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East Asian, European, and North American Multinational Firm Strategies in Latin America

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  • Casanova Lourdes

    (INSEAD)

Abstract

Over the past decade, multinationals (MNCs) have followed three main objectives while entering Latin America: efficiency seeking, growth seeking, and resource seeking. Efficiency seeking MNCs aim to reduce costs in their global production process through access to cheaper labor, and proximity to destination markets such as the United States. Growth seeking firms enter Latin American markets to grow and/or acquire new markets. They are by nature more dependent on the macroeconomic conditions in local markets for their success. Resource seeking firms enter Latin America in the search of minerals, metals, and hydrocarbons. This paper introduces the concept of "natural markets" to explain the relative successes of MNCs from different regions - Europe (mainly Iberian), USA, and Asia. Natural markets' for a MNC are defined as those markets sharing a common history or language or having a high level of physical proximity with the country of origin of the MNC. This paper proposes that a firm focusing on natural markets has a comparative advantage, and thus increases the probability of its success. The paper also draws upon the experiences of successful MNCs in Latin America to infer some lessons for East Asian MNCs wishing to operate in the region.

Suggested Citation

  • Casanova Lourdes, 2004. "East Asian, European, and North American Multinational Firm Strategies in Latin America," Business and Politics, De Gruyter, vol. 6(1), pages 1-40, May.
    • Handle: RePEc:bpj:buspol:v:6:y:2004:i:1:n:6
    DOI: 10.2202/1469-3569.1074
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    Cited by:

    1. repec:idb:brikps:373 is not listed on IDEAS
    2. Alexander Libman & Evgeny Vinokurov, 2011. "Is it really different? Patterns of regionalisation in post-Soviet Central Asia," Post-Communist Economies, Taylor & Francis Journals, vol. 23(4), pages 469-492, June.
    3. Md Nur Alam Siddik, 2017. "Determinants of International Competitiveness of SMEs in a Developing Economy: Evidence from Bangladesh," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(1), pages 266-266, December.

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