Business groups in Mexico date from the late nineteenth century, particularly in the city of Monterrey, where at that time there was a wave of industrialization driven by the neoliberal policies of the federal government leading to the creation of the first groups of large manufacturing factories and the banks that financed them. This was due to the need to create capital unions and, in many cases, came about through families and marriages; the investments were made in a diversified form ranging from personal consumption, development of productive consumption goods, mining, passenger and cargo transport, commercial banking, agricultural and complementary services (Cerutti, 1986; Chavarin-Rodriguez, 2011).
At the beginning of the twentieth century, specifically in 1910, the Mexican revolution broke out. A civil war that lasted until 1920. For obvious reasons there are few studies on Mexican enterprise during that time, but already in the 1930s there was an enthusiasm for the creation of a financial system that allowed the creation of banks and financial companies to face the competition of foreign multinational companies. At that time, Mexican business groups were formed of commercial houses, transport companies and financial institutions (Hamilton, 1986). These were created by a group known as Monterrey. These were made up of families such as the Garza-Sada, owners of Cuauhtemoc--Moctezuma, Cydsa, Vidriera Monterrey, Alfa. At the end of the decade, the Garza Sada family kept the Cuauhtemoc Brewery and the Vidriera Monterrey (Cordero & Santin, 1986), which remain in the present era.
In addition, it is known that the formation of business groups was due to the dynamics of concentration of capital that occured in the process of industrialization due to the inefficiency of the market and the scarcity of capital resources (Chavarin, 2011). Similarly, the corporate governance of these groups has been characterized as having a concentrated ownership with few individuals, commonly members of the same family, within a network of businesses based on cross-ownership of shares or exchange of representatives on boards of directors. Therefore, the objective sought in this research is to analyze the impact of corporate governance structures of business groups and internationalization strategies based on FDI in performance, for which we analyze the theories of the agency. This work has the following sections: first, the theoretical framework is analyzed and the studies that have tried to test the relations between the variables are discussed.
In this section, we begin with the definitions of the terms used in the research, agency theory, as well as a literature review where the empirical evidence of the relationships between FDI, property structure and their effect on the performance of business groups is examined.
Today, business groups have other names, such as chaebol in South Korea or keiretsu in Japan. These groups are integrated both vertically and horizontally by subsidiaries that form business financial networks, i.e., networks with formal or informal long-term agreements with financial companies that provide financing to other companies through officially regulated mechanisms. These groups have arisen due to market failures, such as lack of financial market development, lack of justice, economic instability, relations between groups and certain economic agents (Fishan, 2001; Khanna 2005; Guriev & Rachinsky, 2005; Deseatnicov & Akiba, 2016). The groups also are formed by sociological and cultural conditions, where individuals seek to create social ties where friendship, the extended family in business networks is implicit (Granovetter 1995; Keister 1998)
Several family business groups have expanded internationally. It was in the 1990s that favorable conditions for such growth arose by consolidating the reforms in trade regulation initiated a decade earlier. This was an historic moment where the groups also started their internationalization strategies; the most common being foreign direct investment (FDI) which made them into multinational companies and caused them to become the dominant force in international trade.
The expansion of business groups has been either through the M & A strategy or Green Field where, according to UNCTAD (2016) studies, in 2015 there was a global FDI of USD 1.76 trillion. This was the highest level since the financial crisis of 2008-2009 when there was an increase in international mergers and acquisitions caused by the reconfiguration of the property structure and legalities, which meant a total of 15% of all flows of FDI at the global level (UNCTAD, 2016).
China was the third country with the most investments in FDI in 2015, just after the United States and Japan, with a total of 128 billion dollars occurring mainly through its mergers and acquisitions. In the Latin American region, companies invested 5%...