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Theories of Internationalization and Foreign Direct Investment: How to Explain FDI from Emerging MNEs? Read chapter Read first chapter

2020 | OriginalPaper | Chapter

8. Motivations of Brazilian Firms to Invest in East Central Europe: Specific Home-Country Advantages and Some Host-Country Specificities Dominate

Author : Judit Ricz

Published in: Emerging-market Multinational Enterprises in East Central Europe

Publisher: Springer International Publishing

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Abstract

Ricz widens the geographical focus of the volume to the Latin American continent, by examining the European expansion strategies of Brazilian multinational enterprises. In terms of home-country advantages the chapter draws attention to Brazilian government policies that have actively influenced Brazilian companies’ internationalization decisions especially in the mid-2000s. It argues that the Brazilian going global strategy is rather defensive in its nature and limited in its impacts. Looking at host-country specificities of the few Brazilian companies investing in the East Central European region the study identifies the role of the diaspora and personal and informal ties as a major driving force, while some classical factors, such as low labour costs, agglomeration forces, high skilled labour force and thriving local markets, are also mentioned.

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previous chapter Turkish Investments in Central and Eastern Europe: Motivations and Experiences
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Footnotes
1
A few exceptions: Fleury et al. (2011), Santiso (2013), Éltető (2014), Aguzzoli and Hunek (2019).
 
2
In 2004, for example, the merger between Ambev (a Brazilian drinks group) and Interbrew (a Belgium-based brewer) with its value of five million US dollars had accounted for more than half of that year’s total Brazilian OFDI (with increased intra-company loans also accounting for 22% of total outward flows that year) (UNCTAD 2004).
 
5
The transnationality index was originally developed by UNCTAD and is calculated as the arithmetic mean of the ratio of foreign assets to total assets, the ratio of foreign sales to total sales and the ratio of foreign employment to total employment.
 
6
Fitesa is manufacturing nonwoven fabrics for use in hygiene, medical and industrial specialty applications.
 
7
In this section of the study we highlight the most recent sectoral composition, which reveals however rather a static pattern, and no significant sectoral changes took place during the last years (for a more detailed discussion see Ricz 2017 or the EMGP successive studies on Brazil, available: http://​ccsi.​columbia.​edu/​publications/​emgp/​).
 
8
Based on data received from the Brazilian Embassy in Budapest. In any other Hungarian sources much lower numbers appear regarding Brazilian companies’ presence in Hungary.
 
9
Tupy has taken over a plant in Skoczów from FCA and starts to operate in Poland in 2020.
 
10
Major Brazilian companies were also driven by the emergence of a new middle class in Brazil (in line with active social policies under the Lula era) and the subsequent increasing demand for consumer products. The food processing JBS-Friboi and the retailer CBD (Grupo Pão de Açúcar) are good examples, but also Brazilian banks (Banco do Brasil, Bradesco and Itaú-Unibanco) have benefitted from rising levels of consumer credits (Casanova and Kassum 2014: 72).
 
11
The literature writes about four phases, mainly based on the work of Casanova (2009, 2014, 2016), these analysis end however by 2014–2015, exactly at the time, when we date the beginning of last phase.
 
12
The literature writes about four phases, mainly based on the work of Casanova (2009, 2014, 2016); these analyses end however by 2014–2015, exactly at the time when we date the beginning of the last phase.
 
13
With catchy wording Casanova and Kassum (2014: 85) write about the ability of Brazilian firms to tackle the persistent “voo de galinha,” which means something like chicken flight, and refers to short-term economic downturns.
 
14
But we will show that some measures have already been in place since 1998.
 
15
BNDES loans were essential to make Brazilian companies competitive against the expanding Chinese companies, which were also supported by their government.
 
16
“Keep or position the local productive system amongst the top 5 world exporters/global players.”
 
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Metadata
Title
Motivations of Brazilian Firms to Invest in East Central Europe: Specific Home-Country Advantages and Some Host-Country Specificities Dominate
Author
Judit Ricz
Copyright Year
2020
Book
Emerging-market Multinational Enterprises in East Central Europe

Print ISBN: 978-3-030-55164-3

Electronic ISBN: 978-3-030-55165-0

Copyright Year: 2020

DOI
https://doi.org/10.1007/978-3-030-55165-0_8