Brazil Takes Off? FDI outflows from Brazil's airport infrastructure under international concession: Evidence from Rio de Janeiro

This paper explores the interactions between the state and the multinational corporations (MNC) after undertaking Foreign Direct Investment (FDI) in the Brazilian airport sector. I develop a game-theory model and conduct a case study of Rio de Janeiro International Airport (Galeão) to explain the process by which the MNC renegotiates contract terms with the state, requesting a benefit to increase profits even under adverse conditions. Claiming that economic factors led to contract economic-financial imbalance, the MNC tries to create a credible commitment that it will disinvest in the business if the state does not grant a benefit. FDI outflow is therefore used as a political strategy to ensure financial returns.