In South Africa Multinational Enterprises (MNEs) have to contend with the typical adversarial relations with a host government. In addition, MNEs operate in an environment regulated by a government policy of Redress, aimed at changing the wealth profile of the country to reflect the ethnic demographics. Policies such as Broad Based Black Economic Empowerment, Affirmative Action and Preferential Procurement are interventionist and place additional burden on the MNEs. Implementations of these regulations are often the source of conflict between MNEs and the local government. Ethno-cultural distance aggravates the strained relations between the MNE and host government. The policy of Redress effectively legislates the incorporation of local third parties that are ethno-culturally related to government into the competitive strategies of MNEs. Joint ventures with locals are an acknowledged strategy to enter foreign markets, providing for legitimisation and access to networks. The choice in strategy when dealing with the home government of either a relational or transactional approach is transferable to the MNE host government environment. Political levels have proven to be inaccessible but successful business transactions with government are abundant. The transactional approach dominates as a result of the failure to establish any relations with the host government, negating the pursuit of the relational approach. Third parties play an enabling role in successful transactions, ranging from providing access to government employees up to securing the deal and transacting with the MNE at arms-length. The absence of any social capital in successful transactions requires re-evaluation of the role of social capital in bridging barriers in business relations. Possible explanations are in the linking that the social capital of the third party with the government and MNE employees respectively has, an extremely low threshold for social capital in successful transactions, the force exerted by the need for the products or services, or, most probable, the profit motive. The distance between the government and MNE is extreme as a result of the historical strife between the ethnic groups in the country and the policy of Redress. The connotation with the social environment deters the active pursuit of social capital to gain competitive advantage. / D.B.L.

In South Africa Multinational Enterprises (MNEs) have to contend with the typical adversarial relations with a host government. In addition, MNEs operate in an environment regulated by a government policy of Redress, aimed at changing the wealth profile of the country to reflect the ethnic demographics. Policies such as Broad Based Black Economic Empowerment, Affirmative Action and Preferential Procurement are interventionist and place additional burden on the MNEs. Implementations of these regulations are often the source of conflict between MNEs and the local government. Ethno-cultural distance aggravates the strained relations between the MNE and host government. The policy of Redress effectively legislates the incorporation of local third parties that are ethno-culturally related to government into the competitive strategies of MNEs. Joint ventures with locals are an acknowledged strategy to enter foreign markets, providing for legitimisation and access to networks. The choice in strategy when dealing with the home government of either a relational or transactional approach is transferable to the MNE host government environment. Political levels have proven to be inaccessible but successful business transactions with government are abundant. The transactional approach dominates as a result of the failure to establish any relations with the host government, negating the pursuit of the relational approach. Third parties play an enabling role in successful transactions, ranging from providing access to government employees up to securing the deal and transacting with the MNE at arms-length. The absence of any social capital in successful transactions requires re-evaluation of the role of social capital in bridging barriers in business relations. Possible explanations are in the linking that the social capital of the third party with the government and MNE employees respectively has, an extremely low threshold for social capital in successful transactions, the force exerted by the need for the products or services, or, most probable, the profit motive. The distance between the government and MNE is extreme as a result of the historical strife between the ethnic groups in the country and the policy of Redress. The connotation with the social environment deters the active pursuit of social capital to gain competitive advantage. / D.B.L.

Submitted by Marina Cavenaghi (ma.cavenaghi@hotmail.com) on 2017-01-27T21:19:22Z No. of bitstreams: 1 Dissertação Mestrado_Marina Cavenaghi.pdf: 850362 bytes, checksum: bacc659a2d7b2490916de426a8309f9a (MD5) / Approved for entry into archive by Fabiana da Silva Segura (fabiana.segura@fgv.br) on 2017-01-27T21:33:57Z (GMT) No. of bitstreams: 1 Dissertação Mestrado_Marina Cavenaghi.pdf: 850362 bytes, checksum: bacc659a2d7b2490916de426a8309f9a (MD5) / Made available in DSpace on 2017-01-30T12:21:42Z (GMT). No. of bitstreams: 1 Dissertação Mestrado_Marina Cavenaghi.pdf: 850362 bytes, checksum: bacc659a2d7b2490916de426a8309f9a (MD5) Previous issue date: 2016-12-12 / Dentro do campo de finanças, as determinantes de investimentos diretos estrangeiros e o modo de entrada das transações de fusões e aquisições (F&A) têm sido amplamente estudados. Contudo, não são muitos os trabalhos que exploram os efeitos das políticas de incentivos fiscais e financeiros do país anfitrião, no processo de atração de investimentos estrangeiros, e os impactos na estratégia de estrutura de propriedade adotada pelas multinacionais nas transações de F&A. Nesse trabalho o objetivo foi estudar os efeitos de incentivos fiscais e financeiros, concedidos pelo governo brasileiro no fluxo de investimento direto estrangeiro (IDE) para o Brasil, por meio de transações de fusões e aquisições. Sob a ótica da teoria de opções reais, o que se propõe nesse estudo é a verificação do efeito dessas políticas na decisão das multinacionais pela estratégia de estrutura de propriedade, no momento em que realizam investimento direto no Brasil, por meio de F&A. As políticas de incentivos do país de acolhimento agem como redutoras da incerteza do investimento e, portanto, na sua presença, as multinacionais estariam mais propensas a optar por estruturas de propriedade de maior comprometimento. Foram formuladas quatro hipóteses e analisadas, empiricamente, 1.513 transações de F&A de empresas brasileiras por multinacionais, no período de 2005 a 2015. Os resultados sugerem que tanto as políticas de incentivos fiscais, quanto as de incentivos financeiros, aplicadas pelo país anfitrião, afetam positivamente o fluxo de IDE para o Brasil. Em relação ao impacto desses incentivos na estratégia de estrutura de propriedade, adotados pelas multinacionais, os resultados indicam uma relação inversa ao esperado. / Within the field of finance, the determinants of foreign direct investment and the entry mode of M & A transactions have been extensively studied. However, there is not much work exploring the effects of the host country's fiscal and financial incentive policies on the process of attracting foreign investments, and these impacts on the ownership structure strategy adopted by multinationals in M & A transactions. The present study aims to study the effects of fiscal and financial incentives granted by the Brazilian government on the flow of foreign direct investment (FDI) to Brazil through merger and acquisition transactions. And, from the perspective of the Real Options theory, the study proposes to verify the effect of these policies in the decision of the multinationals by the strategy of property structure, at the moment in which they realize direct investment in Brazil through M & A. Host country incentive policies act as reducers in investment uncertainty, and therefore in their presence multinationals would be more likely to opt for more committed ownership structures. Four hypotheses have been formulated and empirically analyzed 1,513 M & A transactions of Brazilian companies by multinationals between 2005 and 2015. The results suggest that both the fiscal incentives and the financial incentive policies applied by the host country positively affect the flow of FDI to Brazil. In relation to the impact of these incentives on the strategy of property structure adopted by multinationals, the results indicate an inverse relation to what was expected.