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Drivers of Brazilian foreign investments – technology seeking and technology exploiting as determinants of emerging FDI

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  • Carvalho, Flavia

    ()
    (UNU-MERIT, Maastricht University)

  • Duysters, Geert

    ()
    (UNU-MERIT, Maastricht University, and Eindhoven University of Technology)

  • Costa, Ionara

    ()
    (UNU-MERIT, Maastricht University)

Abstract

The paper uses data from a recent survey on Brazilian firms to investigate the role of technology in the internationalization of firms, and whether if affects the destination of foreign investments. Emerging markets FDI is a much-debated topic these days, and their technology-seeking purpose is a strong driver for the internationalization, as firms are searching for assets in order to compete. We apply a logit model to seek for the influence of determinants and some firms’ competitive advantages on the choice for developed countries as a destination for Brazilian FDI. We also test which modes of entry are preferred when investing in a developed destination. Our results point out the importance of a skilled labor force on the decisions to invest in developed destinations. We found out that technology is an asset used as a competitive resource, and that Brazilian firms do not undertake technology-seeking investments in developed countries, and that acquisitions and Greenfield investments are the main modes of entry.

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Bibliographic Info

Paper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 017.

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Date of creation: 2010
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Handle: RePEc:unm:unumer:2010017

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Related research

Keywords: foreign direct investments; emerging markets; technology; innovation; competitive advantages; multinational corporations;

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  1. John Child & Suzana B. Rodrigues, 2005. "The Internationalization of Chinese Firms: A Case for Theoretical Extension?," Management and Organization Review, International Association of Chinese Management Research, vol. 1(3), pages 381-410, November.
  2. John Dunning, 1981. "Explaining the international direct investment position of countries: Towards a dynamic or developmental approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 117(1), pages 30-64, March.
  3. Shige Makino & Chung-Ming Lau & Rhy-Song Yeh, 2002. "Asset-Exploitation Versus Asset-Seeking: Implications for Location Choice of Foreign Direct Investment from Newly Industrialized Economies," Journal of International Business Studies, Palgrave Macmillan, vol. 33(3), pages 403-421, September.
  4. Roberto Basile & Anna Giunta & Jeffrey B. Nugent, 2003. "Foreign Expansion by Italian Manufacturing Firms in the Nineties: an Ordered Probit Analysis," Industrial Organization 0312001, EconWPA.
  5. J. Hatzius, 1997. "Foreign direct investment," LSE Research Online Documents on Economics 20351, London School of Economics and Political Science, LSE Library.
  6. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 481-498, July.
  7. Li, Peter Ping, 2007. "Toward an integrated theory of multinational evolution: The evidence of Chinese multinational enterprises as latecomers," Journal of International Management, Elsevier, vol. 13(3), pages 296-318, September.
  8. John H Dunning, 1998. "Location and the Multinational Enterprise: A Neglected Factor?," Journal of International Business Studies, Palgrave Macmillan, vol. 29(1), pages 45-66, March.
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Cited by:
  1. Sanfilippo , Marco, 2013. "Investing abroad from the bottom of the productivity ladder – BRICS multinationals in Europe," BOFIT Discussion Papers 26/2013, Bank of Finland, Institute for Economies in Transition.
  2. Pradhan, Jaya Prakash & Singh, Neelam, 2010. "Group Affiliation and Location of Indian Firms’ Foreign Acquisitions," MPRA Paper 24018, University Library of Munich, Germany.

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