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The empirical literature on Kaleckian growth and distribution models consists almost exclusively of studies of developed countries. These studies have used varied econometric techniques and estimation methods, but little attention has been given to developing countries. Onaran and Galanis (2013) provide an extensive review of this literature, and they complement it by estimating models for some developing countries. However, owing to lack of data they were unable to estimate their model for Brazil. This paper expands the empirical literature by applying it to Brazil. The Brazilian demand regime is analysed for the period of 1956–2008, using functional distribution of income data supplied by Adalmir Marquetti (which was developed in a paper by Marquetti et al. 2010). The paper estimates the open-economy Bhaduri–Marglin model using the single-equation technique outlined in Hein and Vogel (2008). The results of the estimation show that the demand regime in Brazil is wage-led domestically despite being an open economy. Consequently, increases in the profit share tend to diminish demand. The paper concludes with some policy implications of the findings.

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Different studies have discussed the factors that influence outward foreign direct investment (OFDI) from developing countries. However, the choice of location and the role of institutional distance are still controversial. The aim of the present paper is to address the determinants of OFDI from Brazil from the perspective of the host countries. Using a panel data model, we have tested the impact of cultural and institutional distances on OFDI, and noted the moderating effects of the economic performance of the host country. The results show that institutional difference has a positive effect on OFDI; however, such effect is constrained by the size of the host country and the amount of its bilateral trade. We have found no statistically significant relationships between cultural distance and OFDI, but in our study geographical proximity had a positive effect on the strategy of Brazilian OFDI. The results pointed to two main implications. First, the positive effect of institutional distance on OFDI may be constrained by the bilateral trade flows between home and host countries. Second, multinational companies from Brazil are more likely to invest in a culturally distant country when it delivers better institutional performances, which suggests that there is a complementary relationship between cultural and institutional distance.