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Latin American Company Strategies in the Financial Crisis

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  • Robert Grosse

Abstract

This article presents a conceptual basis for developing a corporate strategy to respond to a financial crisis, and an empirical examination of strategic moves undertaken by a number of large Latin American (Mexican) firms during the crisis and subsequent recession. A framework for thinking about this problem is the Cost–Revenue–Risk (CRR) view, 1 which focuses on the firm’s costs, revenues, and risks. This framework is elaborated in the article, and then applied empirically to six companies in Mexico, looking at their responses to the crisis initially and after one year. In addition, the firms listed on the Mexican stock exchange are examined to see if the strategies used by the interview sample also contribute to performance of the larger group of firms—which they do. In the sample of listed Mexican firms, both sectoral diversification and cross-country diversification turned out to be significant contributors to explaining relative firm performance during the crisis.

Suggested Citation

  • Robert Grosse, 2012. "Latin American Company Strategies in the Financial Crisis," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 4(1), pages 55-70, January.
  • Handle: RePEc:sae:emeeco:v:4:y:2012:i:1:p:55-70
    DOI: 10.1177/097491011100400104
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    References listed on IDEAS

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    1. Loderer, Claudio & Waelchli, Urs, 2010. "Firm age and performance," MPRA Paper 26450, University Library of Munich, Germany.
    2. Marianne Bertrand & Sendhil Mullainathan, 2003. "Enjoying the Quiet Life? Corporate Governance and Managerial Preferences," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1043-1075, October.
    3. Chun, Hyunbae & Kim, Jung-Wook & Morck, Randall & Yeung, Bernard, 2008. "Creative destruction and firm-specific performance heterogeneity," Journal of Financial Economics, Elsevier, vol. 89(1), pages 109-135, July.
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    Cited by:

    1. Lu, Jun & Zahedi, Ahmad & Yang, Chengshi & Wang, Mingzhou & Peng, Bo, 2013. "Building the hydrogen economy in China: Drivers, resources and technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 543-556.
    2. Blumenberg, Evelyn & Ralph, Kelcie & Smart, Michael & Taylor, Brian D., 2016. "Who knows about kids these days? Analyzing the determinants of youth and adult mobility in the U.S. between 1990 and 2009," Transportation Research Part A: Policy and Practice, Elsevier, vol. 93(C), pages 39-54.
    3. repec:jle:journl:165 is not listed on IDEAS

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