Emerging economies' multinationals: General features and specificities of the Brazilian and Chinese cases

The expansion of South-North and South-South foreign direct investment (FDI) reflects the rise of cross-border capital flows, a distinguishing feature of the contemporary global economy, together with the increasing size and complexity of emerging market multinational corporations. Against this back...

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Bibliographic Details
Published in:International journal of emerging markets 2010-01, Vol.5 (3/4), p.289-306
Main Authors: Goldstein, Andrea, Pusterla, Fazia
Format: Article
Language:English
Subjects:
Banks
Brazil
Business growth
Capital flow
China
Developing countries
Economic development
Economic growth
Economic reform
Economic statistics
Economic theory
Emerging markets
Foreign direct investment
Foreign investment
Global economy
Globalization
International investment
Investment
LDCs
Multinational corporations
Multinational enterprises
Studies
Transition economies
Trends
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Summary:The expansion of South-North and South-South foreign direct investment (FDI) reflects the rise of cross-border capital flows, a distinguishing feature of the contemporary global economy, together with the increasing size and complexity of emerging market multinational corporations. Against this background, in emerging economies, governments have become increasingly aware of the role outward FDI (OFDI) can play as an instrument to deepen the integration into the world economy. The purpose of this paper is to analyze recent trends in OFDI from Brazil and China. Using annual data for the period 1980-2006 for both countries, the authors test the investment development path hypothesis, according to which the net outward investment position of a country depends on its level of development. Results show that both China and Brazil are moving towards the third stage of the path, where domestic firms have acquired ownership and other advantages to go abroad and become leading outward investors. The role of governments, institutions and the characteristics of domestic firms in both countries are considered to be crucial factors in determining the movement along the path.
ISSN:1746-8809
1746-8817
DOI:10.1108/17468801011058398