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Latin American firms competing in the global economy
Journal of Business Research 67 (2014) 831–836
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Journal of Business Research
Latin American firms competing in the global economy Jorge Carneiro a,⁎, Esteban R. Brenes b a b
Pontifical Catholic University of Rio de Janeiro (PUC-Rio), Rua Marquês de São Vicente, 225, Rio de Janeiro, RJ 22280-030, Brazil INCAE Business School, La Garita, Alajuela, Costa Rica
a r t i c l e
i n f o
Article history: Received 1 January 2013 Received in revised form 1 May 2013 Accepted 1 June 2013 Available online 25 July 2013 Keywords: Latin America Internationalization Strategy BALAS conference
a b s t r a c t As part of a cooperative effort between the Journal of Business Research (JBR) and the Business Association of Latin American Studies (BALAS), this special issue brings updated research on the Latin American business environment. Out of 226 papers submitted to the BALAS 2012 conference, which was hosted by the Pontifical Catholic University of Rio de Janeiro (PUC-Rio), 22 were pre-selected to run for publication in this special issue — and only 14 actually were accepted after the demanding three rounds of a double blind review process that was run after the conference. This introduction to the special issue of the JBR on the BALAS 2012 conference brings an overview of the changes that have taken place in the business environment of Latin America, the evolution of the internationalization behavior of Latin American firms and the changes in their strengths to compete both domestically and abroad. © 2013 Elsevier Inc. All rights reserved.
1. Introduction This JBR special section is the result of a cooperative relationship between the Journal of Business Research (JBR) and the Business Association of Latin American Studies (BALAS) and features the best papers of BALAS 2012 conference, hosted by PUC-Rio in Rio de Janeiro. BALAS (www.balas.org) is an academic organization focusing on management research in Latin America and has over 500 members from all over the region and also outside Latin America. Although Latin America has relevant participation in the world economy and three of its countries figure among the world's thirty largest by GDP (Brazil as 6th, Mexico as 14th and Argentina as 25th, cf. World Bank, 2012), Latin America has been a neglected region in management literature and Latin American researchers publish little (Pérez-Batres, Pisani, & Doh, 2010). In fact, “In the first half of this decade [2000s], less than 3% of IB articles dealt specifically with Latin America” (Pérez-Batres et al., 2010:3). Fastoso and Whitelock (2011:436) contend that Latin America “has largely been neglected both in the international business and marketing areas,” a complaint also voiced by Samiee and Athanassiou (1998) more than 15 years ago as well as by other more recent studies (e.g., Birnik & Bowman, 2007; Fastoso & Whitelock, 2007). According to JBR's Associate Editor Sergio Biggemann, this picture has changed very little and as of today only “3.93% of publications in IB Journals and the Journal of Business Research are from Latin American authors or about a Latin American company” (Biggemann, 2013:3). The cooperation between BALAS and the JBR is contributing to bridge this gap: The JBR has already published seven special issues on
⁎ Corresponding author. E-mail addresses: [email protected] (J. Carneiro), [email protected] (E.R. Brenes). 0148-2963/$ – see front matter © 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.jbusres.2013.07.001
Latin America, while another one (related to the BALAS 2011 conference) is under way, besides the present one; all papers in these special issues focus on Latin American firms and environment, and the majority was written by Latin American researchers: • Vol.38, No1 (1997) — New International Enterprise in Latin America • Vol.50, No.1 (2000) — Case Studies on the New Global Strategies of International Business in Latin America • Vol. 59, No.11 (2006) — Strategic Management in Latin America • Vol.62, No.9 (2009) — Special Issue on BALAS (Business Association for Latin American Studies) • Vol.64, No.3 (2011) — Strategic Management in Latin America: Issues and Assessment • Vol.65, No.12 (2012) — Best Papers Business Association of Latin American Studies 2010 • Vol.66, No.3 (2013) — Advances in Business Research in Latin America Studies The BALAS 2012 conference was hosted by IAG Business School of the Pontifical Catholic University of Rio de Janeiro (PUC-Rio, www. iag.puc-rio.br). A total of 226 papers were submitted to the conference, of which 122 (54%) were accepted for presentation and 94 were actually presented. Of the papers presented, 22 were pre-selected to run for publication in this JBR special issue, based on their quality and relevance to management literature and to the Latin American business environment. The pre-selection process was based on comments and rankings by the conference reviewers and track chairs and also on the comments and feedback received from session moderators and BALAS Executive Committee members. The pre-selected papers underwent two rounds of a double blind review process, by two experienced independent reviewers each, plus a final round of reviews by the two guest editors.
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This intense interaction between authors, reviewers and editors makes us confident that the final selection of 14 papers (out of the 22 initially pre-selected and the 94 presented at the conference) for this special issue will make a relevant contribution to literature and management practice. This introductory paper presents threats and opportunities faced by Latin American firms competing in the global economy. We start with an overview of the changes in the economic and political environment of Latin America, then discuss aspects of the internationalization behavior of Latin American firms, and finally address some changes firms have made in order to compete in the global economy. At the end, we introduce each of the papers included in this special issue and give a special “thank you” to the 44 expert reviewers who participated actively and insightfully in the double blind review process. 2. Changes in the economic and political environment of Latin America Latin America is facing major economic and political changes. In fact, over the last few years it has been one of the most dynamic economies in the world, growing on average 6.3% per year between 2009 and 2012, exceeding the average global growth of 5.7% for the same period (International Monetary Fund [IMF], 2013). Inward foreign direct investment in Latin America in 2011 was $ 169.1 billion (World Bank, 2012), which amounts to an annual compound increase of 16.3% per year since 2009. Politically, the region has become polarized insofar as some countries are clearly democratic whereas others have long-lived populist and dictatorial practices. Unfortunately this state of affairs has resulted in some countries not having taken full advantage of economic opportunities, thus undermining their growth potential. Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Guatemala, Mexico, Panama, Paraguay, Peru and Uruguay all exemplify free-market economies. On the other hand, Argentina, Bolivia, Ecuador, El Salvador, Honduras, Nicaragua and Venezuela tend to show economic protectionism and political populism. The former countries are growing at a greater average rate than the latter. However, Ecuador and Nicaragua, although not among the free market examples and with an uncertain political climate going forward, are growing at a good pace and generally have good development prospects for a medium term. The overall business environment for entrepreneurs in Latin America remains a major challenge. There are problems in terms of infrastructure and excessive bureaucracy. Companies in the region still have to deal with several obstacles to competitiveness, such as poor infrastructure and expensive logistics, cumbersome government bureaucracy and procedures, high electricity costs (with frequent outages), limited supply of trained professionals, illiquidity of capital markets and political and economic uncertainty in some countries (Brenes & Haar, 2012). Although the recent and intense rise of the middle class (notably, in Brazil and Peru, but also in some other Latin American countries) has laid way to opportunities for sales and profits in the domestic Latin American markets, challenges remain as regards marketing, logistics, financing and infrastructure in order to properly cater to the needs and particular buying behavior of this new upcoming consumer. 3. Internationalization of Latin American firms Around twenty years ago, Latin American companies still operated mainly in their domestic markets. Today, many have succeeded in expanding into the region and beyond. Over the last 10 years or so, significant changes have taken place at the firm level as a result of new domestic and international growth strategies and due to fierce competition from abroad. Competition in the region is growing more intense, not only due to local firms' interests in exploiting the growth of the economy
