Countries differ markedly in their framework of institutions and the development and sophistication of institutions (NORTH, 1990). These differences create opportunities for firms, such as foreign multinationals seeking to enter, but also difficulties in operating in foreign markets. Generally, the literature points out that institutions are country-specific and company strategies are, at least in part, determined by the institutions of their country of origin, by the country of destination of the investments and by the differences between the institutions of the countries of origin and destination (PENG; WANG; JIANG, 2008; BERRY; GUÍLLEN; ZHOU, 2010). The literature also points out that under conditions of greater institutional distance firms restrict their investments in response to risks and uncertainties (BERRY; GUÍLLEN; ZHOU, 2010; GATIGNON; ANDERSON, 1988). That is, the differences between countries generate uncertainty, asymmetry of information, additional administrative costs and difficulties in transferring knowledge to and from foreign subsidiaries (KOSTOVA; ZAHEER, 1999; CONTRACTOR et al., 2014). Thus, in internationalization for more institutionally similar markets, it is easier to do business (KOSTOVA; ZAHEER, 1999: KOSTOVA; ROTH, 2002) than in entries in more different markets. Therefore, differences between countries need to be taken into account in foreign investment decisions (GHEMAWAT, 2001; DOW; KARUNARATNA, 2006). However, the literature is less exhaustive in considering how firms are sensitive to institutional differences according to the strategic focus desired for the foreign country. That is, in spite of the determinism entailed in institutional aspects of the environment, it is necessary to consider how firms that seek to broaden markets or firms that seek to access to strategic resources are differently influenced by the institutional pressures and differences across countries.

In the last two decades there has been a notable international growth of firms from emerging countries, including those in Latin America - termed as multilatinas (CUERVO-CAZURRA; GENC, 2008) or "Global Latinas" (CASANOVA, 2009). Some well-known examples include Cemex, Arcor, Embraer, Natura, Bradesco, Falabella, Grupo AJE, Belcorp, among others, which have achieved remarkable success in their domestic markets and sought a more aggressive expansion on a global scale (BCG, 2014). The expansion of these emerging multinationals, or multilatinas, has been associated with two fundamental reasons: the search for markets and the search for strategic resources, or the upgrade of knowledge and technologies (CASANOVA, 2009a, 2009b; CUERVO-CAZURRA, 2008; STAL; CAMPANÁRIO, 2010) which cannot be found in their countries of origin (FERREIRA, 2008; CUERVO-CAZURRA, 2016; BUCKLEY et al., 2007). For example, the firms Natura and Politec, invested abroad to access scarce, and not easily transferable, knowledge assets. While Natura invested in France in search of market knowledge and Research and Development (R&D), Politec acquired a company in the US to improve its ability to compete in the North American market (OTALORA; CASANOVA, 2012).

Institutional theory makes it possible to understand the differences between countries in their various facets, but it also helps to explain the motivations for international expansion. On the one hand, the inefficiencies in the domestic market (CONTI; PARENTE; VASCONCELOS, 2016) can push firms to seek other markets (larger, more stable or more attractive) that Cuervo-Cazurra, Narula and Un (2015) termed escapism. Institutional theory also helps understanding that the internationalization of some firms may be a manifestation of the search for new knowledge that can only be accessed locally - that is knowledge that evolves differently as a result of the country's technological trajectories and of its institutional framework (NORTH, 1990; PENG; WANG; JIANG, 2008; BERRY; GUÍLLEN; ZHOU, 2010). To evaluate the institutional environment and measure how institutional differences influence the actions of individuals and firms, Pankaj Ghemawat (2001) created the CAGE taxonomy - which is the acronym for Cultural, Administrative, Geographic and Economic distances that separate countries. Other authors, such as North (1990) refer to the formal and informal dimensions. Berry, Guíllen and Zhou (2010) proposed to disaggregate the institutional distance construct into a set of multidimensional measures, including economic, financial, political, administrative, cultural, demographic, knowledge and global dimensions, as well as geographical distance to accommodate the different dimensions in which countries differ from one another. The CAGE taxonomy by Ghemawat (2001) has the advantage of being simpler and, unlike most existing approaches, considers the bilateral attributes of pairs of countries, besides the unilateral attributes of each country, and contemplates a sufficiently wide range of institutional diversities.

