Regional competitive advantage based on pioneering economic reforms: The case of Chilean FDI

Foreign affiliates of Chilean companies operating in Latin America were more profitable than similar local firms, but this difference in profitability has been decreasing over time. Two case studies of Chilean multinationals illustrate our hypothesis that one source of competitive advantage for Chilean firms was their know-how of business strategy during economic liberalization. Using empirical and theoretical considerations, we analyze whether this hypothesis is valid for other firms and industries.