Internationalization of emerging multinationals: the Latin American case

Abstract

Purpose – The purpose of this paper is to develop an analytical framework that challenges the condescending view of multinationals of emerging countries. In this paper, it is showed that emerging multinational companies (EMNCs) developed valuable resources that leveraged their internationalization strategies. Design/methodology/approach – An exploratory approach was used to investigate the internationalization strategies of EMNCs. A qualitative study was built on secondary data sources, particularly analysis of cases of the internationalization of Latin American companies. Findings – The internationalization strategies deployed by EMNCs are similar to the strategies of traditional multinationals (firms of developed countries). Similarly, EMNCs exploit, acquire or defend their resources in foreign markets. Additionally, the selection of each strategy depends on the availability, transferability and substitutability of the resources involved in the internationalization. Research limitations/implications – The traditional approaches that study the role of resources in the internationalization of the EMNCs have some shortcomings. It is worth conducting additional research including the approach developed here to advance in the comprehension of the behavior of EMNCs. Practical implications – Managers must identify and develop key resources to invest abroad. Additionally, managers need to take into account the characteristics of the resources of their firms to select an adequate strategy abroad. Originality/value – This paper shows that EMNCs are not resource laggards. Consequently, theoretical and empirical evidence is provided to advance the development of comprehensive theories of the internationalization of EMNCs. This paper offers academics and practitioners with a new focus to analyze the internationalization of EMNCs which are recognized as a driving force of the global economy.

International expansion for knowledge acquisition or knowledge acquisition for international expansion?

“…EMMNEs face a number of obstacles when entering foreign markets (Luo and Tung, 2007). They have to deal with: liabilities of foreignness stemming from a lack of legitimacy; liabilities of outsidership due to lack of membership in international networks (Cuervo-Cazurra and Un, 2007); and in some cases, a resource gap relative to advanced countries’ MNEs (Losada-Otálora and Casanova, 2014). …”

“…This seems to be even more important for emerging market multinational enterprises (EMMNEs), with reverse knowledge transfer (RKT) having arisen as an important issue for these firms. Some authors argue that, in a catch-up attempt, EMMNEs engage in foreign direct investment (FDI) in the pursuit of new knowledge or capabilities which, combined with their existing resources, enable them to compete more effectively with global players (Awate et al , 2015; Bartlett and Ghoshal, 1989; Losada-Otálora and Casanova, 2014; Luo and Tung, 2007). Several authors (Mudambi et al , 2014; Nair et al , 2015; Rabbiosi and Santangelo, 2013) have called for more research on RKT in the EMMNE context.…”

International Expansion of Colombian Firms: Understanding their emergence in foreign markets

“…Most of the empirical studies dealing with this debate focus on EMNEs and DMNEs from a limited set of countries, especially China, India and Brazil (Ciravegna, Fitzgerald and Kundu, 2013;Fleury and Fleury, 2011;Gammeltoft et al, 2010;Matthews, 2006). Moreover, just a limited amount of studies (Bianchi, 2014;Gonzalez-Perez and Velez-Ocampo, 2014;Lopez, Kundu and Ciravegna, 2009;Losada-Otálora and Casanova, 2014) observe multinationals from Latin America (other than the Brazilian and Mexican ones) and Colombian MNEs, which boosts the relevance of this study on Colombian MNEs. Most of these authors have identified gaps in empirical evidences and existing theoretical understanding of the international expansion of firms from Latin America (multilatinas).…”

Corporate social responsibility in Brazilian multinationals

“…When referring to common characteristics among EMNCs, Losada-Otálora and Casanova (2014) affirm that these companies are poor resources-endowed when compared to developed country multinationals and acquisitions are the preferred entry modes. The main purpose of cross-border investments of EMNCs is to overcome resource scarcity, especially technological resources; in other words, the pursue for such resources can be considered a motivation for these companies to operate abroad.…”

“…multinationals originating from emerging markets. Even though Brazil is currently considered the ninth largest economy in the word (World Bank, 2016), behind other emerging markets such as China and India, and ahead of some developed countries like Canada and Australia, and Mexico, a country from which some powerful multilatinas arise (Casanova & Fraser, 2009a;Casanova, Fraser & Hoeber, 2009), Brazilian companies still present a cautious and timid behavior when considering their internationalization process (Fleury & Fleury, 2009Borini et al, 2010;Casanova & Fraser, 2009a;Losada-Otálora & Casanova, 2014;Casanova, 2015;Ramamurti, 2012;Melo, 2009, Cyrino & Tanure, 2009, Pattnaik & Kumar, 2014.…”