The corporate world has changed remarkably in the past 10 years. New multinationals are appearing in countries with emerging markets such as Brazil, India, China, South Africa and Mexico, which are not only top recipients of foreign capital, but have fast become major investors themselves. An important part of the remarkable story of emerging multinationals has been the eruption of world-class Latin multinationals (or multilatinas) from Mexico and Brazil, in particular, following the path taken by their Spanish counterparts in the 1990s. In all these cases, classical push and pull factors have been driving their emergence. But a decisive helping hand for these multilatinas over the past decade has been the declining cost of capital. This financial dimension is driving the leap from overseas sales to overseas acquisitions, a phenomenon that will be explored in this article.

• Item Type: MPRA Paper
• Language: English
• Keywords: Transnational corporations Emerging markets; Foreign direct investment; Investments; Business enterprises; Industrial enterprises; Statistical data; Brazil; Mexico; Latin America; Spain
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business

References

Alfaro, L. and E. Hammel (2006): Latin American multinationals, The Latin American Competitiveness Review 2006, Davos, World Economic Forum. Available in: http://www.people.hbs. edu/lalfaro/LatinAmericanMultinationals.pdf América Economía (2006): various numbers, Coral Gables, Florida.

Ananchotikul, S. and B. Eichengreen (2008): Plumbing for Latin American Capital Markets, BIS Papers, No. 36, Basel, Bank for International Settlements. Available in: http://www.bis. org/publ/bppdf/bispap36.htm

AT Kearney (2008a): New Concerns in an Uncertain world: the 2007 AT Kearney Foreign Direct Investment Confidence Index, Virginia. (2008b): The Rise of Emerging Markets in Mergers and Acquisitions, Virginia.

Aulakh, P. (2007): Emerging multinationals from developing economies: motivations, paths and performance, Journal of International Management, vol. 13, No. 3, Amsterdam, Elsevier.

Baena, C. (2002): Growth beyond national borders: a policy making analysis of PDVSA’s internationalization strategy, Latin American Business Review, vol. 3, No. 1, Washington, D.C., Carnegie Endowment for International Peace .

Beausang, F. (2003): Third World Multinationals: ¿Engine of Competitiveness or New Form of Dependency?, London, Palgrave.

Blázquez, J., J. Rodríguez and J. Santiso (2006): Angel or Devil? China’s Trade Impact on Latin American Emerging Markets, OECD Development Centre Working Paper, No. 252, Paris, June.

Boston Consulting Group (2006a): China’s Global Challenges. The Strategic Implications of Chinese Outbound M&A, BCG Report, Boston, May. (2006b): The New Global Challenges. How 100 Top Companies from Rapidly Developing Economies are Changing the World,

BCG Report, Boston, May. (2007): The 2008 BCG Top 100 New Global Challengers, BCG Report, Boston, December. Available in: http://www.bcg. com/impact_expertise/publications/fi les/Global_Challengers_ short_Feb_2008.pdf

Claessens, S. and S. Schmukler (2007): International Financial Integration Through Equity Markets: Firms from which Countries go Global?, IMF Working Paper, No. 138, Washington, D.C., International Monetary Fund, June. Published also in Journal of International Money and Finance, vol. 26, No. 5, Amsterdam, Elsevier, September 2007.

Coase, R.H. (1994): La empresa, el mercado y la ley, Madrid, Alianza Editorial.

Cuervo-Cazurra, A. (2008): The internationalization of developing country MNEs: the case of multilatinas, Journal of International Management, Amsterdam, Elsevier, forthcoming. Available in: http://msbweb.moore.sc.edu/acuervo/Welcome.htm

Cuervo-Cazurra, A. and M. Genc (2008): Converting disadvantages into advantages: developing country MNEs in the least developed countries, Journal of International Business Studies, London, Palgrave Macmillan, forthcoming.

Chudnovsky, D., B. Kosacoff and A. López (1999): Las multinacionales latinoamericanas: sus estrategias en un mundo globalizado, Buenos Aires, Fondo de Cultura Económica. Deutsche Bank Research (2006): Global Champions in Waiting: Perspectives on China’s Overseas Direct Investment, Frankfurt am Main. (2008): Russia’s Outward Investment, Frankfurt am Main. Available in: http://www.dbresearch.com/

Dunning, J. (1979): Explaining changing patterns of international production: in defence of an eclectic theory, Oxford Bulletin of Economics and Statistics, vol. 41, No. 4, Oxford, Blackwell Publishing.

(1980): Towards an eclectic theory of international production: some empirical tests, Journal of International Business Studies, vol. 11, No. 2, London, Palgrave Macmillan.

(1995): Reappraising the eclectic paradigm in an age of alliance capitalism, Journal of International Business Studies, vol. 26, No. 2, London, Palgrave Macmillan.

ECLAC (Economic Commission for Latin America and the Caribbean) (2008), Inversión extranjera en América Latina y el Caribe anota récord en 2007, Santiago, Chile.

