A comparative analysis of the internationalization of sub-national and central state-owned enterprises: shreds of evidence from Latin America

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Finchelstein, Diego
González-Pérez, María Alejandra
Salvaj, Erica
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Purpose In this exploratory multiple case study, we aim to compare the internationalization of two state-owned enterprises (SOEs) owned by subnational governments with three owned by central governments in Latin America. This study provides a contextualized answer to the question: What are the differences in the internationalization of subnationally owned SOEs compared to central SOEs? This study finds that the speed and diversification of these two types of SOEs’ internationalization differ because they have a different expansion logic. Subnationally owned SOEs have a gradual and diversified expansion following market rules. Central government’s SOEs are specialized and take more drastic steps in their internationalization, which relates to non-market factors. Design/methodology/approach This study builds an exploratory qualitative comparative case analysis that uses multiple sources of data and information to develop a comprehensive understanding of SOEs through process tracing. Findings The study posits some assumptions that are confirmed in the case analysis. This study finds relevant differences between sub-national (SSOEs) and central authority (CSOEs’) strategies. SSOEs’ fewer resources and needs to increase income push them to follow a gradual market-driven internationalization and to diversify abroad. CSOEs non-gradual growth is justified by non-market factors (i.e. national politics). CSOEs do not diversify abroad due to the broader set of constituencies they have to face. Research limitations/implications Given the exploratory comparative case study of this research, the findings are bounded by the particularities of the cases and their region (Latin America). This paper and its findings can be useful for theory building but it does not claim any generalization capacity. Originality/value This study adds complexity into the SOEs phenomenon by distinguishing between different types of SOEs. This paper contributes to the study of subnational phenomena and its effect in SOEs’ internationalization process, which is an understudied topic. To the authors’ best knowledge, this is among the first studies that explore subnational SOEs in Latin America.
Palabras clave
Internationalization , State-owned enterprises , Subnational institutions , Diversification , Strategy , Latin America , Emerging markets multinationals , Emerging markets
Citation Finchelstein, D., Gonzalez-Perez, M.A. and Salvaj, E.H. (2021), "A comparative analysis of the internationalization of sub-national and central state-owned enterprises: shreds of evidence from Latin America", Multinational Business Review, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MBR-05-2020-0117