A third wave of FDI from developing countries. Latin American multinationals in the 1990s

DANIEL CHUDNOVSKY; ANDRÉS LÓPEZ

Transnational Corporations

UNCTAD

Año: 2000

1014-9562

Since the early 1990s, a third wave of foreign direct investment from Latin American countries has emerged. Argentina, Chile and Mexico and, to a lesser extent, Brazil, are the most important home countries. The bulk of current Latin American outward foreign direct investment is market seeking and is concentrated in other Latin American countries. However, contrary to what happened during the first wave of foreign direct investment from developing countries in the 1960s and 1970s, which occurred under import substitution, Latin American transnational corporations must now operate in open economies. This has resulted in a far-reaching restructuring of Latin American conglomerates. Nonetheless, this is a fragile phenomenon because of the relatively small size of the firms involved, because they are mostly specialized in mature industries, and because of the relative technological underdevelopment of their home economies. This explains why, unlike in outward foreign direct investment from Asian developing countries, there are very few Latin American transnational firms operating in high-technology industries.