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Business Professor Presents Research on Central American International Companies

February 19, 2016

Communications and Marketing
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Professor Dina Frutos-Bencze teaches international business courses in the economics and business departmentProfessor Dina Frutos-Bencz, Ph.D. proposes that at least four family business groups in Central America have the potential to become global Latin American multinational companies (also known as global Multilatinas).

As part of Saint Anselm College's Faculty Research Colloquium Series, economics and business Assistant Professor Frutos-Bencze presented her research titled, "Can Central American Family Business Groups Become Global Multilatinas? Insights from Internationalization and Diversification Patterns" in the West Wing of the New Hampshire Institute of Politics (NHIOP) on Wednesday, February 10. She explored the strategies that 26 family businesses or "family business groups," in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama used to become international companies, including enlarging their range of products for various sectors.

"Academic business literature tends to overlook Central America," explains Frutos-Bencze about her research focus. "In the last 10 years, there has been more interest in Latin America, but even business research about companies there is scarce. Thus, I think Central America is a good ‘niche' topic."

She defines family business groups (FBGs) as, "a set of legally independent firms, operating in multiple (often unrelated) industries which are controlled by a family or family network through direct ownership, mutual shareholdership, or other forms of persistent linkage."

Despite a common misperception of Central America as housing a significant number of these types of businesses, only three– Copa Airlines, Avianca/Taca, and Pollo Campero– are classified as global Multilatinas. These are defined by their status as companies from countries colonized by Spain, Portugal, and France, which possess operations that add features to products outside their places of origin.

Frutos-Bencze explains that compared to Asian and multi-national companies from developed countries, Multilatinas are smaller in size, have less cutting edge technology, and fewer sophisticated resources. However, they have more in-depth knowledge of operations in difficult and changing environments as a result of political and economic instability.

In her analysis of these businesses, she studied the connection between the year they were established and the year of their first international activity. Most of these businesses started in a particular industry (such as food processing), and then expanded to another sector (such as real estate), where they could first process food and then also serve it in restaurants.

"FBGs have businesses in many sectors of the economy (real estate, manufacturing, agri-business, tourism, finance, etc.). They are highly diversified, and my study was looking at those diversification patterns prior to internationalization," said Frutos-Bencze.

Professor Frutos-Bencze reached several conclusions in her research, most importantly that at least another four FBGs have the potential to rank as global Latin American multinational companies: FIFCO, Grupo Poma, Durman Esquivel, and Grupo Terra.

Her main findings and results have been submitted and accepted by the International Journal of Business and Emerging Markets. She plans to expand her research into an analysis of network effects associated with FBGs.

Professor Frutos-Bencze conducted much of her research in Costa Rica during the summer of 2015. There, she had direct access to Multilatinas operating in the country and was able to network and access data for the all the countries in her study.

Story by Rosemary Lausier '16

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