Title: Global demand, regional business dynamics and local firm growth

Authors: Andrés Jung; Cecilia Plottier; Heber Francia

Addresses: Departamento de Economía, Facultad de Ciencias Empresariales, Universidad Católica del Uruguay, Av. 8 de Octubre 2801, 11600 Montevideo, Uruguay ' Departamento de Economía, Facultad de Ciencias Empresariales, Universidad Católica del Uruguay, Av. 8 de Octubre 2801, 11600 Montevideo, Uruguay ' Departamento de Economía, Facultad de Ciencias Empresariales, Universidad Católica del Uruguay, Av. 8 de Octubre 2801, 11600 Montevideo, Uruguay

Abstract: Latin America, particularly MERCOSUR region, faces an extraordinary expansion of global demand, partially originated in Asia, for natural resources based products. Production and exports of these products have increased significantly, generating a strong regional business dynamics that favours local firm growth, even in smaller countries whose industries take part in regional value chains with global presence. Our empirical analysis confirms that a high participation of regional (MERCOSUR) exports in world trade by industry (i.e. food and agro energy products) seems to be a driver for local (Uruguayan) firms' growth. We find that in those competitive industries with increasing productivity, local firms may grow faster. Also, activities related to the entrepreneurial orientation of the firm (i.e. innovation and export activities) show a strong association with firm employment growth rates. We claim that this perspective contributes to a better understanding of socio-economic reality, competitiveness issues and business strategy in the developing world.

Keywords: firm growth; global demand; industrial dynamics; regional development; innovation; regional exports; Mercosur; Latin America; regional business dynamics; local firms; Uruguay; entrepreneurial orientation; entrepreneurship; competitiveness; business strategy.

DOI: 10.1504/IJTGM.2013.051550

International Journal of Trade and Global Markets, 2013 Vol.6 No.1, pp.66 - 82

Published online: 29 Sep 2014 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article