and the middle class, but especially since many global companies are looking for growth paths in emerging markets in view of the crisis they are currently facing in the developed world. The recent expansion of Brazilian firms is particularly interesting. Although Brazilian firms have, in general, been late entrants to the international arena (Fleury & Fleury, 2009), they seem to be catching up and some have even become global champions (Carneiro, 2012). Three main deterrents have until recently contributed to the low level of internationalization of Brazilian firms (Da Rocha, 2003; Da Rocha & Da Silva, 2009; Da Rocha, Da Silva, & Carneiro, 2007): lack of firm-specific advantages, rupture of the establishment chain (cf. Johanson & Vahlne, 1977), and absence of a global mindset. The lack of firm-specific advantages was due mainly to institutional disincentives (e.g., political instability) and environmental turbulence and to the possibility of catering to a large and (in the past) protected domestic market. Most Brazilian firms that ventured abroad in the past did so solely by exports — thereby interrupting the establishment chain. This inward-looking behavior was a consequence of macroeconomic deterrents (e.g., foreign exchange volatility, high interest rates, and lack of long-term financing sources), poor logistics infrastructure (which increased the costs of exports and led to low-scale sales abroad and, therefore, little incentive to serve foreign customers through FDI). Also, several Brazilian firms had vertically integrated business models, which made it difficult to replicate their mode of operations abroad (Cyrino & Tanure, 2009). The third obstacle to internationalization was the lack of a global mindset — a result of the combination of high geographical barriers (even to neighboring Latin American countries, because of the natural obstacles represented by the Andes mountain range, the water lands (Pantanal) and the Amazon Forest), cultural differences, and liability of origin (that is, a sense of being inferior to Americans and Europeans). But there have been important changes in the environment which have driven Brazilian firms' recent appetite for international markets (Carneiro, 2012; Cyrino & Tanure, 2009; Da Rocha & Da Silva, 2009): economic, fiscal and institutional stability; the wave of globalization; overvalued currency (1994–1998; 2007–2012), which favored FDI; undervalued currency (1999–2006), which favored exports; saturation of the domestic market (for some firms); economic liberalization and openness to foreign competitors on Brazilian ground; productive reconfiguration and increase in competiveness by several Brazilian firms; privatization; management professionalization; higher export intensity, which led to FDI in order to support foreign operations (in commercial, warehousing and distribution facilities, but seldom in production); establishment of the Mercosur trade bloc; change in managerial behavior (younger managers with language skills, personal experience abroad and a global mindset); client following; network pressures; and availability of long-term funding from BNDES (the national development bank) which has led to an acquisition spree abroad. Companies in the region have different reasons to go abroad. These include limited room for growth in the domestic market (either because they have reached a strong leadership in their market or because the market is small or because domestic and foreign competition alike are getting fiercer); a wish to diversify country risk; or a need to learn from experiences outside and be able to better compete with new players in their own domestic arena (Anand, Brenes, Karnani, & Rodriguez, 2006); or a way to exploit competences developed in their own domestic market (Fleury & Fleury, 2011). Several business firms in Latin America now regard the regional market as an opportunity. Companies from emerging markets have been gradually substituting exports and FDI to more developed countries for “South–South” trade and investment (Ramamurti, 2009a). Thus, Mexican firms now see Central America as a natural extension of their activities. Many Central American companies are also expanding operations to all countries in the region and sometimes South America. While Colombian and Ecuadorian firms are seeking investment opportunities mainly in
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Central America, Brazilian and Chilean companies are tending to concentrate on their South American neighbors, and Peruvian companies look for opportunities in Argentina and Bolivia. On the other hand, business firms in the commodity businesses, such as food grains, oil or mining, are still involved in exports to more developed countries. Several Latin American firms that have gone abroad present in fact a regional (not global) pattern of internationalization — and this includes even the so-called “born globals” (cf., Lopez, Kundu, & Ciravegna, 2009). It is interesting to note that such a pattern of regional spread is also prevalent among firms that originated from more developed economies (Rugman, 2005). Most of the so-called Global Latinas (Casanova, 2009), have actually concentrated on exploiting opportunities in neighboring countries. Some examples are Indurama and ACOSA-Edimca from Ecuador; CEMEX, Maseca and Elektra from Mexico; Avianca-Taca, Banco de Colombia, Banco Davivienda and Grupo Aval from Colombia; Natura, Brahma and Antarctica (currently ABInbev), and Itaú from Brazil, COPA Airlines from Panama; LAN Chile Airlines and Tiendas Falabella from Chile; L'bel and Grupo Gloria from Peru; Grupo Monge and Grupo Britt NV from Costa Rica; Pollo Campero from Guatemala; and La Curaçao from El Salvador. However, very few companies in the region are truly global (Brenes, Chattopadhyay, & Montoya, 2012; Brenes, Montoya, & Chattopadhyay, 2012; Chattopadhyay & Batra, 2012) — notable examples would be JBS-Friboi, Gerdau, and Odebrecht from Brazil; and CEMEX and Grupo Modelo from Mexico. Interestingly, companies that have internationalized earlier have taken better advantage of further growth opportunities in global markets (Dominguez & Brenes, 1997). However, except in cases where international competition depends heavily on global positioning, as in the case of Brazilian Embraer or Mexican CEMEX, the general pattern has been for companies to expand first in Latin American markets and then take the leap into global markets. Owing to current regional growth, a rising middle class and the increasing ease of doing business in several countries of the region, economists expect this trend in regional expansion to continue in the near future. 4. Changes in the strengths and behavior of Latin American firms Competing abroad is not without challenges for Latin American firms. A vast majority of Latin American firms are small and medium-sized. Being small restricts the ability to leverage economies of scale and limits the amount of resources available for expansion, the access to world-class talent and the ability to leverage their brands in global markets. However, there are opportunities to achieve an efficient scale domestically, for example in Brazil and Mexico. Additionally, economic growth in the region and an active regionalization of operations have enabled many companies to develop an interesting business scale and profitability level they could use to leverage their activities in global markets, and some of them have already done so. Companies in the region still have to deal with many internal challenges to improve their strategies and respective executions in order to compete in regional and global markets (Ickis, 2000). Among others, we can mention further strengthening of the process of professionalization and training of executives, improving family and business succession management, and going public in order to access the capital required for continued growth and for fighting increased competition in domestic markets. Observation of family-owned firms, in particular, indicates that the most successful ones have undergone formal processes of discussion on the future of the family–business relationship (Brenes, Madrigal, & Requena, 2011). Albeit slowly, such firms have been setting out such relationships in writing, based on adherence to a family protocol where the rules of the family–business relationship are clearly established. Such agreements have favored smooth succession, establishment of serious corporate governance, professionalization of managers, management of family members entering
