Report on Brazilian Multinationals

Two important academic Brazilian institutions, the University of São Paulo (USP) and Fundação Getúlio Vargas (FGV), published a few weeks ago a report about the strategies used by Brazilian multinationals. The study was a result of a research project which goal was to understand how Brazilian companies are conducting their international expansion.

As the project’s focus is both practical and academic, the authors divided the answers according to the main motivating factors for internationalization, namely: access to (new) markets; access to technology & knowledge; access to resources and proximity to customer, suppliers and partners.

Analysis of results

Figure 1 presents the results for the motivating factors for internationalization of Brazilian companies. Chart importanceFIGURE 1: FACTORS FOR INTERNATIONALIZATION (SOURCE: GINEBRA, 2015)

The results show that the most important driving forces to internationalization are the access to technology & knowledge and the access to resources aimed at optimization of efficiency. Additionally, the survey also shows that access to markets and proximity to customers, suppliers and partners are the least important motivators for the internationalization of Brazilian companies.

The high relevance of the access to technology reflects the view that Brazilian multinationals recognize the existing gap in relation to the most advanced technologies and the most dynamic markets. The authors also argue that the operational mode for international expansion has been the acquisition of other companies based on developed markets, in order to reduce the technological gap in relation to the most demanding customers.

Access to markets and proximity to customers, suppliers and partners are the least important factors for Brazilian multinationals. The results also show that only few multinationals sell directly to the international markets, which means that Brazilian firms are, in general, suppliers of inputs for various industries. Thus, an important part of Brazilian multinationals presents some kind of global production chain.

Brazilian Multinationals vs. Innovation

Approximately 40% of Brazilian multinational believe that innovation is key to obtain cost reduction, therefore innovation becomes and important piece in their technology strategy. This outcome is interesting because other reports also indicate that innovation in process is often considered one of the key strengths in Brazilian corporations.

Internationalization strategies

The competitive strategies most commonly found among brazilian multinationals are: Global Consolidator  and Global Partners. Companies in these two categories are part of international supply chains of goods and/or services, which results that Brazilian companies are often suppliers of input or parts of more complex products. This result is consistent with previous researches developed by of the authors. Table 1 below shows the distribution of Brazilian multinationals in the five categories of international strategies of multinational companies.



The articles “Five internationalization strategies of multinationals from emerging markets” and “Country of Origin Effects and their impact on multinational from emerging markets” explain each of the categories identified above and the concept of effect of countries of origin and their impact on Brazilian multinationals.


The picture presented by the current research shows that significant changes have occurred in the group formed by Brazilian multinationals, namely:

  1. The number of Brazilian multinationals increased in the three economic sectors, but growth was most remarkable in the service sector. Although the total number of Brazilian multinationals is still modest compared to the number of multinationals from other emerging countries, the expansion observed seems to reveal that internationalization is being increasingly accepted by the local, native firms.
  2. Decisions for internationalization are taken individually, with few actions of encouragement and support from the local government, which is a marked contrast with the scenario found in other countries. For instance, internationalization of Chinese companies is part of a country-level strategy for international trade and foreign policy.
  3. The political and economic crisis that currently affects Brazil may become a motivator for internationalization of Brazilian firms.
  4. The observed strategies reveal that companies seek to enter and expand in international markets in order to consolidate positions in global value chains rather than to advance within the chains. In other words, Brazilian multinationals seek to strengthen current position in industries in which they are already strong. According to the authors, this strategy is different from the ones seen in other emerging countries, especially China, whose companies are making acquisitions to advance technologies and businesses in which they had no previous experience.

Authors on internationalization (Casanova,   Fleuryshow that the Brazilian multinationals are few and small compared with similar companies in other emerging countries. The psychic distance of Brazilian companies, inadequate infrastructure, and biased government support to the finger-pointed companies – the so called “national champions”, are explanations to the low degree of internationalization of Brazilian companies.

As usual, here comes a question for the restless minds:

Which Brazilian companies will continue their internationalization processes despite the current political and economic crisis?


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