Feenstra, R. and G. Hamilton (2006): Emergent Economies, Divergent Paths, Cambridge, Massachusetts, Cambridge University Press.

Financial Times (2006): various numbers, London.

Fostel, A. and G. Kaminsky (2007): Latin America’s Access to International Capital Markets: Good Behaviour or Global Liquidity?, NBER Working Paper Series, No. 13194, Cambridge, Massachusetts, National Bureau of Economic Research.

Gammeltoft, P. (2008): Emerging multinationals: outward FDI from BRICS countries, International Journal of Technology and Globalisation, vol. 4, No. 1, Geneva, Inderscience Publishers. Available in: http://ir.lib.cbs.dk/download/ISBN/X075239.pdf

Goldstein, A. (2007): Multinational Companies from Emerging Economies: Composition, Conceptualization and Direction in the Global Economy, London, Palgrave.

(2008): A Latin American global player goes to Asia: Embraer in China, International Journal of Technology and Globalisation, vol. 4, No. 1, Geneva, Inderscience Publishers.

Guillén, M. (2005): The Rise of Spanish Multinationals: European business in the Global Economy, Cambridge, Cambridge University Press.

Hardouvelis, G., A. Dimitrios Malliaropulos and R. Priestley (2007): The impact of EMU on the equity cost of capital, Journal of International Money and Finance, vol. 26, No. 2, Amsterdam, Elsevier, March.

Jones, G. (2005): Multinationals and Global Capitalism from the Nineteenth to Twenty First Century, New York, Oxford University Press.

Khanna, T. (2008): Billions of Entrepreneurs: How China and India Are Reshaping Their Futures and Yours, Boston, Massachusetts, Harvard Business School Press.

Khanna, T. and Y. Yafeh (2007): Business groups in emerging markets: paragons or parasites?, Journal of Economic Literature, vol. 45, No. 2, Nashville, Tennessee, American Economic Association. Kosacoff, B., J. Forteza and others (2001): Globalizar desde Latinoamérica: el caso de Arcor, Buenos Aires, McGrawHill Interamericana.

Lall, Sanjaya (ed.) (1983): The New Multinationals: the Spread of Third World Enterprises, Chichester, Wiley.

Levy-Yeyati, E., U. Panizza and E. Stein (2007): The cyclical nature of Nort-South FDI fl ows, Journal of International Money and Finance, vol. 26, No. 1, Amsterdam, Elsevier.

OECD (Organisation for Economic Co-operation and Development) (2007): Latin American Economic Outlook 2008, Paris, OECD Development Centre.

Oman, Ch. (ed.) (1986): New Forms of Overseas Investment by Developing Countries: the Case of India, Korea and Brazil, Paris, OECD Development Centre. Rugman, A. (2005): The Regional Multinationals, Cambridge, Cambridge University Press.

(2007): Multinational Enterprises from Emerging Markets, Indiana, Kelly School of Business, Indiana University. Available in: http://www.g7.utoronto.ca/conferences/2007/ rugman2007.pdf

Rugman, A. and L. Jing (2008): Will China’s multinationals succeed globally or regionally?, European Management Journal, vol. 25, No. 5, Amsterdam, Elsevier. Available in: http:// www.kelley.indiana.edu/rugman/research.htm

Santiso, J. (2006a): La emergencia de las multinacionales latinas, Claves de la economía mundial, Madrid, Instituto Español de Comercio Exterior (ICEX).

(2006b): Latin America’s Political Economy of the Possible: Beyond Good Revolutionaries and Free Marketers, Cambridge, Massachusetts, MIT Press.

(2007a): La internacionalización de las empresas españolas: hitos y retos, Información comercial española, ICE: Revista de economía, No. 839, Madrid, Ministerio de Industria, Comercio y Turismo, November-December.

(2007b): La transformación empresarial española, Política exterior, vol. 21, No. 115.

Sauvant, K. (ed.) (2008): The Rise of Transnational Corporations from Emerging Markets, New York, Edward Elgar.

Tolentino, P.E. (1993): Technological Innovation and Third World Multinationals, London, Routledge.

UNCTAD (United Nations Conference on Trade and Development) (2006): World Investment Report 2006. FDI from Developing and Transition Economies: Implications for Development,

UNCTAD/WIR/2006, Geneva, United Nations. United Nations publication, Sales No. E.06.II.D.11.

Van Agtmael, A. (2007): The Emerging Markets Century: How a New Breed of World-Class Companies Is Overtaking the World, New York, Free Press.

Vernon, R. (1966): International investment and international trade in the product cycle, The Quarterly Journal of Economics, vol. 80, No. 2, Cambridge, Massachusetts, The MIT Press.

Wells, L. (1983): Third World Multinationals: the Rise of Foreign Direct Investment from Developing Countries, Cambridge, Massachusetts, The MIT Press.