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and leaving the business firm, human resource policies for family and non-family members, and shareholding and dividend policies (Brenes & Madrigal, 2003). Over the last few years, we have seen professionalization of managers in companies in the region that has encouraged more robust business strategy formulation processes. These processes have opened up new opportunities regarding what these companies can do outside their original comfort zone (Anand et al., 2006; Brenes, Mena, & Molina, 2007). Latin American companies have adopted increasingly sophisticated business strategies. The number of firms in the region that have undertaken a formal and structured planning process has increased substantially over the course of the past two decades (Brenes et al., 2007) This means that companies today are growing with the help of analytical strategic diagnosis processes, which they share and discuss with their management teams. This new approach leaves behind earlier practices where strategies were implicit (not written) and primarily conceived of and present in the minds of senior executives alone, oftentimes just the owner or general manager (Anand et al., 2006; Brenes et al., 2007; Brenes, Montoya, & Ciravegna, 2014). The proliferation of free trade agreements with developed countries, such as NAFTA (North American Free Trade Agreement), CAFTA (Central American Free Trade Agreement), CACM (Central American Common Market) and Mercosur and other multilateral treaties, together with bilateral treaties between Chile and Costa Rica, and other recent ones such as that between Panama and Colombia, are key opportunities that firms from some countries have fully exploited (Anand et al., 2006; Brenes, 2000; Dominguez & Brenes, 1997). The experiences acquired by pioneer firms in regional internationalization processes have highlighted a number of “discoveries” outside their borders that have allowed them to strengthen their competitive advantage domestically, regionally and globally — in a springboard pattern by which emerging market multinationals “use international expansion as a springboard to acquire strategic resources and reduce their institutional and market constraints at home” (Luo & Tung, 2007:481). Major “discoveries” include a diverse pool of management talent; alternative sources of supply; better and often less expensive locations for production, research and development, and back office activities where scale can be better exploited and taken advantage of; cheaper funding sources (Doz, Santos, & Williamson, 2001). The increased diversity of multi-country talent, professionalism and vision of senior management executives in many companies have enabled internationalization and globalization issues to permeate companies' mindsets in the region. Fear of internationalization has gradually vanished as a result of fiercer competition in domestic markets, successful regional experiences and quest for growth (Chattopadhyay & Batra, 2012). Over time, firms from certain emerging markets (including several in Latin America) have developed firm-specific advantages, which have enabled them to compete successfully abroad (Ramamurti, 2009b): products/services suited to the particular characteristics of consumers from other emerging markets, production and operations excellence, privileged access to resources and markets, advantages accruing from experience with adversity, and traditional intangible assets. Interestingly, some Brazilian firms have also leveraged on particular country-specific advantages (Carneiro, 2013): favorable industry image abroad (for example, swimwear: Lenny, Salinas, Blue Man; jewelry: H. Stern; beverages with some “exotic” or tropical appeal: Sagatiba (cachaça producer); steakhouses: Fogo de Chão, Porcão, Plataforma; and casual footwear: Havaianas), and technologies and products developed out of particular country characteristics (for example, biofuels: raízen (Shell and Cosan joint venture); and cosmetics: Natura, O Boticário). All in all, winning companies seem to be those that, regardless of protection formerly enjoyed in their domestic markets, have developed strategies to reposition their business at home and abroad (Austin & Ickis, 1991; Brenes, 2000).
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5. A brief presentation of the papers included in this special issue The 14 papers in this special issue cover several areas: strategy; consumer behavior; culture, social, and ethical issues; entrepreneurship; financial markets, investment and risk; human resource management; and supply-chain and operations management. They also cover 13 Latin American countries: Argentina, Brazil, Chile, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Peru and Venezuela. Some countries outside Latin America are also covered: Australia, Belgium, Italy, New Zealand Russia, Taiwan, and the U.S. The first article, “International Marketing Strategies in Industrial Clusters: Insights From the Southern Hemisphere” (by Christian Felzensztein, Christina Stringer and Maureen Benson-Rea), which won the BALAS 2012 Sion Raveed Award, examined cooperative marketing strategies among cluster-based firms in the most important wine producing and exporting countries in the ‘new world’ (specifically, Argentina, Chile, Australia and New Zealand) and found evidence of the importance of market development initiatives established through formal channels, such as joint trade missions, market delegations and trade fair participations. The article “Differentiation Strategies in Emerging Markets — The Case of Latin American Agribusinesses” by (Esteban R. Brenes, Daniel Montoya and Luciano Ciravegna) investigated the competitive methods emphasized by agribusiness firms from emerging markets that specialize in high value-added products. Their differentiation strategy was based mainly on innovation capabilities, marketing skills and breadth of product scope. Findings suggest that these differentiated firms would be relatively conservative in their internationalization – before entering new markets they diversify their products, improve their processes and strengthen their brands domestically – and would enter foreign markets only if and when they can command higher prices. The next article, “Knowledge Transfer among the Small Businesses of a Brazilian Cluster” (by Valmir Hoffmann, Gisele Lopes and Janann Joslin) took the specific case of a furniture-manufacturing cluster in Brazil and investigated how small businesses operating in the cluster transfer knowledge amongst one another and how the cluster circulates and accesses such knowledge. The main mechanisms for knowledge transfer appear to be workforce mobility (in the perception of supplier firms) and support institution activities (in the view of producer firms). Additionally the study provides evidence that (i) the knowledge transfer process is multi-dimensional; (ii) knowledge transfer can occur in clusters even in the absence of interfirm cooperation; (iii) the dimensions of the process can be combined in various ways to facilitate knowledge transfer; (iv) this combination may differ from cluster to cluster; and (v) producers are more likely than suppliers to perceive and access knowledge available in the cluster. The fourth article, “The Impacts of Technology Readiness on Emotions and Cognition: A Study of Technology Acceptance in Brazil” (by Jorge Brantes Ferreira, Angela da Rocha and Jorge Ferreira da Silva), advanced an extended model of consumer adoption of (specifically, attitude and intention regarding) high technology products and concluded that consumers' technology readiness exerts strong influence in the formation of both cognitive and affective assessments. In this study, the effects of technology readiness over affective assessments were greater than those relative to cognitive evaluations. The next paper, “Effects of the perceived diagnosticity of presented attribute and brand name information on sensitivity to missing information” (by José Mauro Hernandez, Xiaoqi Han and Frank R. Kardes) followed an experimental approach and found evidence that consumers become sensitive to missing information when available information is not diagnostic. Differences were found between experienced and novice consumers. The authors also discuss implications of the results for understanding information utilization and omission neglect. The sixth article, “Virtual communities as reference groups: Influence in purchasing decisions from the participants’ perspective” (by Gabriela
