Becoming a Multilatina: strategic capabilities as necessary conditions for the internationalization of Latin American firms

Abstract

Purpose

This study aims to challenge the generic interpretation of Multilatinas as Latin American firms that have been able to internationalize because of highly competitive strategic capabilities. The authors test whether capabilities that international business researchers commonly associate with internationalization are necessary at different stages of the internationalization process to better understand the extent to which emerging market (EM) firms need to develop them.

Design/methodology/approach

International business research suggests a positive association between strategic capabilities and firm internalization. However, it remains unclear what specific capabilities are necessary and when they are necessary. These questions are particularly important in the context of the internationalization of firms from emerging economies, such as Latin America. The authors apply necessary condition analysis (NCA) on a sample of Latin American firms at different internationalization stages to test what strategic capabilities represent necessary conditions for becoming a Multilatina.

Findings

The findings suggest that only a few strategic capabilities are necessary for Latin American firms to become “Multilatinas”. While entrepreneurial orientation and marketing and sales capabilities represent necessary conditions, EM firms may internationalize even though other capabilities are developed to a lesser extent. The authors reflect on how shifts in local markets and technology drive the emergence of different types of Multilatinas.

Research limitations/implications

Measuring strategic capabilities across multiple EM firms implies a risk that firm-specific aspects are not fully captured. While the authors focused on the comparative competitive strength of capabilities and took great care to minimize measurement error, the authors acknowledge possible bias. Also, while NCA does not require a minimum sample size, findings from our sample of firms from four countries may not generalize to the region or other EMs.

Originality/value

As a relatively new statistical technique, the use of NCA has spread rapidly. To the best of the authors’ knowledge, the linkage between organizational capabilities and firm internationalization has not been tested from a necessary conditions perspective yet. The reflections on the “Multilatina” concept based on the notion of EM firms as configurations of strategic capabilities inform current debates on EM multinational enterprises.

Citation

Hermans, M., Borda, A., Newburry, W., Cordova Chea, C.O., Finchelstein, D., Gonzalez-Perez, M.A., Montoya-Bayardo, M.A., Velasco, G. and Velez-Ocampo, J. (2024), "Becoming a Multilatina: strategic capabilities as necessary conditions for the internationalization of Latin American firms", European Business Review, Vol. 36 No. 1, pp. 50-70. https://doi.org/10.1108/EBR-02-2023-0040