Institutional Theory, Membership in Business Groups and the Internationalization of Brazilian Multinationals

This article looks at the reasons for the rapid rise of emerging country multinationals (EMNCs) in the global competitive landscape, despite their ‘late mover' status. We identify two predominant factors in the rise of these companies: the influence of the institutional environment on the development of EMNCs competencies and the relevance of the economic liberalization process that occurred in emerging countries; the positive effects on performance of their affiliation with conglomerates or other business groups that provide resources and international experience. A further line of argument in the literature stresses that traditional theories of internationalization, notably the Uppsala model and the eclectic paradigm, have proved inadequate to explain the new expansion dynamic represented by the rise of EMNCs. To prove the above we interviewed executives from ten Brazilian companies. The companies were chosen from the Global Challengers reports prepared by the Boston Consulting Group, which ranks the top 100 ‘challengers' from emerging countries on the basis of their performance and/or perspectives for rapid international growth. The interviews were designed to check whether the suggestions in the literature were corroborated by the actual internationalization experience of the selected companies. Using content analysis to assess the interview results appeared to confirm some issues raised in the literature in the sense that an initial focus on the internal market and a lack of planning of internationalization initiatives had delayed international expansion by Brazilian firms