Leal, Luís Fernando Hor-Meyll and Luís Pessôa) is an exploratory study on consumers' purchasing decisions. It provides evidence that purchasing intentions and behavior can be modified as a result of interactions among members of virtual communities, at least in the particular environment investigated: a community for brides and newly-wed women. The next piece, “An Exploratory Study of Environmental Attitudes and the Willingness to Pay for Environmental Certification in Mexico” (by Bryan Husted, Michael Russo, Carlos Meza and Suzanne Tilleman), examines whether consumers would be willing to pay a premium for environmentally-certified products. Findings suggest that there is a nonlinear relationship between pro-environmental attitudes and marginal willingness to pay. The next paper, “Institutional Environment and Business Groups Resilience in Brazil” (by Wlamir Xavier, Rodrigo Bandeira de Mello and Rosilene Marcon), draws from institutional theory and political economy to verify how transitions in institutional environments affect the performance of business groups. Results provide evidence that market failure fluctuations affect the private revenues of business groups in Brazil, even after pro-market reforms. The ninth article, “Micromultinational or not? The effects of international entrepreneurship, networking and learning” (by Pavlos Dimitratos, José Ernesto Amorós, Maria Soledad Etchebarne and Christian Felzensztein), investigates the effects of three sets of variables – international entrepreneurship, networking and learning – on the probability that a micro-multinational will survive the challenges and become a MNE. Findings suggest that risk-taking propensity (an entrepreneurial characteristic) and networking with domestic and international partners increase the chances of becoming a MNE. The next article, “The Internationalization of High Technology SMEs — An Exploratory Study of Networks and Country of Origin Effects” (by Luciano Ciravegna, Luis Lopez and Sumit Kundu), explores how high technology small and medium enterprises develop and use networks to penetrate their first foreign market. The eleventh piece, “Access to Finance, Working Capital Management and Company Value: Evidences from Brazilian Companies Listed on BM&FBOVESPA” (by Juliano Almeida and William Eid Jr.), analyzes the impact of financial leverage on the relationship between working capital and company value and how financial constraints on access to funding affect this relationship. The next paper, “Expropriation Risk and Housing Prices: Evidence from an Emerging Market” (by Cosme Betancourt, Víctor Contreras, Urbi Garay and Miguel Ángel Santos), contributes to the hedonic pricing literature by examining the microeconomic determinants of residential real estate prices in a country where risks of land invasions and expropriations (with only partial compensation) have been common threats to property owners. The next article, “Comparing Employment Interviews in Latin America with Other Countries” (by Richard Posthuma, Julia Levashina, Filip Lievens, Eveline Schollaert, Wei-Chi Tsai, M. Fernanda Wagstaff and Michael Campion), identifies differences in job interviews across different countries, in terms of who generally conducts the interview (man or woman) and what applicants are asked about. Findings suggest that job interviews are more than a test of job-related knowledge, skills, and abilities. The last article in this special issue, “What Type of Cooperation with Suppliers and Customers Leads to Superior Performance?” (by Luiz Brito, Eliane Brito and Luciana Hashiba), evaluates financial performance implications of the cooperation between suppliers and customers and finds that not all cooperative behaviors have similar and positive impacts on performance. Acknowledgment of reviewer’s contribution We would like to thank the reviewers, whose comments and recommendations were invaluable to help the authors improve their works and produce papers that are up to the stringent quality
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requirements of the JBR. We are highly indebted to all of them and take this opportunity to list their names (first-name alphabetical order) and affiliations: Alberto Trejos (INCAE Business School, Costa Rica) Aldo Musachio (Harvard Business School, USA) Andrea Prado (INCAE Business School, Costa Rica) Andreja Jaklič (University of Ljubljana, Slovenia) Aneel Karnani (University of Michigan, Ann Arbor, USA) Arnoldo Rodriguez (INCAE Business School, Costa Rica) Bernard Kilian (INCAE Business School, Costa Rica) Burcu Taşoluk (Sabanci University, Turkey) Catherine Axinn (Ohio University, USA) Christian Felzensztein (Universidad Adolfo Ibañez, Chile) Dirk Boehe (formerly, Insper Business School, Brazil; now, University of Adelaide, Australia) Eduardo Andrade (University of California, Berkeley, USA; and FGV/Ebape, Brazil) Eduardo Montiel (INCAE Business School, Nicaragua) Eugenio Avila Pedrozo (Federal University of Rio Grande do Sul, Brazil) Fernando Robles (George Washington University, USA) Flavia Cavazotte (Pontifical Catholic University of Rio de Janeiro, Brazil) Francisca Sinn (Universidad Adolfo Ibañez, Chile) Hilka Vier Machado (State University of Maringá, Brazil) Jader Sampaio (Federal University of Minas Gerais, Brazil) Jamie Carlson (University of Tasmania, Australia) Jay Anand (Ohio State University, USA) John Ickis (INCAE Business School, Costa Rica) Johny Ostos (ESAN Business School, Peru) José Pla-Barber (Universtiy of Valencia, Spain) Joseph B. Ganitsky (University of Miami, USA) Kiran Trehan (Lancaster University, UK) Luciano Ciravegna (Royal Holloway, University of London, UK) Luis López (INCAE Business School, Costa Rica) Mário Ogasavara (University of Fortaleza, Brazil) Mauricio Melgarejo (INCAE Business School, Nicaragua) Miguel Pina e Cunha (Universidade Nova de Lisboa, Portugal) Mike Peng (University of Texas at Dallas, USA) Moisés Resende Filho (University of Brasilia, Brazil) Pablo Martin de Holan (IE Business School, Spain) Patricia Morilha Muritiba (Nove de Julho University, Brazil) Rafael Corredoira (University of Maryland, USA) Robert Grosse (George Mason University, USA) Roberto Fava Scare (University of São Paulo at Ribeirão Preto, Brazil) Roberto Gonzalez Duarte (Pontifical Catholic University of Minas Gerais, Brazil) Sergio Biggemann (Otago University, New Zealand) Srinivasa Rangan (Babson University, USA) Sumit K. Kundu (Florida International University, USA) Susan Clancy (INCAE Business School, Nicaragua) Urs Jäger (INCAE Business School, Costa Rica). We are also greatly indebted to our research assistant, Henrique Pacheco (Pontifical Catholic University of Rio de Janeiro), whose relentless dedication to the administrative duties related to the special issue and to the handling and registering of communication and exchange of materials with the authors, allowed the guest editors to dedicate their minds to the academic issues. We would like to thank the support of The Steve Aronson Chair of Strategy and Agribusiness that provided funds for this important endeavor and to Melina Segura, junior researcher at The Steve Aronson Chair of Strategy and Agribusiness.
