The Emergence of Latin Multinationals: Spain, Mexico and Brazil

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The Emergence of Latin MultinationalsSpain,
Mexico and Brazil
Javier Santiso Deputy Director/Chief
Economist OECD Development Centre
World Economic Forum ? Chile 25-27 April, 2007
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The IBEX 35 A Latin Flavour
Source Bolsa de Madrid, October 2006.
60 of Spanish capitalisation
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Latin America a helping hand for Spain
Source OECD Development Centre 2007, based on
Annual Reports.
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Spain a helping hand for Latin America
Source OECD Development Centre 2007, based on
Annual Reports.
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Spanish multinationals a helping hand for Latin
America
Fiscal contribution of Telefónica per country in
2005
Fiscal contribution of Telefónica as of GDP in
2005
3500
0.70
3000
0.60
2500
0.50
2000
0.40
Euros Millions
1500
Total fiscal contribution Euro 7266
0.30
1000
0.20
500
0.10
0
0.00
Perú
Chile
Brasil
México
España
Colombia
Argentina
Perú
Venezuela
Chile
Brasil
México
España
Colombia
Argentina
Venezuela
Source OECD Development Centre 2007, based on
Telefónica Annual Report.
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Spanish multinationals a helping hand for Latin
America
Source OECD Development Centre 2006, based on
Telefónica data.
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Spain has become one of the leading direct
foreign investors in Latin America
Source UNCTAD, World Investment Report 2006.
Source Ministerio de Industria Turismo y
Comercio de España, 2006.
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Spanish multinationals have a huge stake in
Latin America
Source OECD Development Centre 2007, based on
Annual Reports.
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leaving other European firms far behind
Source OECD Development Centre 2007, based on
Annual Reports.
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leaving other European firms far behind
Source OECD Development Centre 2007, based on
Annual Reports.
12
Spanish multinationals also generate some of the
highest employment rates in Latin America
Source OECD Development Centre 2007, based on
Annual Reports.
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Leaders of the globalisation process in Latin
America are Mexico
Source OECD Development Centre 2007, based on
América Economía.
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and Brazil
Source OECD Development Centre 2007, based on
América Economía.
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Emerging multinationals from recipients to
foreign investors
Investments in 2006
Investments in 2000
90000
50000
Outward
80000
Inward
Inward
Outward
40000
70000
60000
30000
50000
US millions
40000
US millions
20000
30000
20000
10000
10000
0
0
-10000
India
Peru
China
Brazil
Chile
Peru
India
Chile
China
Mexico
Brazil
Mexico
Argentina
Colombia
Venezuela
Argentina
Colombia
Venezuela
Source OECD Development Centre 2007, based on
Thomson Datastream (Economist Intelligence Unit).
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Mexico and Brazil leading the investment trend
abroad
Source OECD Development Centre 2007, based on
Thomson Datastream (Economist Intelligence Unit).
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and competing with China and India
Source OECD Development Centre 2007, based on
Thomson Datastream (Economist Intelligence Unit).
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Capital flows from emerging markets are
increasingly important
Source OECD Development Centre, 2007 based
on UN Comtrade datababase, World Bank.
Source World Bank, Global Development Finance,
2006.
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and South-South flows are a key financing
source, both in Asia and Latin America
Note The Emerging countries category excludes
most African countries.
Source OECD Development Centre 2007, based on
Thomson Datastream (Economist Intelligence Unit).
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LatAm companies have multiplied their
acquisitions at home and abroad
Source OECD Development Centre 2007, based on
BBVA Corporate Finance.
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helped by the fall of cost of capital
Data for 2007 is estimated and includes recent
deals
Source OECD Development Centre 2007, based on
Economist Intelligence Unit, 2007.
Source OECD Development Centre 2007, based on
Emerging Markets Bond Index - Global, 2007.
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helped by the fall of cost of capital
Data for 2007 is estimated and includes recent
deals
Source OECD Development Centre 2007, based on
Thomson Datastream (Economist Intelligence Unit).
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Increasing appetite for overseas expansion can
also be seen in other countries such as India
Source OECD Development Centre., 2007 Based on
Dealogic and local press.
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Conclusions

• Globalization strategies have turned into success
  stories in Spain, Latin America and other
  emerging markets.
• Multinational groups are becoming leaders in
  their domestic market but also in foreign
  markets.
• In the future we will see more emerging giants
  from Latin America and Asia taking over
  OECD-based firms and continuing to be at the
  centre of the globalization process.

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Thank you!
For more information contact Javier Santiso
javier.santiso_at_oecd.org
Based on Santiso, J. (March 2007) The Emergence
of Latin Multinationals, OECD Emerging Markets
network Working Paper, OECD Development Centre,
Paris.