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

Flavia Pereira de Carvalho, Geert Duysters & Ionara Costa

#2010-017

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.

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

JEL Classification: F21, F23, O33

UNU-MERIT Working Papers ISSN 1871-9872

  


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