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Contents lists available at ScienceDirect
Journal of Business Research
Latin American firms competing in the global economy Jorge Carneiro a,⁎, Esteban R. Brenes b a b
Pontifical Catholic University of Rio de Janeiro (PUC-Rio), Rua Marquês de São Vicente, 225, Rio de Janeiro, RJ 22280-030, Brazil INCAE Business School, La Garita, Alajuela, Costa Rica
a r t i c l e
i n f o
Article history: Received 1 January 2013 Received in revised form 1 May 2013 Accepted 1 June 2013 Available online 25 July 2013 Keywords: Latin America Internationalization Strategy BALAS conference
a b s t r a c t As part of a cooperative effort between the Journal of Business Research (JBR) and the Business Association of Latin American Studies (BALAS), this special issue brings updated research on the Latin American business environment. Out of 226 papers submitted to the BALAS 2012 conference, which was hosted by the Pontifical Catholic University of Rio de Janeiro (PUC-Rio), 22 were pre-selected to run for publication in this special issue — and only 14 actually were accepted after the demanding three rounds of a double blind review process that was run after the conference. This introduction to the special issue of the JBR on the BALAS 2012 conference brings an overview of the changes that have taken place in the business environment of Latin America, the evolution of the internationalization behavior of Latin American firms and the changes in their strengths to compete both domestically and abroad. © 2013 Elsevier Inc. All rights reserved.
1. Introduction This JBR special section is the result of a cooperative relationship between the Journal of Business Research (JBR) and the Business Association of Latin American Studies (BALAS) and features the best papers of BALAS 2012 conference, hosted by PUC-Rio in Rio de Janeiro. BALAS (www.balas.org) is an academic organization focusing on management research in Latin America and has over 500 members from all over the region and also outside Latin America. Although Latin America has relevant participation in the world economy and three of its countries figure among the world's thirty largest by GDP (Brazil as 6th, Mexico as 14th and Argentina as 25th, cf. World Bank, 2012), Latin America has been a neglected region in management literature and Latin American researchers publish little (Pérez-Batres, Pisani, & Doh, 2010). In fact, “In the first half of this decade [2000s], less than 3% of IB articles dealt specifically with Latin America” (Pérez-Batres et al., 2010:3). Fastoso and Whitelock (2011:436) contend that Latin America “has largely been neglected both in the international business and marketing areas,” a complaint also voiced by Samiee and Athanassiou (1998) more than 15 years ago as well as by other more recent studies (e.g., Birnik & Bowman, 2007; Fastoso & Whitelock, 2007). According to JBR's Associate Editor Sergio Biggemann, this picture has changed very little and as of today only “3.93% of publications in IB Journals and the Journal of Business Research are from Latin American authors or about a Latin American company” (Biggemann, 2013:3). The cooperation between BALAS and the JBR is contributing to bridge this gap: The JBR has already published seven special issues on
⁎ Corresponding author. E-mail addresses: [email protected] (J. Carneiro), [email protected] (E.R. Brenes). 0148-2963/$ – see front matter © 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.jbusres.2013.07.001
Latin America, while another one (related to the BALAS 2011 conference) is under way, besides the present one; all papers in these special issues focus on Latin American firms and environment, and the majority was written by Latin American researchers: • Vol.38, No1 (1997) — New International Enterprise in Latin America • Vol.50, No.1 (2000) — Case Studies on the New Global Strategies of International Business in Latin America • Vol. 59, No.11 (2006) — Strategic Management in Latin America • Vol.62, No.9 (2009) — Special Issue on BALAS (Business Association for Latin American Studies) • Vol.64, No.3 (2011) — Strategic Management in Latin America: Issues and Assessment • Vol.65, No.12 (2012) — Best Papers Business Association of Latin American Studies 2010 • Vol.66, No.3 (2013) — Advances in Business Research in Latin America Studies The BALAS 2012 conference was hosted by IAG Business School of the Pontifical Catholic University of Rio de Janeiro (PUC-Rio, www. iag.puc-rio.br). A total of 226 papers were submitted to the conference, of which 122 (54%) were accepted for presentation and 94 were actually presented. Of the papers presented, 22 were pre-selected to run for publication in this JBR special issue, based on their quality and relevance to management literature and to the Latin American business environment. The pre-selection process was based on comments and rankings by the conference reviewers and track chairs and also on the comments and feedback received from session moderators and BALAS Executive Committee members. The pre-selected papers underwent two rounds of a double blind review process, by two experienced independent reviewers each, plus a final round of reviews by the two guest editors.
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This intense interaction between authors, reviewers and editors makes us confident that the final selection of 14 papers (out of the 22 initially pre-selected and the 94 presented at the conference) for this special issue will make a relevant contribution to literature and management practice. This introductory paper presents threats and opportunities faced by Latin American firms competing in the global economy. We start with an overview of the changes in the economic and political environment of Latin America, then discuss aspects of the internationalization behavior of Latin American firms, and finally address some changes firms have made in order to compete in the global economy. At the end, we introduce each of the papers included in this special issue and give a special “thank you” to the 44 expert reviewers who participated actively and insightfully in the double blind review process. 2. Changes in the economic and political environment of Latin America Latin America is facing major economic and political changes. In fact, over the last few years it has been one of the most dynamic economies in the world, growing on average 6.3% per year between 2009 and 2012, exceeding the average global growth of 5.7% for the same period (International Monetary Fund [IMF], 2013). Inward foreign direct investment in Latin America in 2011 was $ 169.1 billion (World Bank, 2012), which amounts to an annual compound increase of 16.3% per year since 2009. Politically, the region has become polarized insofar as some countries are clearly democratic whereas others have long-lived populist and dictatorial practices. Unfortunately this state of affairs has resulted in some countries not having taken full advantage of economic opportunities, thus undermining their growth potential. Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Guatemala, Mexico, Panama, Paraguay, Peru and Uruguay all exemplify free-market economies. On the other hand, Argentina, Bolivia, Ecuador, El Salvador, Honduras, Nicaragua and Venezuela tend to show economic protectionism and political populism. The former countries are growing at a greater average rate than the latter. However, Ecuador and Nicaragua, although not among the free market examples and with an uncertain political climate going forward, are growing at a good pace and generally have good development prospects for a medium term. The overall business environment for entrepreneurs in Latin America remains a major challenge. There are problems in terms of infrastructure and excessive bureaucracy. Companies in the region still have to deal with several obstacles to competitiveness, such as poor infrastructure and expensive logistics, cumbersome government bureaucracy and procedures, high electricity costs (with frequent outages), limited supply of trained professionals, illiquidity of capital markets and political and economic uncertainty in some countries (Brenes & Haar, 2012). Although the recent and intense rise of the middle class (notably, in Brazil and Peru, but also in some other Latin American countries) has laid way to opportunities for sales and profits in the domestic Latin American markets, challenges remain as regards marketing, logistics, financing and infrastructure in order to properly cater to the needs and particular buying behavior of this new upcoming consumer. 3. Internationalization of Latin American firms Around twenty years ago, Latin American companies still operated mainly in their domestic markets. Today, many have succeeded in expanding into the region and beyond. Over the last 10 years or so, significant changes have taken place at the firm level as a result of new domestic and international growth strategies and due to fierce competition from abroad. Competition in the region is growing more intense, not only due to local firms' interests in exploiting the growth of the economy
