OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
About us
A Research Center which seeks to generate and
disseminate knowledge about internationalization
process of Brazilian firms.
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Products
• Scanning of Brazilian Direct Investment abroad
• Benchmarking of management practices
• Diagnostic tools
• Market index
• Courses for foreign students
• Academic research
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Managerial Reports
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Website (Dataset)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Quem somos?
O Observatório de Multinacionais Brasileiras da ESPM é um Think Tank que busca influenciar as transformações científicas, econômicas, políticas e gerenciais por meio da geração e difusão de conhecimento sobre a competitividade internacional de empresas brasileiras.
Monitoring Brazilian FDI in LA
Research Design
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Overview
The study aims to understand the profile of Brazilian
firms investing in Latin America and the characteristics
of host-countries business environment
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Methodology
Data was collect from multiple sources
Firm-level: primary surveys; open and private databases;
firms’ websites; academic publications; and media
Host country-level: World Bank Indicators; Heritage
Foundation; World Economic Forum; Global
Competitiveness Report among others
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Sample
Composed by 449 Brazilian subsidiaries scattered across
16 Latin American countries in different industry sectors
from 1969 to 2014
The sample comprehends operations such as overseas
sales offices, distribution centers and industrial plants
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Quem somos?
O Observatório de Multinacionais Brasileiras da ESPM é um Think Tank que busca influenciar as transformações científicas, econômicas, políticas e gerenciais por meio da geração e difusão de conhecimento sobre a competitividade internacional de empresas brasileiras.
Prime Outcomes (Firm-level)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
FDI Location # COUNTRY %
1 Argentina 30,07%
2 Mexico 14,03%
3 Chile 11,36%
4 Colombia 10,47%
5 Peru 9,13%
6 Uruguay 8,24%
7 Venezuela 4,90%
8 Bolivia 3,34%
9 Paraguay 3,12%
10 Ecuador 2,45%
11 Costa Rica 0,89%
12 Puerto Rico 0,67%
13 Dominican Republic 0,45%
14 Panama 0,45%
15 Cuba 0,22%
16 El Salvador 0,22%
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Largest Firms in LA # Company
Number
of
foreign subsidiaries
Countries
1 Petrobras 29
Argentina, Bolivia, Chile, Colombia, Ecuador,
Mexico, Peru, Uruguay, Venezuela
2 Camargo Correa Contrutora 17
Argentina, Bolivia, Chile, Colombia, Paraguay,
Peru, Venezuela
3 Ibope 17
Argentina, Chile, Colombia, Costa Rica,
Ecuador, Mexico, Panama, Paraguay, Peru,
Puerto Rico, Uruguay, Venezuela
4 Gerdau 16
Argentina, Chile, Colombia, Mexico, Peru,
Uruguay, Venezuela
5 Marfrig 16 Argentina, Chile e Uruguay
6 Odebrecht Construtora 15
Argentina, Bolivia, Chile, Colombia, Mexico,
Paraguay, Peru, Uruguay, Venezuela
7 Natura 14
Argentina, Chile, Colombia, El Salvador,
Mexico, Peru, Venezuela
8 Vale 12
Argentina, Chile, Colombia, Paraguay, Peru,
Uruguay
9 Weg 11
Argentina, Chile, Colombia, Mexico,
Venezuela
10 Artecola 10 Argentina, Chile, Colombia, Mexico, Peru
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Industrial Sector
Most part of manufacturing firms produce low value-added products
Primary 19%
Manufacturing 48%
Services 33%
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Industry vs. Year of Entry
In the last years, IT companies are looking for
more cost effective countries
Antes de 1989
1990 - 1999
2000 - 2004
2005 - 2009
2010 - 2014
4
11
9
52
8
10
45
42
98
23
10
37
23
62
15
Service
Manufacturing
Primary
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Firms’ Age
New Born: Less than 10 years old
Young: Between 10 and 19 years old
Mature: Over than 20 years old
89%
New Born 61%
Young 28%
Mature 11%
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Entry Mode
Historically, Greenfield investments are the
favorite ones
Greenfield 60%
Acquisition 31%
IJV 9%
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Entry Mode vs. Year of Entry
But this has been changing in the last years
Antes de 1989
1990 - 1999
2000 - 2004
2005 - 2009
2010 - 2014
21
68
50
120
10
1
17
18
76
29
2
8
6
15
7
IJV
Acquisition
Greenfield
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Entry Mode vs. Industry
Services: preference for Greenfield
Manufacturing: preference for Greenfield
Primary: preference for Acquisitions
Greenfield
Acquisition
IJV
43%
51%
6%
62%
31%
7%
66%
21%
13%
Service
Manufacturing
Primary
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Quem somos?
O Observatório de Multinacionais Brasileiras da ESPM é um Think Tank que busca influenciar as transformações científicas, econômicas, políticas e gerenciais por meio da geração e difusão de conhecimento sobre a competitividade internacional de empresas brasileiras.
