Corporate Internationalization: The effects of the exchange rate on Brazilian outward foreign direct investment

Frederico Turolla and Ronald de Oliveira Concer
Additional contact information
Frederico Turolla: Fundação Getúlio Vargas – SP
Ronald de Oliveira Concer: Escola Superior de Propaganda e Marketing – ESPM

Brazilian Business Review, 2008, vol. 5, issue 1, 35-48

Abstract: This paper presents a quantitative analysis of corporate internationalization in Brazil and tests the hypothesis that the country’s strengthening currency prompted companies to expand abroad. We start with a review of the literature on the main international business approaches and theories, aiming to present the drivers behind the behavior of firms that have followed an internationalization path. We worked with the variables Exchange Rate (FX) and Brazilian Foreign Direct Investment (BFDI). We carried out Granger causality tests using the mentioned variables and found no evidence of the importance of the FX factor as a driver of corporate internationalization in Brazil. We also performed a regression analysis, which showed low significance of the FX variable’s coefficient in explaining BFDI as well. Thus, although the strong exchange rate in Brazil is often blamed for forcing companies to look abroad for investment opportunities, the evidence found in the aggregate data does not validate the initial hypothesis.

Keywords: international business; Brazilian foreign direct investment; exchange rate; corporate internationalization. (search for similar items in EconPapers)
Date: 2008
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://bbronline.com.br/index.php/bbr/article/download/449/680 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bbz:fcpbbr:v:5:y:2008:i:1:p:35-48

Access Statistics for this article

Brazilian Business Review is currently edited by Emerson Mainardes

More articles in Brazilian Business Review from Fucape Business School Fucape Business School Brazilian Business Review Av. Fernando Ferrari, 1358, Boa Vista CEP 29075-505 Vitória-ES. Contact information at EDIRC.
Bibliographic data for series maintained by Sarah Lasso ( this e-mail address is bad, please contact ).