and the middle class, but especially since many global companies are looking for growth paths in emerging markets in view of the crisis they are currently facing in the developed world. The recent expansion of Brazilian firms is particularly interesting. Although Brazilian firms have, in general, been late entrants to the international arena (Fleury & Fleury, 2009), they seem to be catching up and some have even become global champions (Carneiro, 2012). Three main deterrents have until recently contributed to the low level of internationalization of Brazilian firms (Da Rocha, 2003; Da Rocha & Da Silva, 2009; Da Rocha, Da Silva, & Carneiro, 2007): lack of firm-specific advantages, rupture of the establishment chain (cf. Johanson & Vahlne, 1977), and absence of a global mindset. The lack of firm-specific advantages was due mainly to institutional disincentives (e.g., political instability) and environmental turbulence and to the possibility of catering to a large and (in the past) protected domestic market. Most Brazilian firms that ventured abroad in the past did so solely by exports — thereby interrupting the establishment chain. This inward-looking behavior was a consequence of macroeconomic deterrents (e.g., foreign exchange volatility, high interest rates, and lack of long-term financing sources), poor logistics infrastructure (which increased the costs of exports and led to low-scale sales abroad and, therefore, little incentive to serve foreign customers through FDI). Also, several Brazilian firms had vertically integrated business models, which made it difficult to replicate their mode of operations abroad (Cyrino & Tanure, 2009). The third obstacle to internationalization was the lack of a global mindset — a result of the combination of high geographical barriers (even to neighboring Latin American countries, because of the natural obstacles represented by the Andes mountain range, the water lands (Pantanal) and the Amazon Forest), cultural differences, and liability of origin (that is, a sense of being inferior to Americans and Europeans). But there have been important changes in the environment which have driven Brazilian firms' recent appetite for international markets (Carneiro, 2012; Cyrino & Tanure, 2009; Da Rocha & Da Silva, 2009): economic, fiscal and institutional stability; the wave of globalization; overvalued currency (1994–1998; 2007–2012), which favored FDI; undervalued currency (1999–2006), which favored exports; saturation of the domestic market (for some firms); economic liberalization and openness to foreign competitors on Brazilian ground; productive reconfiguration and increase in competiveness by several Brazilian firms; privatization; management professionalization; higher export intensity, which led to FDI in order to support foreign operations (in commercial, warehousing and distribution facilities, but seldom in production); establishment of the Mercosur trade bloc; change in managerial behavior (younger managers with language skills, personal experience abroad and a global mindset); client following; network pressures; and availability of long-term funding from BNDES (the national development bank) which has led to an acquisition spree abroad. Companies in the region have different reasons to go abroad. These include limited room for growth in the domestic market (either because they have reached a strong leadership in their market or because the market is small or because domestic and foreign competition alike are getting fiercer); a wish to diversify country risk; or a need to learn from experiences outside and be able to better compete with new players in their own domestic arena (Anand, Brenes, Karnani, & Rodriguez, 2006); or a way to exploit competences developed in their own domestic market (Fleury & Fleury, 2011). Several business firms in Latin America now regard the regional market as an opportunity. Companies from emerging markets have been gradually substituting exports and FDI to more developed countries for “South–South” trade and investment (Ramamurti, 2009a). Thus, Mexican firms now see Central America as a natural extension of their activities. Many Central American companies are also expanding operations to all countries in the region and sometimes South America. While Colombian and Ecuadorian firms are seeking investment opportunities mainly in
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Central America, Brazilian and Chilean companies are tending to concentrate on their South American neighbors, and Peruvian companies look for opportunities in Argentina and Bolivia. On the other hand, business firms in the commodity businesses, such as food grains, oil or mining, are still involved in exports to more developed countries. Several Latin American firms that have gone abroad present in fact a regional (not global) pattern of internationalization — and this includes even the so-called “born globals” (cf., Lopez, Kundu, & Ciravegna, 2009). It is interesting to note that such a pattern of regional spread is also prevalent among firms that originated from more developed economies (Rugman, 2005). Most of the so-called Global Latinas (Casanova, 2009), have actually concentrated on exploiting opportunities in neighboring countries. Some examples are Indurama and ACOSA-Edimca from Ecuador; CEMEX, Maseca and Elektra from Mexico; Avianca-Taca, Banco de Colombia, Banco Davivienda and Grupo Aval from Colombia; Natura, Brahma and Antarctica (currently ABInbev), and Itaú from Brazil, COPA Airlines from Panama; LAN Chile Airlines and Tiendas Falabella from Chile; L'bel and Grupo Gloria from Peru; Grupo Monge and Grupo Britt NV from Costa Rica; Pollo Campero from Guatemala; and La Curaçao from El Salvador. However, very few companies in the region are truly global (Brenes, Chattopadhyay, & Montoya, 2012; Brenes, Montoya, & Chattopadhyay, 2012; Chattopadhyay & Batra, 2012) — notable examples would be JBS-Friboi, Gerdau, and Odebrecht from Brazil; and CEMEX and Grupo Modelo from Mexico. Interestingly, companies that have internationalized earlier have taken better advantage of further growth opportunities in global markets (Dominguez & Brenes, 1997). However, except in cases where international competition depends heavily on global positioning, as in the case of Brazilian Embraer or Mexican CEMEX, the general pattern has been for companies to expand first in Latin American markets and then take the leap into global markets. Owing to current regional growth, a rising middle class and the increasing ease of doing business in several countries of the region, economists expect this trend in regional expansion to continue in the near future. 4. Changes in the strengths and behavior of Latin American firms Competing abroad is not without challenges for Latin American firms. A vast majority of Latin American firms are small and medium-sized. Being small restricts the ability to leverage economies of scale and limits the amount of resources available for expansion, the access to world-class talent and the ability to leverage their brands in global markets. However, there are opportunities to achieve an efficient scale domestically, for example in Brazil and Mexico. Additionally, economic growth in the region and an active regionalization of operations have enabled many companies to develop an interesting business scale and profitability level they could use to leverage their activities in global markets, and some of them have already done so. Companies in the region still have to deal with many internal challenges to improve their strategies and respective executions in order to compete in regional and global markets (Ickis, 2000). Among others, we can mention further strengthening of the process of professionalization and training of executives, improving family and business succession management, and going public in order to access the capital required for continued growth and for fighting increased competition in domestic markets. Observation of family-owned firms, in particular, indicates that the most successful ones have undergone formal processes of discussion on the future of the family–business relationship (Brenes, Madrigal, & Requena, 2011). Albeit slowly, such firms have been setting out such relationships in writing, based on adherence to a family protocol where the rules of the family–business relationship are clearly established. Such agreements have favored smooth succession, establishment of serious corporate governance, professionalization of managers, management of family members entering