In this study, we analyzed the influence of institutional distances CAGE (GHEMAWAT, 2001) on the Brazilian FDI and how the strategic motivations to search for new markets and search for strategic resources can change the way institutional differences across countries determines foreign investment. The statistical study uses secondary data of the Brazilian foreign direct investment outflows with analyzes using multivariate regression. We suggest that institutional differences between countries may exert a negative influence on FDI, but that it is also necessary to consider the role of the strategic motivations, and their direct and moderating effects, on firms' investment decisions. For example, it is possible that strategic motivations may reduce the sensitivity of investment decisions to institutional uncertainties. This is especially relevant in the case of Brazil for three foundational reasons. First, Brazilian firms are still relatively inexperienced in conducting foreign investment operations (FLEURY et al., 2013). Second, given the inefficiencies of the Brazilian domestic market, the reason for escapism proposed by Cuervo-Cazurra et al. (2015) seems to be more emphatic than it would probably be for firms from developed countries. Third, studies on emerging economies are very concentrated in the countries and firms from Southeast Asia, especially China, and far less focused on the Latin American firms (STAL; CAMPANÁRIO, 2010).

This study has a conceptual contribution to the international business and strategy area. Mathews (2006a) brings Buckley's (2002) analysis about the field of study of international business (IB), which suggested that the international business research agenda of the twentieth century went through three main phases: to explain the flows of FDI (1960-1970), explain the strategy and organization of multinationals from developed countries (1970-1990), and the understanding of the development of the process of internationalization of firms and globalization (1980-2000), but pondering that the distinction made between firms from developed and emerging countries is lacking in this debate, and proposes the following question for the continuity of research in the 21st century: "What explains the current success of the internationalization strategies of firms from emerging countries?" Thus, it is important to combine the influence of the institutional environment with business-level strategies, a deterministic element with the orientation and choice of the firms. This is achieved with our proposal to analyze the motivations proposed by Dunning (2003) in addition to institutional theory in order to evaluate the strategy of internationalization of multilatinas and more specifically, Brazilian firms.

There is, therefore, a contribution in addition to other studies that have examined the influence of institutional aspects on FDI (e.g., Bénassy-Quéré et al., 2007), or institutional distance (Cezar & Escobar, 2015) and the specific endowment of natural resources in least developed countries in FDI (Aleksynska & Olena Havrylchyk, 2013), of the influence of institutional differences between country of origin and destination and the uncertainty generated by firms adopting strategies of isomorphism (Salomon & Wu, 2012). In this study, we propose strategic motivations as an essential moderator of the institutional differences between countries. That is, we contrast the institutional determinisms with the strategic responses of the firms.

This study is organized in four parts. First, we review the relevant literature and present the arguments that support the hypotheses. In the second part, we describe the method including sample and variables. We then reveal the results of the statistical tests. In part four, we formulated a comprehensive discussion and included suggestions for future research and limitations.

National institutions have the essential role of ensuring the efficient and effective functioning of market mechanisms, reducing transaction costs and risks (NORTH, 1990). The quality of institutions is an important determinant of FDI activity, in particular for least developed countries (BLONINGEN, 2005), where weak property protection increases the risks of expropriation, corruption increases costs and creates unpredictability, and poor infrastructure reduces profitability and reduces the attractiveness of countries to FDI (BLONINGEN, 2005).

Emerging economies have emerged as an important source of FDI abroad since the 1990s. For example, between 1980 and 2011, FDI outflows from emerging market multinationals increased by 20.7% and represented 31.8% of the world FDI in 2010 (FMI, 2013). Emerging multinationals invest not only in their neighboring, Asian or Latin American countries, for example, but also in developed economies (UNCTAD, 2004). Market constraints in emerging economies, for example in terms of purchasing power, are a determinant of internationalization (UNCTAD, 2004).

The current evidence on the distribution of Brazilian FDI abroad shows some regional concentration (UNCTAD, 2013), with the bulk of FDI concentrated in the Americas (about 70% of Brazil's FDI in 2008), followed by Europe (29%), with only 1% being for Asia, Africa and Oceania. Evolution shows a decrease in FDI in the Americas - from 86% in 2001 to 70% in 2008 - and higher concentration of Brazilian FDI in Europe - from 12% in 2001 to 29% in 2008.

