The role of the State in the internationalization of Latin American firms

Abstract

I examine how different State actions shape the internationalization process of large firms in Argentina, Brazil and Chile. I argue that direct actions produce a more diversified internationalization by sector and a faster internationalization pace. The expansion of large firms abroad occurs through a narrower set of activities when indirect actions prevail. Indirect State actions encourage limited geographical extension and a gradual internationalization pace, producing fewer global leaders. Through an inter-country comparison, I examine direct and indirect policies in two crucial areas for internationalization: the support of national champions and the creation of capital availability. The State-induced internationalization pace influences the global scope of firms, central for understanding the phenomena of multilatinas.