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and leaving the business firm, human resource policies for family and non-family members, and shareholding and dividend policies (Brenes & Madrigal, 2003). Over the last few years, we have seen professionalization of managers in companies in the region that has encouraged more robust business strategy formulation processes. These processes have opened up new opportunities regarding what these companies can do outside their original comfort zone (Anand et al., 2006; Brenes, Mena, & Molina, 2007). Latin American companies have adopted increasingly sophisticated business strategies. The number of firms in the region that have undertaken a formal and structured planning process has increased substantially over the course of the past two decades (Brenes et al., 2007) This means that companies today are growing with the help of analytical strategic diagnosis processes, which they share and discuss with their management teams. This new approach leaves behind earlier practices where strategies were implicit (not written) and primarily conceived of and present in the minds of senior executives alone, oftentimes just the owner or general manager (Anand et al., 2006; Brenes et al., 2007; Brenes, Montoya, & Ciravegna, 2014). The proliferation of free trade agreements with developed countries, such as NAFTA (North American Free Trade Agreement), CAFTA (Central American Free Trade Agreement), CACM (Central American Common Market) and Mercosur and other multilateral treaties, together with bilateral treaties between Chile and Costa Rica, and other recent ones such as that between Panama and Colombia, are key opportunities that firms from some countries have fully exploited (Anand et al., 2006; Brenes, 2000; Dominguez & Brenes, 1997). The experiences acquired by pioneer firms in regional internationalization processes have highlighted a number of “discoveries” outside their borders that have allowed them to strengthen their competitive advantage domestically, regionally and globally — in a springboard pattern by which emerging market multinationals “use international expansion as a springboard to acquire strategic resources and reduce their institutional and market constraints at home” (Luo & Tung, 2007:481). Major “discoveries” include a diverse pool of management talent; alternative sources of supply; better and often less expensive locations for production, research and development, and back office activities where scale can be better exploited and taken advantage of; cheaper funding sources (Doz, Santos, & Williamson, 2001). The increased diversity of multi-country talent, professionalism and vision of senior management executives in many companies have enabled internationalization and globalization issues to permeate companies' mindsets in the region. Fear of internationalization has gradually vanished as a result of fiercer competition in domestic markets, successful regional experiences and quest for growth (Chattopadhyay & Batra, 2012). Over time, firms from certain emerging markets (including several in Latin America) have developed firm-specific advantages, which have enabled them to compete successfully abroad (Ramamurti, 2009b): products/services suited to the particular characteristics of consumers from other emerging markets, production and operations excellence, privileged access to resources and markets, advantages accruing from experience with adversity, and traditional intangible assets. Interestingly, some Brazilian firms have also leveraged on particular country-specific advantages (Carneiro, 2013): favorable industry image abroad (for example, swimwear: Lenny, Salinas, Blue Man; jewelry: H. Stern; beverages with some “exotic” or tropical appeal: Sagatiba (cachaça producer); steakhouses: Fogo de Chão, Porcão, Plataforma; and casual footwear: Havaianas), and technologies and products developed out of particular country characteristics (for example, biofuels: raízen (Shell and Cosan joint venture); and cosmetics: Natura, O Boticário). All in all, winning companies seem to be those that, regardless of protection formerly enjoyed in their domestic markets, have developed strategies to reposition their business at home and abroad (Austin & Ickis, 1991; Brenes, 2000).
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5. A brief presentation of the papers included in this special issue The 14 papers in this special issue cover several areas: strategy; consumer behavior; culture, social, and ethical issues; entrepreneurship; financial markets, investment and risk; human resource management; and supply-chain and operations management. They also cover 13 Latin American countries: Argentina, Brazil, Chile, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Peru and Venezuela. Some countries outside Latin America are also covered: Australia, Belgium, Italy, New Zealand Russia, Taiwan, and the U.S. The first article, “International Marketing Strategies in Industrial Clusters: Insights From the Southern Hemisphere” (by Christian Felzensztein, Christina Stringer and Maureen Benson-Rea), which won the BALAS 2012 Sion Raveed Award, examined cooperative marketing strategies among cluster-based firms in the most important wine producing and exporting countries in the ‘new world’ (specifically, Argentina, Chile, Australia and New Zealand) and found evidence of the importance of market development initiatives established through formal channels, such as joint trade missions, market delegations and trade fair participations. The article “Differentiation Strategies in Emerging Markets — The Case of Latin American Agribusinesses” by (Esteban R. Brenes, Daniel Montoya and Luciano Ciravegna) investigated the competitive methods emphasized by agribusiness firms from emerging markets that specialize in high value-added products. Their differentiation strategy was based mainly on innovation capabilities, marketing skills and breadth of product scope. Findings suggest that these differentiated firms would be relatively conservative in their internationalization – before entering new markets they diversify their products, improve their processes and strengthen their brands domestically – and would enter foreign markets only if and when they can command higher prices. The next article, “Knowledge Transfer among the Small Businesses of a Brazilian Cluster” (by Valmir Hoffmann, Gisele Lopes and Janann Joslin) took the specific case of a furniture-manufacturing cluster in Brazil and investigated how small businesses operating in the cluster transfer knowledge amongst one another and how the cluster circulates and accesses such knowledge. The main mechanisms for knowledge transfer appear to be workforce mobility (in the perception of supplier firms) and support institution activities (in the view of producer firms). Additionally the study provides evidence that (i) the knowledge transfer process is multi-dimensional; (ii) knowledge transfer can occur in clusters even in the absence of interfirm cooperation; (iii) the dimensions of the process can be combined in various ways to facilitate knowledge transfer; (iv) this combination may differ from cluster to cluster; and (v) producers are more likely than suppliers to perceive and access knowledge available in the cluster. The fourth article, “The Impacts of Technology Readiness on Emotions and Cognition: A Study of Technology Acceptance in Brazil” (by Jorge Brantes Ferreira, Angela da Rocha and Jorge Ferreira da Silva), advanced an extended model of consumer adoption of (specifically, attitude and intention regarding) high technology products and concluded that consumers' technology readiness exerts strong influence in the formation of both cognitive and affective assessments. In this study, the effects of technology readiness over affective assessments were greater than those relative to cognitive evaluations. The next paper, “Effects of the perceived diagnosticity of presented attribute and brand name information on sensitivity to missing information” (by José Mauro Hernandez, Xiaoqi Han and Frank R. Kardes) followed an experimental approach and found evidence that consumers become sensitive to missing information when available information is not diagnostic. Differences were found between experienced and novice consumers. The authors also discuss implications of the results for understanding information utilization and omission neglect. The sixth article, “Virtual communities as reference groups: Influence in purchasing decisions from the participants’ perspective” (by Gabriela
