Strategic alliances in emerging Latin America: a view from Brazilian,Chilean, and Mexican companies

Brazil, Chile, and Mexico constitute the leading newly industrialized countries (NICs) of Latin America. It is within these markets that the world expects significant economic gains over the next decade. Local companies in these countries are allying with foreign companies to enhance their competitive positions, yet little is understood about such interfirm collaboration with partners from these Latin American countries. Our study examines the strategic objectives of these Latin American companies, partnership structures, and their satisfaction in collaborating with companies from developed countries. Although existing studies have historically examined the dyad of strategic alliances from a perspective of developed countries (e.g., the U.S.), our study explores the issue from a perspective of companies in emerging Latin American economies.     

The advent of private equity in Latin America

As an investment banker in London, the author witnessed the massive run-up in Latin American public equities during the early 1990s and began to consider the potential for adapting the European model of development capital to Latin America. The author and a small number of other investors began looking beyond the public equity boom, recognizing that the biggest returns had already been made by local entrepreneurs who had entered the market early. Following in the steps of the local entrepreneurs who had been investing in and turning around local companies for years, the author and other investors established investment funds and sought out privately owned Latin American companies that were either poorly capitalized or mismanaged. In a matter of four years, foreign and indigenous pools of funds dedicated to private, unquoted investments in Latin America has grown from near zero to an estimated $1.5 billion. And the pool continues to grow. The author tracks this investment phenomenon and assesses the prospects for these and future Latin American funds, in light of the economic and political stabilization of many Latin American countries and the ambitious infrastructure development programs across the region.     

International competition in Latin American telecommunications markets

Current market liberalization and reforms in Latin America are attracting a great deal of interest by global telecommunications companies and investors. This article focuses on recent liberalizations and reforms in the telecommunications markets of Chile, Argentina, Mexico, and Venezuela. The article reviews the winning bids for these markets 'and analyzes the strategic alliances of investors, global telecommunications companies, and local investors. The article concludes with an analysis of the experience to date in opening Latin American telecommunication markets to free competition and speculates on future developments in this sector. © 1993 John Wiley & Sons, Inc.     

An analysis of the predictors of software piracy within Latin America

Corruption has become an increasingly salient issue in recent years due to the increasing pressure placed on top management teams of multinational firms to maintain high moral standards in all facets of their operations. The level and scope of corruption in a particular country is worthy of consideration as companies seek potential export markets and global partners. While macro-level academic research related to causes of corruption has burgeoned in the past decade, there is a lack of depth and breadth with respect to corruption research in Latin America. The current study analyzes patterns of software piracy (a notorious type of corruption) for 20 Latin American nations. Results indicate that economic growth, foreign direct investment, Internet usage, and development assistance relate to software piracy rates in Latin America.     

Towards the Latin American Regiocentric Corporation

Abstract

Globalization and regionalism are emerging with force in Latin America and a new breed of Latin American corporations is making its mark in response to this new reality. These corporations are exploiting technology, low costs, and their in-depth understanding of the region's intricate cultural fabric to compete with global firms and become regional players in niches neglected by these powerful rivals. Using the integration-responsiveness framework, this paper describes the evolution and characteristics of regional strategies in selected Latin American companies and speculates on the potential reversal of these strategies as Latin American economies attempt to insulate themselves from the recent international financial crisis.     

Multinational Firms’ Leadership Role in Corporate Social Responsibility in Latin America

This paper explores the commitment to corporate citizenship on the part of the largest U.S.-based multinationals in the emerging market region of Latin America. The websites of the largest U.S.-based firms – according to the 2007 Fortune 500 list – are reviewed and their CSR efforts in Latin America are noted. The firms’ positions on corporate citizenship in Latin America are mapped onto a three-by-three matrix in which firms’ commitment to corporate citizenship ranges from profit-making motivations to a more holistic approach where support for non-profit causes is embraced by the entire firm and implemented at all levels (Marsden, Business and Society Review 105(1), 9–26, 2000). The largest U.S.-based multinationals were selected for this study because of their leadership role and the fact that other firms within their respective industries may seek to emulate the firms’ level of commitment to corporate citizenship. While the matrix can be used to evaluate corporate citizenship efforts in any market – or globally – the emphasis in this study is on Latin America, a region of interest for two reasons: because of the paucity of research on this particular emerging market region as it relates to CSR, and because there is some evidence to suggest that philanthropic initiatives by the region’s wealthy individuals lag behind individual philanthropic efforts in other world regions (Oppenheimer, Latin America’s Rich Should Donate More. McClatchey-Tribune Regional News, 2007). If this is the case, this study aims to identify whether companies are picking up the slack.

“You make a living by what you get; but you make a life by what you give.” Winston Churchill

     

Global business partnering among family-owned enterprises

This article focuses on foreign partnering in the family-owned business sector of a developing economy in Latin America. The article presents a report on four selected Brazilian companies. Following an analysis from a grounded theory perspective, the findings are discussed, and directions for future research are provided.     

