Nascent multinationals from West Africa: are their foreign direct investment motivations any different?

Kevin Ibeh, Idika Awa, Dilshod Makhmadshoev, Nnamdi Madichie

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    Explores the motivations underpinning the FDI activities of nascent MNEs from West Africa.

    Adopts a case study approach entailing the triangulation of interview data with documentary evidence on two leading West African financial service companies with FDI footprints in over 50 countries.

    Evidence suggests the primacy of market-seeking motivations in explaining the FDI activities of the explored nascent MNEs, with relationship, efficiency and mission-driven motivations emerging as strong sub-themes. Having neither the global resonance of their traditional counterparts nor the government-augmented resource profile of their Asian counterparts, the study firms appear to have shied away from costly strategic asset and prestige-seeking FDI, and preferred psychically and institutionally proximate sub-Saharan African markets and non-organic collaborative entry modes.

    The above insights should be considered tentative given the study’s limited evidence base. This underscores the need for a larger scale empirical effort to assess the propositional inventory outlined at the end of this paper.

    Africa’s growing population of MNEs are urged to continue to strengthen their positions across African markets, view these regional markets as a platform to learn and upgrade their capabilities for future expansion into more challenging global markets, and to augment their limited resource profiles, including by tapping into their global diaspora networks. Policy makers should support their market-seeking initiatives given evidence that they could be a pathway to higher order FDI motivations. This evolutionary approach reflects enduring lessons from earlier generations of MNEs. Policy makers should also support continuing intra-African investment flows as a pathway to creating more sizeable, integrated African markets and generating positive spill-overs, including in typically blind-sided post-conflict or fragile African markets. This also entails pushing for cross-border regulation needed to minimise the transfer of systemic risks across countries.

    The study provides rare empirical evidence on hitherto neglected MNEs from sub-Saharan Africa, thus extending the geographic compass of research on FDI motivations. It identifies some distinctive aspects of the explored MNEs’ FDI behaviour, including the previously unheralded mission-driven motivation, whilst also revealing shared characteristics with traditional MNEs and EMNEs.
    Original languageEnglish
    Number of pages31
    JournalInternational Marketing Review
    Early online date14 Jun 2018
    Publication statusE-pub ahead of print - 14 Jun 2018


    • multinational enterprises
    • Africa
    • EMNEs
    • MNEs
    • foreign direct investment
    • motivations


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