Table 3 presents the means and standard deviation of the variables and their correlation. The correlations are not high and do not show any problems of multicollinearity. The Variance Inflation Factor (VIF) are well below the acceptable level of 10 (NETER; WASSERMAN; KUTNER, 1985), confirming that there are no problems of multicollinearity.

Table 3

	Mean	Standard Deviation	1	2	3	4	5	6	7	8	9	10
1. FDI	4.29	3.27	1.000
2. Cultural Distance	4.39	2.07	-0.552**	1.000
3. Administrative distance	13.48	2.02	-0.094	0.156	1.000
4. Geographic distance	5.18	2.99	-0.297*	0.356**	0.380**	1.000
5. Economic distance	2.73	2.58	0.048	-0.054	0.270*	0.172	1.000
6. Market seeking	5.45	1.83	0.595**	-0.374**	-0.071	0.018	-0.216	1.000
7. Strategic resource seeking	6.09	3.87	0.306*	-0.197	0.359**	0.466**	-0.102	0.678**	1.000
8. International trade	4.26	0.68	-0.079	0.123	0.127	0.063	0.047	-0.447**	-0.199	1.000
9. Inflation	1.16	0.95	-0.060	0.187	-0.321*	-0.538**	-0.114	-0.125	-0.422**	-0.007	1.000
10. Exchange rate	1.08	1.67	0.024	-0.212	0.046	0.112	-0.037	-0.049	0.146	0.313	-0.199	1.000

N=55,

Table 4 presents the results of the hypotheses tests. Model 1 includes the control variables. Models 2 to 5 test the four institutional distances CAGE. Models 6 and 7 include the two strategic motivations, and models 8 to 15 test the moderations. Model 16 is the complete model.

Table 4

	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6	Model 7	Model 8	Model 9
Cultural Distance		-0.920**						-0.785
Administrative distance			-0.186						0.853
Geographic distance				-0.501**
Economic distance					0.062
Market seeking						1.289**		0.916	3.246
Strategic resource seeking							0.284*
Cultural dist.* Market seeking								0.023
Administrative dist.* Market seeking									-0.147
Geographic dist.* Market seeking
Economic dist.* Market seeking
Cultural dist.* Strategic resource seeking
Administrative dist.* Strategic resource seeking
Geographic dist.* Strategic resource seeking
Economic dist.* Strategic resource seeking
Control Variables
International trade	-0.660	0.173	-0.542	-0.451	-0.685	1.701	-0.062	1.758*	1.650
Inflation	-0.175	0.100	-0.305	-1.015	-0.154	0.095	0.280	0.232	0.007
Exchange rate	0.084	0.200	0.069	0.070	0.092	-0.022	-0.013	-0.199	-0.022
N	55	55	55	55	55	55	55	55	55
R2	0.011	0.316	0.023	0.160	0.014	0.399	0.100	0.532	0.411
			Model 10	Model 11	Model 12	Model 13	Model 14	Model 15	Model 16
Cultural distance					-0.951**				-0.400
Administrative distance						-1.892*			2.031
Geographical distance			-0.809				-0.993**		-0.096
Economic distance				0.260				-0.079	-0.004
Market seeking			1.039*	1.387**					3.103
Strategic resource seeking					0.199	-2.096	0.296	-0.001	2.499
Cultural dist.* Market seeking									-0.007
Administrative dist.* Market seeking									-0.123
Geographic dist.* Market seeking			0.051						-0.087
Economic dist.* Market seeking				0.001					0.056
Cultural dist.* Strategic resource seeking					0.010				0.035
Administrative dist.* Strategic resource seeking						0.243*			-0.221
Geographic dist.* Strategic resource seeking							0,037		0.010
Economic dist.* Strategic resource seeking								0,080	0.092
Control Variables
International trade			1.951	1.774	0.623	0.721	0.865	-0.165	1.258
Inflation			-0.664	-0.209	0.481	0.494	-0.510	0.503	-0.757
Exchange rate			-0.001	0.005	-0.253	-0.098	-0.022	-0.075	-0.139
N			55	55	55	55	55	55	55
R2			0.538	0.439	0.382	0.212	0.384	0.163	0.690

