Familiarity and the Multinational Corporation in Latin America: Acceptance or Contempt?

Abstract

One cannot help but ask, “Are international businesses, like the fabled Don Quixote, making dragons of windmills?” We have seen a great rise in international business investment. We have also seen a corresponding rise in business attempts to prevent an awareness by local nations of this increased foreign investment. The general feeling is that increased awareness will lead to greater resentment. The question, however, has not been directly asked: What happens to the evaluation of foreign firms in a specific setting in Latin America as the rate of foreign investment climbs and is more keenly perceived? In an attempt to determine if we are realistically assessing the situation in Latin America, a study was conducted in four Central American countries: El Salvador, Honduras, Nicaragua, and Costa Rica. These countries were selected because they have been among the rapidly developing countries of Latin America since the formation of the Central American Common Market (CACM) in the early 1960s, receiving considerable foreign investment.