Internationalization and performance: a comparison of Brazilian exporters versus Brazilian multinationals

Abstract

This paper analyzes the relationship between export and the performance of Brazilian companies. To this end, exploratory research was conducted with a sample of 118 out of the 500 largest Brazilian companies. The core hypothesis, which was confirmed, is that there is a positive association between internationalization and performance up to a break point, at which the company becomes a multinational one. Contrary to research carried out in developed countries, the inverted-J curve in the Brazilian case offers an intriguing result, which seems to challenge the ‘related-unrelated market perspective’ applied to export processes, from the cultural distance approach. Our findings show that, from the level of 15% of exports, results increase up to 100%, and that, precisely when the companies start engaging in foreign direct investment (FDI), an inflexion point appears. This corroborates the perception that the main challenge concerns the transition process from export to FDI. One contribution of this paper is data origin. In the literature, it is obvious that researchers have predominantly relied on data from US and European organizations, but it is important to question whether the existing theories also apply to firms from large developing countries such as Brazil.