This paper aims to analyze the interaction between home country governments and Developing Country Multinational Companies (DCMCs). Draw on evidences from Brazilian political environment and Brazilian multinationals we investigate the mechanisms governments use to influence the internationalization process of domestic companies and firm’s political strategic responses to shape the home country political institutional environment in which they operate. FDI outflows from developing countries need to be understood considering contextual factors such as high levels of government involvement (Wright, Filatotchev, Hoskisson & Peng, 2005). Our main findings support this idea and indicate that home country government uses a series of formal and informal mechanisms in order to drive the international expansion of DCMCs in both entry and consolidation phase. Moreover, DCMCs political behavior in home country political environment is an important strategy to develop political resources and obtain above average returns from governmental benefits.
