How do State Owned Enterprise Multinationals behave abroad? A Multi-dimensional framework for analysis

ABSTRACT

Though State-Owned Multinational Enterprises (SOMNEs) make up around 15% of the world´s largest non-financial Multinational Enterprises (MNEs), little is known about why State-Owned Enterprises (SOEs) internationalize and how they behave once abroad. Whilst some scholars have claimed SOMNEs tend to behave as their private MNE counterparts, other scholars state SOMNEs transfer their “public mission” abroad. This article presents a novel, multi-dimensional framework designed to facilitate comparing the behaviour of SOEs and private enterprises abroad in the field of infrastructure.

KEYWORDS:

• State owned enteprises
• public enterprises
• public infrastructure internationalization
• State owned multinational enterprises

Acknowlegement

We would like to thank experts and industry executives for their generous time to conduct interviews towards this research, including: Rafael Angulo (Enel), Lucy Baker (Sussex Energy Group, University of Sussex), Daniel Chavez (TNI), Luis Alberto Chaves González (ICE Group), Alberto Cortés (University of Costa Rica), Lamberto Dai Prai’ (Enel Green Power), Enrique de las Morenas (Enel Green Power), Georgia Del Bo’ (Enel Green Power), Luca Lacobini (Greenpeace Italy), Flavia Gabriela Oyo Franca (OEC, Integrity Office), Raquel Monton (Greenpeace Spain), Mike Munro (former Chief Compliance Officer at Odebrecht OEC between 2016 and 2019), Carlos Oya (SOAS, University of London), Susana Sanjuan (Iberdrola), and Josefina Stubbs (RES4AFRICA).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Public infrastructure is the result of the capital investment made for public use in a society, for example for transportation (roads, bridges, tunnels, railways, airports), communications (postal, telecommunication and information and communication systems), water and sewage systems, electricity and gas systems, solid waste and urban systems. Investment in public infrastructure systems is essential for economic and social development and in most developing countries an infrastructure gap exists as the need for public infrastructure exceeds the available domestic capital for public use. This infrastructure gap can be bridged by MNEs in the form of direct investment and transfer of capabilities, among other instruments.

2. SOMNEs operating in public infrastructure has been the most active among the world’s major MNEs since 1990, when a significant number of former SOE operating nationally were transform into some the largest MNEs worldwide (Clifton, Comín, and Díaz-Fuentes 2007; UNCTAD 2008). In addition to foreign direct investment, SOMNE transfer abroad capabilities to design, build, operate and maintain public infrastructure through other instruments such as concessions or management contracts.