*

p < 0.05

Model 2 tests the existence of a negative effect of cultural distance on the Brazilian FDI. A negative and significant coefficient (β=-0.920, p<0.01) confirms the negative effect, so that Brazilian firms tend to perform less FDI operations in countries that are culturally more distant from Brazil. This result may be evidence of the relatively small experience of Brazilian firms in internationalizing themselves and of the difficulty of operating in culturally different contexts. Model 3 does not confirm an effect of the administrative distance on the Brazilian FDI. Model 4 shows a significant negative coefficient (β=-0.501, p<0.01) for the geographic distance, confirming that the greatest geographical distance between Brazil and the foreign country is a barrier to the realization of Brazilian FDI. It is possible that infrastructural inefficiencies contribute to this result by hindering relations between the parent company in Brazil, and overseas subsidiaries (GHEMAWAT, 2001). Some examples include the deficiencies in communications and the internet that hinder communication and reporting relationships, and the deficiencies in the physical infrastructures of transportation and airports. Finally, model 5 does not confirm the predicted negative effect of the economic distance on the Brazilian FDI. Perhaps an explanation is found in the approach by Conti, Parente and Vasconcelos (2016), that have suggested that differences between countries may lead firms to seek other markets (larger, more stable or more attractive) and by Ghemawat (2003).

Model 6 tests hypothesis 2 on the effect of the market seeking motivation on the Brazilian FDI. A positive and significant coefficient (β=1.289, p<0.01) confirms larger FDI flows to countries that have more attractive markets. Market seeking motivations underlying the FDI by emerging market firms has already been noted by, for instance, Taylor (2002). There are several reasons for this type of FDI, which replaces or complements pre-existing export flows, highlighting the need for greater consumer proximity and improvement of commercial assets abroad such as marketing channels and brands (DUNNING, 1993).

Model 7 tests hypothesis 3 on the influence of a strategic resource seeking motivation - that is, for internationalizing through FDI to technologically more sophisticated countries. A positive and significant coefficient (β=0.284, p<0.05) confirms that there is a positive effect of a strategic resource seeking nature for the Brazilian FDI. This evidence is interesting and perhaps better understood when we consider that a part of the promotion policy of Brazilian industry supported by the BNDES sought to leverage technological skills (CASANOVA, 2009a,b).

Models 8 to 11 test hypothesis 4 on the moderating effect of market seeking motivation on the relationship between CAGE and FDI distance. The coefficients are not significant, and thus we cannot confirm the proposed moderating effect. This result is interesting but perhaps not completely surprising when we consider that firms tend to follow a strategy of searching for new markets to sell their production. In this case, it may be more common that firms choose to export or to establish partnerships in external markets, rather than implementing FDI. In addition, the search for markets presupposes that firms will essentially trade the same product, or a similar product, which would require a similar CAGE institutional profile between Brazil and the FDI host market.

Models 12 to 15 test hypothesis 5 on the moderating effect of the strategic resource seeking motivation on the relation between CAGE distances and the Brazilian FDI. The tests only confirm a positive and significant coefficient for the Administrative distance (β=0.243, p<0.05), confirming only partially H5. The variable administrative distance (GHEMAWAT, 2014) encompasses differences in factors such as colonial ties, lack of political and monetary association, political hostility, government policy and institutional weakness.

The complete model (model 16) includes all variables and shows no significant relationship to CAGE distances and strategic motivations. This is interesting especially considering there is no multicollinearity in the data, but it can show that institutional dimensions and distances are not absolutely and mutually exclusive. In fact, it is simple to understand that the distances between countries in one dimension possibly have a high level of relation in other dimensions. For instance, geographically more distant countries tend to have more dissimilar cultures and their own administrative systems will tend to evolve differently. Similarly, and following March's (1991) constructs of exploitation and exploration, it is likely that firms pursue a mix of motivations when entering foreign markets. That is, a dominant motivation can coexist with motivations, or objectives, that are somewhat more secondary.

An analysis of the data reveals that in the period 2010-12, the outflows of Brazilian FDI was directed to large and growing markets (market seeking) and attracted by strategic resources. With respect to the interactions between distance, motivations and FDI, only the search for strategic resources has a positive influence on the relationship between administrative distance and FDI, demonstrating that FDI flows are less sensitive to the impact of administrative distance when there is a strategic resource seeking motivation that underlies investment decisions.

