Analysis of the motivations and environmental influences of the realization of foreign direct investment of german companies in Brazil

Abstract

The movement towards the internationalization of multinationals was perceived as a process of deepening the corporate strategies of globalization and market competition. Considering the representativeness of Brazil as an environment that attracts investments by German companies and their participation in the Brazilian business environment, it is important to understand how the local context influence the process of internationalization. This article investigates the motivations of German firms to conduct Foreign Direct Investments (FDI) in Brazil and the influences of the local context. Through an exploratory qualitative research, the process of internationalization of five German multinationals was investigated. It was found that the convergence of interests of the countries’ government has motivated and influenced the conduction of FDIs. Incentives were given by the German government for the internationalization of firms, while the Brazilian market had presented a potential to growth. Social, cultural and technological characteristics of the country also motivated investment. This process suffers more influenced by factors associated with the German or even the global environment than the Brazilian environment, although the reasons for the start of FDI is largely motivated by the characteristics of the Brazilian market.