Leal, Luís Fernando Hor-Meyll and Luís Pessôa) is an exploratory study on consumers' purchasing decisions. It provides evidence that purchasing intentions and behavior can be modified as a result of interactions among members of virtual communities, at least in the particular environment investigated: a community for brides and newly-wed women. The next piece, “An Exploratory Study of Environmental Attitudes and the Willingness to Pay for Environmental Certification in Mexico” (by Bryan Husted, Michael Russo, Carlos Meza and Suzanne Tilleman), examines whether consumers would be willing to pay a premium for environmentally-certified products. Findings suggest that there is a nonlinear relationship between pro-environmental attitudes and marginal willingness to pay. The next paper, “Institutional Environment and Business Groups Resilience in Brazil” (by Wlamir Xavier, Rodrigo Bandeira de Mello and Rosilene Marcon), draws from institutional theory and political economy to verify how transitions in institutional environments affect the performance of business groups. Results provide evidence that market failure fluctuations affect the private revenues of business groups in Brazil, even after pro-market reforms. The ninth article, “Micromultinational or not? The effects of international entrepreneurship, networking and learning” (by Pavlos Dimitratos, José Ernesto Amorós, Maria Soledad Etchebarne and Christian Felzensztein), investigates the effects of three sets of variables – international entrepreneurship, networking and learning – on the probability that a micro-multinational will survive the challenges and become a MNE. Findings suggest that risk-taking propensity (an entrepreneurial characteristic) and networking with domestic and international partners increase the chances of becoming a MNE. The next article, “The Internationalization of High Technology SMEs — An Exploratory Study of Networks and Country of Origin Effects” (by Luciano Ciravegna, Luis Lopez and Sumit Kundu), explores how high technology small and medium enterprises develop and use networks to penetrate their first foreign market. The eleventh piece, “Access to Finance, Working Capital Management and Company Value: Evidences from Brazilian Companies Listed on BM&FBOVESPA” (by Juliano Almeida and William Eid Jr.), analyzes the impact of financial leverage on the relationship between working capital and company value and how financial constraints on access to funding affect this relationship. The next paper, “Expropriation Risk and Housing Prices: Evidence from an Emerging Market” (by Cosme Betancourt, Víctor Contreras, Urbi Garay and Miguel Ángel Santos), contributes to the hedonic pricing literature by examining the microeconomic determinants of residential real estate prices in a country where risks of land invasions and expropriations (with only partial compensation) have been common threats to property owners. The next article, “Comparing Employment Interviews in Latin America with Other Countries” (by Richard Posthuma, Julia Levashina, Filip Lievens, Eveline Schollaert, Wei-Chi Tsai, M. Fernanda Wagstaff and Michael Campion), identifies differences in job interviews across different countries, in terms of who generally conducts the interview (man or woman) and what applicants are asked about. Findings suggest that job interviews are more than a test of job-related knowledge, skills, and abilities. The last article in this special issue, “What Type of Cooperation with Suppliers and Customers Leads to Superior Performance?” (by Luiz Brito, Eliane Brito and Luciana Hashiba), evaluates financial performance implications of the cooperation between suppliers and customers and finds that not all cooperative behaviors have similar and positive impacts on performance. Acknowledgment of reviewer’s contribution We would like to thank the reviewers, whose comments and recommendations were invaluable to help the authors improve their works and produce papers that are up to the stringent quality
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requirements of the JBR. We are highly indebted to all of them and take this opportunity to list their names (first-name alphabetical order) and affiliations: Alberto Trejos (INCAE Business School, Costa Rica) Aldo Musachio (Harvard Business School, USA) Andrea Prado (INCAE Business School, Costa Rica) Andreja Jaklič (University of Ljubljana, Slovenia) Aneel Karnani (University of Michigan, Ann Arbor, USA) Arnoldo Rodriguez (INCAE Business School, Costa Rica) Bernard Kilian (INCAE Business School, Costa Rica) Burcu Taşoluk (Sabanci University, Turkey) Catherine Axinn (Ohio University, USA) Christian Felzensztein (Universidad Adolfo Ibañez, Chile) Dirk Boehe (formerly, Insper Business School, Brazil; now, University of Adelaide, Australia) Eduardo Andrade (University of California, Berkeley, USA; and FGV/Ebape, Brazil) Eduardo Montiel (INCAE Business School, Nicaragua) Eugenio Avila Pedrozo (Federal University of Rio Grande do Sul, Brazil) Fernando Robles (George Washington University, USA) Flavia Cavazotte (Pontifical Catholic University of Rio de Janeiro, Brazil) Francisca Sinn (Universidad Adolfo Ibañez, Chile) Hilka Vier Machado (State University of Maringá, Brazil) Jader Sampaio (Federal University of Minas Gerais, Brazil) Jamie Carlson (University of Tasmania, Australia) Jay Anand (Ohio State University, USA) John Ickis (INCAE Business School, Costa Rica) Johny Ostos (ESAN Business School, Peru) José Pla-Barber (Universtiy of Valencia, Spain) Joseph B. Ganitsky (University of Miami, USA) Kiran Trehan (Lancaster University, UK) Luciano Ciravegna (Royal Holloway, University of London, UK) Luis López (INCAE Business School, Costa Rica) Mário Ogasavara (University of Fortaleza, Brazil) Mauricio Melgarejo (INCAE Business School, Nicaragua) Miguel Pina e Cunha (Universidade Nova de Lisboa, Portugal) Mike Peng (University of Texas at Dallas, USA) Moisés Resende Filho (University of Brasilia, Brazil) Pablo Martin de Holan (IE Business School, Spain) Patricia Morilha Muritiba (Nove de Julho University, Brazil) Rafael Corredoira (University of Maryland, USA) Robert Grosse (George Mason University, USA) Roberto Fava Scare (University of São Paulo at Ribeirão Preto, Brazil) Roberto Gonzalez Duarte (Pontifical Catholic University of Minas Gerais, Brazil) Sergio Biggemann (Otago University, New Zealand) Srinivasa Rangan (Babson University, USA) Sumit K. Kundu (Florida International University, USA) Susan Clancy (INCAE Business School, Nicaragua) Urs Jäger (INCAE Business School, Costa Rica). We are also greatly indebted to our research assistant, Henrique Pacheco (Pontifical Catholic University of Rio de Janeiro), whose relentless dedication to the administrative duties related to the special issue and to the handling and registering of communication and exchange of materials with the authors, allowed the guest editors to dedicate their minds to the academic issues. We would like to thank the support of The Steve Aronson Chair of Strategy and Agribusiness that provided funds for this important endeavor and to Melina Segura, junior researcher at The Steve Aronson Chair of Strategy and Agribusiness.
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