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The multinationalization of developing country MNEs The case of…
The multinationalization of developing country MNEs The case of multilatinas
Multilatinas
As the name suggest, are companies initially located in Latin America and already have a large size operating in one or more foreign countries
Advantage on managerial practices and technologies that were welladapted to operating in other developing countries
Based on low-cost labor, and their multinationalization
Based on their exporting advantage on access to natural resources
Insights
Driver
Changes in the international conditions under which they operated
Location
Multilatinas can start in countries that are proximate in culture and development
Multilatinas can start in countries that are distant in culture and development
Multilatinas can start in contries that are culturally proximate but distant in development
Multilatinas can start in countries that are culturally distant but proximate in development
Challenges
The main challege was the long time that took to become MNEs
There was a need of developing sophisticated ownership advantages to multinationalize
Difficulties when the company what to undertake FDI
Lack of knowledge about foreign markets becomes an impediment to the internationalization of the firm
Requires much more detailed and specific knowledge on how to operate across borders, how to compete in the foreign country, and how to operate in a new institutional setting
Be able to transfer productive resources to the country
The company needs to make sure that it can transfer the advantage associated with the resources to the new country
The firm needs to avoid transferring a disadvantage to the new country
Eclectic paradigm of international production
Focuses on the advantages of firms when they move abroad
Argues that the combination of ownership, location, and internalization advantages explains the decision to establish
production subsidiaries abroad
Incremental internationalization model
Also known as Uppsala model
Arguments that becoming a multinational is difficult because of the lack of
knowledge about foreign markets
Start in countries where they face
lower difficulties because the countries are proximate in psychic distance to the home country
Later move into countries where they have higher difficulties because the
firms are more psychically distant