Institutional investor heterogeneity and firm valuation: Evidence from Latin America

This article analyses how the corporate valuation of Latin American firms is affected by the presence of a blockholder institutional investor. The study uses a data set of 562 firms from six Latin American countries for the 1997–2011 period. We found that the presence of an institutional investor has a positive effect of 8% on firm value, which increases to 21% for the cases where there is blockholder coalition with an institutional investor. After dividing the sample by investor type, we found that independent institutional ownership implies a positive premium on firms' Tobin's Q, while the presence of a grey investor has a negative effect on firm valuation.     

Unions and Management in Engineering: A Case Study, 1964–79

Britain' direct investment overseas has become the subject of debate. Not only is much more known about British multinationals, but the concepts of investment groups and free-standing companies have further enriched the discussions. This study examines an example of British capital export – to the Brazilian coffee trade before and after the First World War. The case study illustrates the difficulties in developing typologies for direct investment abroad, and it also considers the managerial and organisational problems facing such companies for the businessmen who developed them. Further, the article speculates that the retreat of British commercial enterprise from Latin America before 1914 may have been more selective than was once thought.     

Does Latin America Comprise Transnational ‘Subregions’?

We live in a world of nations, but also one of multi‐nation systems. These systems, or transnational regions, affect global economics, politics and diplomacy. Latin America is a widely recognised and documented transnational region. It contains subregional nation systems that might have all of the characteristics and significance of regions and might also affect the broader integration of Latin America. The author defines regionality on the basis of economic integration and measures it with two methods for Latin America, North America, three Latin American subregional systems and one arbitrarily defined nation system within Latin America. He finds a high degree of integration in Latin America, the Andean nations and the Southern Cone of South America. He finds only a modest degree of integration in North America and not significantly greater integration in South America than in Latin America. The division of Latin America into subregions is consistent with the incidence of sub‐regional trade initiatives in the past two decades and might be at least partly responsible for the limited progress to date towards Latin America‐wide integration. Latin American subregions might now be providing a foundation on which to build regionalism in the future.     

The role of family conglomerates in emerging markets: What Western companies should know

Large, diversified, family‐owned businesses are dominant players in the economies of most emerging markets and can be excellent business partners for Western companies. This article highlights the evolutionary patterns of family conglomerates (FCs) and delineates principal drivers of their growth, expansion, and internationalization. Those aspects of FCs examined in this study include early mover advantages, foreign alliances, competitive market positioning, and diversification. Also discussed are entry‐mode considerations for Western companies contemplating doing business in the fast‐growth markets of East Asia, Latin America, and elsewhere. © 2004 Wiley Periodicals, Inc.     

The concise economic history of Portugal – a comprehensive guide

Most research on British business in Latin America has concentrated on the free-standing companies, such as the railways, which characterised British investment before 1914. Apart from Royal Dutch Shell, the most important new British investments thereafter were manufacturing companies, which steadily increased their presence in the region. Some began to arrive before 1914, but several more made significant investments between the wars, especially in Argentina and Brazil, with a further wave of new investment after 1945. This paper utilises corporate archives, as well as those of the British government and Bank of England, to investigate the financial aspects of their growth. While the provision of finance for fixed investments and working capital was relatively straightforward before World War II, thereafter it became more difficult due to government regulation on both sides of the Atlantic, leading to ingenious solutions to overcome financial challenges.     

How do female entrepreneurs perform? Evidence from three developing regions

Using the World Bank Enterprise Survey data, we analyze performance gaps between male- and female-owned companies in three regions—Eastern Europe and Central Asia (ECA), Latin America (LA), and Sub-Saharan Africa (SSA). Among our findings are significant gender gaps between male- and female-owned companies in terms of firm size, but much smaller gaps in terms of firm efficiency and growth (except in LA). Part of the reason women run smaller firms is that they tend to concentrate in sectors in which firms are smaller and less efficient (in ECA and SSA). By contrast, we find no evidence of gender discrimination in access to formal finance in any of the three regions, although in ECA women are less likely than men to seek formal finance. Finally, while female entrepreneurs receive smaller loans than their male counterparts, the returns from each dollar they receive is no lower in terms of overall sales revenue.     

Distinctive determinant factors of Spanish foreign direct investment in Latin America

This paper is based on an empirical study of 103 Spanish multinational companies that have carried out foreign direct investment (FDI) and analyses to what extent the decision to invest in Latin America responds to factors different from those involved in the decision to invest in other destinations. Rooted in the revised eclectic paradigm of Dunning [Dunning, J. H. (1988). The eclectic paradigm of international production: A restatement and some possible extensions, Journal of International Business Studies, 19: 1–31; Dunning, J. H. (1997). Alliance capitalism and global business. New York: Routledge], the research framework includes three types of factors in a disaggregated way: ownership, internalization and location factors. The results show that, indeed, Spanish FDI in Latin America presents some distinctive features within each group of factors, thus indicating cultural affinity as the most important driver for the selection of this destination.     

