Few Latin American companies have achieved global leadership.¹ True, many of them do extensive business in the region beyond their home markets and may even be well known in it, but that kind of recognition remains elusive at the global level. Why do Latin American companies still lag behind in their attempts to create world-scale businesses?

The fact that these companies operated for many years in protected domestic markets gave managers little incentive to develop a global orientation and a vision for expansion abroad. Neither did the region’s underdeveloped capital markets. But the gradual opening of product markets and improved access to capital are creating opportunities for global expansion—and not a moment too soon. Relatively small home markets mean that Latin America’s companies are running out of headroom for growth, while the region’s volatile economic conditions have held back consumer and business demand.

Yet a handful of Latin American companies have overcome the inertia to establish global leadership positions in their respective industries. These international competitors include, among others, Embraer, the Brazilian aircraft manufacturer; Companhia Vale do Rio Doce, the Brazilian...