The role of political factors in the internationalization of companies: the case of Energias de Portugal (EDP) in Brazil

Abstract

This study aims at analyzing the role of political factors and their relation to market factors in the internationalization process of multinational companies. This procedural case study allows the dynamics of this phenomenon to be analyzed in three levels: national, industrial, and organizational environments. A theoretical review on the multinational company and on the role of political factors is carried out. Subsequently, the internationalization process of a Portuguese company with public capital, Energias de Portugal (EDP), is described and analyzed. One concludes that the possession of abilities, technical resources, and know-how for the company to enter and consolidate in Brazil were needed conditions, but they were not enough to enable EDP’s internationalization process in Brazil; and that EDP’s history in Brazil represents the case of a company from a country with institutional stability which developed new abilities in order to deal with the political environment and to mitigate the risk.