Latin America: State-owned TNCs

Abstract

Internationalization is dynamic process that many economists around the world try continually to understand and analyze. Under globalization the borders disappear gradually due to the FDI flows. The main actors of the modern economy are the multinationals, which control more than 70% of the world trade and industry. In Latin America transnationalization has led to the rise of proper TNCs – “translatinas”. At the same time, one of the interesting phenomena of the modern world economy is the growing role of state-owned multinationals. State-owned multinationals have recently gained a significant role in the global economy. Economists around the world observe a reinvention of state ownership. Though the number of state-owned “translatinas” appears reduced, due to their size and strategic importance these play key role in countries’ economies. The majority of recent researches on “translatinas” focuses on quantitative indexes, however, because of the weakening investment flows in the region, the study of the qualitative aspects of “translatinas” has become more relevant, particularly addressing the ones with state participation. There are several state-owned enterprises in Latin America that have become multinationals, and they are the most powerful, successful and the most significant Latin American companies. After having saturated their respective domestic markets, “translatinas” started to invest abroad and have become sponsors of international projects first in Latin America, and then all over the globe. The article analyzes how state-controlled “multilatinas” influence economic growth in Latin American countries from the prospective of international competitiveness. The authors concentrate on the role of state-owned “translatinas” in enhancing infrastructure, developing information and communication technologies, innovating, and improving human capital.