Abstract
PurposeIn this exploratory multiple case study, we aim to compare the internationalization of two state-owned enterprises (SOEs) owned by subnational governments with three owned by central governments in Latin America. This study provides a contextualized answer to the question: What are the differences in the internationalization of subnationally owned SOEs compared to central SOEs? This study finds that the speed and diversification of these two types of SOEs’ internationalization differ because they have a different expansion logic. Subnationally owned SOEs have a gradual and diversified expansion following market rules. Central government’s SOEs are specialized and take more drastic steps in their internationalization, which relates to non-market factors.Design/methodology/approachThis study builds an exploratory qualitative comparative case analysis that uses multiple sources of data and information to develop a comprehensive understanding of SOEs through process tracing.FindingsThe study posits some assumptions that are confirmed in the case analysis. This study finds relevant differences between sub-national (SSOEs) and central authority (CSOEs’) strategies. SSOEs’ fewer resources and needs to increase income push them to follow a gradual market-driven internationalization and to diversify abroad. CSOEs non-gradual growth is justified by non-market factors (i.e. national politics). CSOEs do not diversify abroad due to the broader set of constituencies they have to face.Research limitations/implicationsGiven the exploratory comparative case study of this research, the findings are bounded by the particularities of the cases and their region (Latin America). This paper and its findings can be useful for theory building but it does not claim any generalization capacity.Originality/valueThis study adds complexity into the SOEs phenomenon by distinguishing between different types of SOEs. This paper contributes to the study of subnational phenomena and its effect in SOEs’ internationalization process, which is an understudied topic. To the authors’ best knowledge, this is among the first studies that explore subnational SOEs in Latin America.
Highlights
While there has been a great interest in private firms’ internationalization, the international expansion of state-owned enterprises (SOEs) has recently called global attention
It attempts to contribute to the specific characteristics and reasons behind stateowned enterprises (SOEs) international strategy
Much has been written about this phenomenon concerning the ownership level in the internationalization of SOEs (Mariotti and Marzano, 2020; Musacchio and Lazzarini, 2014; Liang et al, 2015; Kalasin et al, 2020) but limited attention has been paid to the type of state ownership (Li et al, 2014)
Summary
While there has been a great interest in private firms’ internationalization, the international expansion of state-owned enterprises (SOEs) has recently called global attention. Almost a quarter of the firms in the 2019 Fortune Global 500 Ranking firms had complete or partial state ownership (Casanova et al, 2021). This group has several firms from China and others from the Middle East, Europe and Latin America. The relation between the international strategy of emerging markets firms and the state has recently reached more attention (Cuervo-Cazurra, 2018a; Grosman et al, 2016; Finchelstein, 2017; Lazzarini et al, 2020; Musacchio et al, 2015; Nuruzzaman et al, 2020). Within this area of study, there is a growing literature on multinationals owned by the state (Benito et al, 2016; Cuervo-Cazurra et al, 2014; Cuervo-Cazurra 2018b; Estrin et al, 2016; Kalasin et al, 2020; Li et al, 2017; Heugens et al, 2019; Musacchio and Lazzarini, 2018; Tihanyi et al, 2019; Velez-Ocampo et al, 2017)
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