Brazilian Multinationals' Ownership Mode: The Influence of Institutional Factors and Firm Characteristics

Abstract

This work investigates whether host countries institutional factors and firm characteristics can help the understanding of Brazilian multinationals' choices of ownership mode for their foreign direct investments (FDI). Brazil is a privileged locus for research on emerging market multinationals (EMNEs), given its growing stock of outward FDI. The paper contributes to a better understanding of the international strategic choices of EMNEs. First, the phenomenon under study is examined using the theoretical lenses of institutionalism. Second, the study looks at the relationship between state support and choice of ownership mode, a new issue in the area of international business. Third, differences between the decisions taken by manufacturing and service EMNEs are also examined. Fourth, the study focuses on an emerging country, Brazil. The quality of the regulatory environment of the host country, and differences in beliefs, cultural identity and management practices between the host country and the country of origin are factors of the institutional environment significantly related to the choice of ownership mode by Brazilian EMNEs. As to firm characteristics, our results show that state support favors the choice of joint ventures, and that service EMNEs also significantly prefer joint ventures, when compared to manufacturing firms. The findings also support the view that EMNEs are less sensitive to institutional weaknesses in host countries.

Ownership concentration, investor protection and economic performance in public agroindustrial companies with the listing on warsaw stock exchange

“…The ownership structure is seen as one of the most important mechanisms of corporate governance, and it becomes particularly important in conditions characterized by a high degree of ownership concentration (ÁVILA;ROCHA;DA SILVA, 2015;CONNELLY, et al, 2010;DEMSETZ;VILLALONGA, 2001;FACCIO;FILATOTCHEV, et al, 2007;HOLDERNESS, 2017;ILHAN-NAS, et al, 2018;KALEZIĆ, 2015;SHLEIFER, 1999;LEPORE, et al, 2017;MUGOBO;MUTIZE;ASPELING, 2016;VISHNY, 1986;SINGLA;GEORGE;VELIYATH, 2017;STULZ, 2005;SURESHA;RAVIKUMAR, 2018;THOMSEN;PEDERSEN, 2000;VEGA SALAS;DENG, 2017).…”

“…Recently, we witnessed a surge in research from all over the world that are increasingly investigating the impact of ownership structure on the performance of corporations (ÁVILA, et al, 2015;ILHAN-NAS, et al, 2018;KALEZIĆ, 2015;MUGOBO, et al, 2016). A number of those researchers have identified that in many jurisdictions around the world ownership is concentrated (sometimes highly concentrated) in the hands of few -one or more large shareholders (BARCA; BECHT, 2002;LA PORTA, et al, 1999;MAURY;PAJUSTE, 2005).…”