Internationalization with Impact: Insights from a New Study on Multilatina Firms

A growing number of Latin American firms are expanding their operations outside their countries of origin. These firms — known as “multilatinas” — now operate subsidiaries in more than 116 countries. Their growth raises a crucial question: Is outward investment beneficial or harmful for the economies of Latin America and the Caribbean (LAC)? A new IDB study, “Multilatinas in Motion: Characteristics, Motivations, and Policy Guidelines” (available in Spanish) profiles these firms, analyzes their motivations, and puts forward policy recommendations to ensure that internationalization enhances productivity, creates quality employment, and strengthens local capabilities. These outcomes are consistent with the findings of the broader economic literature on foreign direct investment.

Why does this matter now?

When domestic firms invest abroad, concerns often arise about potential drops in employment, exports, or know-how in the home economy. However, recent research acknowledges that internationalization through outward foreign direct investment (OFDI) can yield productivity gains and strengthen firms’ capacities through economies of scale, learning in more competitive markets, and access to strategic assets. These benefits rextend beyond the investing firms themselves and may also benefit their countries of origin more broadly, through knowledge transfer or the expansion of supplier networks.

Given the benefits internationalization brings to multilatinas’ home economies, understanding how they evolve is important for informing public debate and guiding policy-making. This study profiles these firms in depth, assesses their economic and geopolitical significance, and identifies the factors that enable or constrain their expansion abroad. 

Ten key findings on multilatinas

These firms represent a broad, diverse group, encompassing large regional conglomerates and highly specialized medium-sized firms, and ranging from young tech start-ups to firms that have operated in natural resource–intensive sectors for over a century.

The analysis draws on two data sources: a study of 156 publicly listed multilatinas and an original survey of firms across the region. The report’s ten main findings are as follows:

• Geographic concentration: The group of publicly listed companies included firms originating in 15 LAC countries. However, more than 85% of these are headquartered in just five countries (Brazil, Mexico, Chile, Argentina, and Colombia), a share on par with these economies’ contribution to regional GDP. Moreover, 13% of these firms have established their legal headquarters in low-tax jurisdictions, a pattern particularly evident among Argentinian companies.
• Relative size: Multilatinas are much smaller than their global counterparts and firms from other emerging regions, in terms of both employment and sales. The largest multilatinas are from Brazil and Mexico, in line with the relative size of these countries’ domestic economies.
• Sectoral diversity: Multilatinas operate across a wide range of industries, including manufacturing, modern services (e.g., software), traditional services (e.g., trade), energy, mining, and agribusiness. They also operate in technology-intensive sectors such as aerospace, telecommunications, and pharmaceuticals.

• Competitive profitability: Profits vary substantially across sectors. Firms in energy and mining, telecommunications, transportation, and logistics report the highest margins. The same is true of smaller multilatinas (those with fewer than 1,000 employees). On average, their profitability is comparable to that of large global firms, as measured by EBITDA (earnings before interest, taxes, depreciation, and amortization).
• Geographic reach: On average, multilatinas operate subsidiaries in 7.3 countries (excluding their country of origin). Nearly all (92%) have a presence in other LAC countries, and a large share also operates in North America, primarily in the United States. Many also have subsidiaries in Europe (41%), but fewer do so in Asia (28%). Overall, multilatinas operate in 116 countries, with the United States, Peru, and Colombia hosting the largest number of subsidiaries. By country, Brazilian firms exhibit the highest levels of internationalization, while by sector, manufacturing firms do so, as measured by geographic diversification.
• Strategic motivation: Companies’ main motivations for international expansion are accessing new markets, strengthening their presence in geographically close or culturally similar regions, and leveraging capabilities in host markets to operate more efficiently. However, many firms also note that internationalization reduces their exposure to macroeconomic instability, regulatory constraints, and policy volatility in their home countries.
• Barriers to internationalization: The main obstacles facing firms include restrictive regulatory environments and legal uncertainty in destination countries, difficulties accessing financing, and a lack of support services to facilitate foreign market entry.
• Environmental commitment: Most multilatinas have implemented at least one environmental initiative. The most widely used tools include sustainability programs (such as waste management, energy efficiency, and emissions reductions), green investments, and the publication of sustainability indicators or reports. In contrast, the issuance of “green” financial instruments is relatively uncommon, while the only environmental certification with a relatively high adoption rate is ISO 14001. The share of firms that disclose information on their sustainability (and are subject to this to external audits) is comparable to that of higher-income global firms.
• Social and corporate responsibility: A very high share of firms (93%) report implementing corporate social responsibility and community development programs (such as ensuring good working conditions, investing in social housing, rural development, and literacy campaigns). The same share also reports having formal corporate governance frameworks in place, including codes of ethics, statutes to protect shareholder rights, and policies to ensure transparency and public disclosure of information.
• Gender gap: The share of multilatinas with women in leadership positions is relatively low. Some 25% of the surveyed firms have no women on their boards of directors, and 34% have none in senior management. Only four firms (2.6%) had a woman serving as CEO. However, these figures are broadly consistent with those observed among comparable groups of publicly listed companies. At the same time, nearly 60% of firms report implementing gender equality initiatives. Gender inclusion policies within multilatinas are strongly associated with the presence of at least one woman in senior management, on the board, or in the CEO position.

Building a policy and research agenda

International evidence suggests that stable regulatory environments, competitive financing programs, market-entry facilitation and support services, and public–private coordination mechanisms are critical to promoting the international expansion of multilatinas. Public policies can catalyze this process, particularly for high-potential medium-sized firms with more limited organizational capacities, which experience greater uncertainty during expansion. 

To date, relatively few LAC countries have implemented explicit mechanisms to support OFDI, although the issue is gradually coming to the forefront of the region’s policy agenda. Developing research in this field could help inform decision-making. 

The key priorities for the research agenda include: 

• Longitudinal firm-level studies to track internationalization trajectories through OFDI, including the transition from exporting to OFDI and the relationship between this and productivity.
• Analysis of the impact of OFDI on technological innovation, digital adoption, and the development of dynamic capabilities.
• Evaluations of the relationship between internationalization and the labor market, including income distribution and job quality.
• Research into the role of export and investment promotion agencies and their alignment with firms’ business strategies.

The road ahead

Understanding the motivations, impacts, and constraints affecting LAC firms investing abroad is more than just an academic priority—it is essential for rethinking productive development, regionalization, and international integration strategies in the region. Multilatinas are an example of how firms can adapt to the global environment by seizing opportunities to scale capabilities, upgrade productive structures, and foster virtuous cycles of business learning. However, realizing this potential requires financial, institutional, and policy environments that support rather than hinder this growth. 

This study contributes to that effort by asking new questions and providing robust evidence to support public and private decision-making that fosters a more inclusive, resilient, and transformative approach to productive internationalization. 

To find out more, download the full report, Multilatinas in Motion: Profiles, Motivations, and Policy Guidelines.

This blog was co-authored by: Juan Blyde, Pablo García, Andrés López and Paulo Pascuini.