Prime Outcomes (Host Country-level)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Market Attractiveness Country
Millions Ranking % Ranking $ Ranking
Argentina 41,803,125.0 3 0.5 13 12,922.4 4
Bolivia 10,847,664.0 9 5.4 3 3,150.5 14
Chile 17,772,871.0 6 1.9 12 14,520.0 3
Colombia 48,929,706.0 2 4.6 4 7,720.0 8
Costa Rica 4,937,755.0 13 3.5 7 10,035.4 7
Cuba 11,258,597.0 8 n.a n.a n.a n.a
El Salvador 6,383,752.0 12 2.0 11 3,950.7 13
Ecuador 15,982,551.0 7 3.8 6 6,290.8 10
Mexico 123,799,215.0 1 2.1 10 10,361.3 6
Panama 3,926,017.0 14 6.2 2 11,770.9 5
Paraguay 6,917,579.0 11 4.4 5 4,479.1 12
Peru 30,769,077.0 5 2.4 9 6,594.4 9
Puerto Rico 3,548,397.0 15 n.a n.a n.a n.a
Dominica Republic 10,528,954.0 10 7.3 1 6,075.5 11
Uruguay 3,418,694.0 16 3.5 8 16,810.9 1
Venezuela 30,851,343.0 4 -4.0 14 16,529.7 2
POPULATION5 YEAR GDP
GROWTH (%)GNI PER CAPITA
Source: World Bank (2015)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Total Tax Rate (% of commercial profits)
# COUNTRY%
Brazilian FDITAX RATE
Argentina 30,07% 137,30%
Bolivia 3,34% 83,70%
Colombia 10,47% 75,40%
Mexico 14,03% 51,80%
Peru 9,13% 36,00%
Paraguay 3,12% 35,00%
Ecuador 2,45% 33,00%
Chile 11,36% 27,90%
The tax rate average in Brazil is 69%. In LA the average is 55,38%
Source: World Bank (2015)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Trade Tariffs
Bellow Average
102 Foreign Subsidiaries
Above Average
335 Foreign Subsidiaries
FDI Location
Puerto Rico (1,3%)
Peru (1,8%)
Costa Rica (3,9%)
FDI Location
Venezuela (12,4%)
Argentina (10,5%)
Bolivia (8,8%)
Average
6,43%
Source: WEForum (2015)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Strenght of Investor Protection
Bellow Average
216 Foreign Subsidiaries
Above Average
221 Foreign Subsidiaries
FDI Location
Venezuela (2,3)
El Salvador (3,0)
Costa Rica (3,0)
FDI Location
Colombia (8,3)
Peru (7,0)
Puerto Rico (7,0)
Average
5,2
Source: WEForum (2015)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Quality of Infrastructure Bellow Average
280 Foreign Subsidiaries
Above Average
157 Foreign Subsidiaries
FDI Location
Venezuela (2,6)
Paraguay (2,7)
Argentina (3,0)
FDI Location
Panama (5,0)
Puerto Rico (4,9)
Chile (4,7)
Average
3,82%
Source: WEForum (2015)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Corruption Bellow Average
353 Foreign Subsidiaries
Above Average
93 Foreign Subsidiaries
FDI Location
Venezuela (16,5)
Paraguay (20,5)
Dominican Republic (27,3)
FDI Location
Chile (72,3)
Uruguay (70,6)
Costa Rica (50,9)
Average
36,54
Source: Heritage Foundation (2015)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Capacity for Innovation Bellow Average
427 Foreign Subsidiaries
Above Average
10 Foreign Subsidiaries
FDI Location
Venezuela (2,8)
Paraguay (3,1)
Peru (3,4)
FDI Location
Puerto Rico (4,9)
El Salvador (4,4)
Costa Rica (4,3)
Average
3,74
Source: WEForum (2015)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Highlights
– 55 % of Brazilian FDI in LA are located in
higher economic development level
countries (by income). E.g.: Chile (11%)
– Only 4% of Brazilian FDI in LA are located in
lower economic development level countries
(by income)
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Highlights
– 60% of Brazilian FDI are located in countries
with lower level of Political Risk than Brazil
– Inflation average in LA countries is 8,55% vs.
7,7% in Brazil
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Highlights
Most part of Brazilian FDI in LA are located in:
Largest consumer markets,
Higher tax rates,
Poor infrastructure,
Poor capacity for innovation,
Higher corruption level.
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Quem somos?
O Observatório de Multinacionais Brasileiras da ESPM é um Think Tank que busca influenciar as transformações científicas, econômicas, políticas e gerenciais por meio da geração e difusão de conhecimento sobre a competitividade internacional de empresas brasileiras.
Conclusions
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Research and Empirical Gaps
– What is the real importance of institutions in the
internationalization process of Brazilian firms?
– Which criteria are behind the entry mode choice of
Brazilian multinationals (managerial mindset)?
OBSERVATÓRIO DE MULTINACIONAIS BRASILEIRAS DA ESPM
BRAZILIAN MULTINATIONALS OBSERVATORY
Contact
Gabriel Vouga Chueke
Website
observatorio.espm.br