Sustainable banking in Latin American developing countries: Leading to (mutual) prosperity

This article examines multinational banks’ (MNBs) approaches to corporate social responsibility (CSR) in developing countries’ subsidiaries, particularly in Latin America. Building on in-depth case studies of two MNBs that are based in Europe and market leaders in Latin America, we analyze their CSR motivations and outcomes in host countries. We examine institutional environments by applying the national business system framework, and we suggest missing categories in its financial and educational dimensions. We theorize how institutional necessity determines MNBs' CSR in developing countries. Finally, we examine the CSR outcomes in Latin America, where banks’ responsible conduct has led to major improvements in educational levels and financial inclusion. These improvements alleviate poverty and enhance both country's social wellbeing and MNBs’ legitimacy, leading to mutual prosperity.     

Common Market—A step towards unification

The focus of the Conference of the Organisation of American States held in April 1967 at Punta del Este was the efforts to achieve the economic integration of South America. The most important item in the “Declaration by the American Presidents” at Punta del Este is the projected creation of a Common Market for the whole of Latin America. The Latin American Free Trade Association (ALALC) and the Central American Common Market (MCC) are to be the foundation for economic integration over a vast area. The statement put out by the Punta del Este Conference is, however, only the first step along the road towards the economic consolidation of South America. It is now up to the Latin American countries to bring true these oft-repeated protestations of Latin American solidarity. All the Latin American countries will have to co-operate purposefully to tackle the tasks ahead of them and they will need the support of the larger industrial nations, particularly the United States. Nothing less than economic collaboration between the countries of the american sub-continent, forgetting all national rivalries, would enable Simón Bolivar's dream of a strong and united Latin America to become a practicable reality. The following contribution discusses the ways and means of Latin American integration, the results achieved hitherio and the prospects for a comprehensive unification of South America—including political unification.     

Impacts of Emerging Asia on African and Latin American Trade: Projections to 2030

Rapid growth in Asia's emerging economies has boosted export earnings of resource‐rich economies over the past decade. Whether or not those high growth rates continue, how will structural changes in Asia alter the relative importance of their imports of primary products? This paper projects production and trade patterns of Africa and Latin America to 2030 under various growth and policy scenarios in Asia, using the GTAP model of the global economy. We compare a projection assuming relatively conservative economic growth in China and India with a projection in which those economies continue to grow rapidly (albeit slower than in the previous decade). We then compare our conservative growth baseline with two alternative scenarios: one assuming Africa and Latin America choose to invest more in public agricultural R&D to take advantage of Asian import growth; the other assuming China and India dampen that import growth by restricting their imports of key food grains (following the historical pattern of economies such as Japan and Korea). The final section summarises the results and draws out policy implications for Latin America and Africa.     

Trade Openness and Income: A Tale of Two Regions

In this paper, we present evidence of the long‐run effect of trade openness on income per worker for two regions that have followed different liberalisation strategies, namely Asia and Latin America. A model that re‐examines these questions is estimated for two panels of Asian and Latin American countries over the 1980–2008 period using a novel empirical approach that accounts for endogeneity as well as for the time series properties of the variables involved. From an econometric point of view, we apply recent panel co‐integration techniques based on factor models that account for two additional elements usually neglected in previous empirical literature: cross‐dependence and structural breaks. The results point to a positive impact of trade openness in both Asia and Latin America although the size is smaller in the second region. We associate this finding with the degree to which trade was managed in both regions of the developing world.     

Strategic management in Latin America: Issues and assessment

This paper summarizes the best papers of the Strategic Management in Latin America (SMLA) conference which took place in January 2009 in Sao Paulo. Within a context of economic crisis that started in 2008 the authors find that the matters of business strategy within Latin America, addressed in the paper of this special issue, are relevant today just as when the authors submitted their papers. The strategic choices made by individual firms independent of the ever changing economic climate in which they find themselves is the key to the firm. The papers in this special issue cover a variety of topics encompassed within the area of strategic management: competitiveness, strategy formulation and execution, functional business disciplines and institutional strength in Latin America.     

Patterns of Economic Interdependence in Latin America

This study investigates business cycle synchronization and transmission patterns among the major Latin American countries and their linkages with the United States and Europe. Correlations, principal components, trade patterns, vector autoregressions, and impulse responses are used to discern the business cycle transmission patterns.

There is moderate evidence of a unique Latin American business cycle and of business cycle transmission among the Latin American economies. Most transmission linkages come from outside Latin America. The European business cycle has a slightly stronger influence upon most Latin American economies than the influence of the US business cycle. Brazil is clearly the most influential Latin American economy in terms of business cycle transmission.