The analysis of the Brazilian FDI destinations reveals greater concentration in the more developed countries (33% of the sample), while neighboring countries, such as Argentina and Chile, 16% and other emerging countries without geographical borders with Brazil, 51%. That is, about 84% of the Brazilian FDI is oriented to countries without geographical borders with Brazil. These evidences are relevant because they contrast with previous studies that noted a significant effect of geographical distance as a barrier to internationalization (e.g., BERRY; GUÍLLEN; ZHOU, 2010). Similarly, we note that the main destinations of Brazilian FDI (Austria, the Netherlands, the USA, Spain and Denmark) at least potentially leading to more economically developed countries. These countries of destination have more stable and efficient institutions reducing transaction risks and costs.

This study responds to the growing interest in investigating the role of institutions and the strategic motivations of firms in conducting international business. These implications may be especially relevant when analyzing emerging and Latin American economies, given, on the one hand, institutional inefficiencies (DUNNING, 2006; CUERVO-CAZURRA, 2015) and, on the other hand, the relatively small international experience of multilatinas (FLEURY et al., 2013). While the existing literature (see, for example, BUCKLEY, et al. 2007) has scrutinized the impact of many variables on FDI flows, such as: motivation for searching for markets and searching for strategic assets, political risks, institutional distance, business environment, and flow of exports/imports, our results allow for an understanding of how institutional distances (here evaluated in the four large CAGE dimensions) influences the outflows of FDI and how the strategic motivations for FDI can influence the predictable negative effect of higher levels of institutional differences between countries on FDI flows.

The study results show that the cultural distance has a negative impact on the outflows of Brazilian FDI, corroborating previous studies in other national contexts (KOGUT; SINGH, 1988; CHILD; RODRIGUES, 2005). The results are consistent with the study by Dikova and Van Witteloostuijn (2007) which focuses on firms from emerging economies. Using a perspective based on the theory of transaction costs, greater distance increases the uncertainty and risks of investments (HARZING, 2002).

The analysis of the strategic motivations reveals that the Brazilian FDI seeks large markets and strategic resources. Using the typology by Dunning (1993), but at the level of national investment as a whole, we have identified that the two primary motivations - market seeking and strategic resource seeking - are effectively relevant drivers of FDI. Scale gains and the technological and knowledge upgrade that FDI allows helps to build competitive capacity at the international level. Given that Brazil is in itself a large market, the motivation to search for markets may be the result of domestic institutional inefficiencies (e.g., infrastructure). In addition, the low purchasing power of the population imposes restrictions on the growth of firms. Thus, internationalization can be an escape (CUERVO-CAZURRA et al., 2015; CUERVO-CAZURRA, 2016) from the difficulties of accessing the domestic market. Regarding the strategic motivation to search for strategic resources, multinational firms earn, through FDI, specific assets (strategic resource seeking). Therefore, they take advantage of the market position of the acquired company to have access to intangible resources.

In addition to the contribution already pointed to the stock of knowledge applied to Brazil, the primary focus of this study where its contribution lies is in the contrast between the Institution-Based View and the strategic choices of firms, and their interactions, for internationalization through FDI. Because academic debate has focused on institutional aspects in more recent years, it is important to put the business strategies back into the equation. As strategies are not formulated in an isolated world it is foreseeable that there are multiple interactions between the strategies (already conditioned by the resources and advantages held) and external institutional elements (multifaceted). Perhaps this is the contrast, at least in part, between an institution-based view and a resource-based view. From a resource-based view, it is important to analyze whether the internationalization of Brazilian firms is based on the search for new resources - in a move of exploration in the typology by March (1991) - or in the possession and exploitation of pre-existing domestic assets to be exploited abroad - which would correspond to exploitation. In any case, it is still possible that the pressures to explore and prosper coexist.

It is still interesting how Brazilian firms react to institutional differences. The traditional response of the theory would be that they will tend to avoid territories with more dissimilar institutions, institutionally less sophisticated environments than its domestic market, and to seek partnerships as a way to better learn about the institutional framework in a country of destination. Evidence, however, indicates that Brazilian multinationals invest in other countries as the main mode of expansion and resort little to partnerships where they do not have at least control of operations (PINTO et al., 2017). Thus, there is still much to be understood about how Brazilian firms react to institutional differences in their internationalization and how the selection of markets can be driven by the motivations. Alternatively, how the entry form fits the institutional characteristics of the country of destination.