Outward foreign direct investment and firm internationalisation from Sub
      Saharan Africa
Creators: name: Fasanya, Oludotun
Publisher: name: Lancaster University
Year: 2018

description: Sub-Saharan Africa (SSA) is a region with a population of over 1 billion
      people and abundant natural resources. With a current GDP of about US$1.6
      trillion and an average GDP growth of about 5% over the last decade, it is
      fast developing into a vibrant business region. Its firms are also rapidly
      evolving to become competitive international players. With immense
      potential, SSA is one of the last unexplored frontiers of business, and
      conducting research into its emerging OFDI and internationalisation
      phenomenon is both interesting and important. Adopting an inductive
      methodology, this thesis explores the phenomenon at both country and firm
      levels through the use of a funnel approach.
      
      Specifically, this research investigates the important OFDI push and pull
      influencing factors, and the internationalisation process of indigenous
      firms described as SSA MNEs. It also examines the relevance of FDI and
      internationalisation theories to SSA. Based on a detailed literature
      review and conceptual foundations, a broad range of OFDI factors were
      developed into a comprehensive OFDI framework of twenty push and pull
      factors for SSA. In a subsequent firm-level analysis, this framework was
      used to underpin qualitative case studies from firms in South Africa,
      Nigeria, and Kenya, and interviews were conducted with senior executives.
      Case findings reveal fourteen influential push and pull factors in the
      region, with enterprise strategy and market growth being the most
      important push and pull factors respectively. The results also show that
      the internationalisation of SSA MNEs occurs through an incremental process
      that takes time, with patterns indicating the use of either systematic or
      unsystematic international market selection methods. For the purpose of
      subsidiary control, locational fit, and risk mitigation, SSA MNEs use a
      mixture of foreign market entry modes, such as greenfield investment,
      joint ventures, and licensing. Traditional FDI and international business
      theories relevant to SSA are identified, and it is found that several
      emergent approaches find support including the ‘firm resilience
      capabilities’ argument of this thesis. Based on general findings and
      syntheses, the thesis advances a taxonomy of SSA MNE’s which outlines
      internationalising firms from the region as market growth optimisers,
      strategic asset aggregators, networks consolidators, or low-cost market
      converters.
      
      With regard to the enhancement of market growth, the findings indicate the
      importance of openness to trade to internationalising SSA firms. The
      thesis therefore considers the impacts of Brexit on SSA MNEs with EU
      operations and recommends they develop strategies that will mitigate the
      risk of potential export trade limitations and market fragmentation after
      Brexit. Such firms providing financial services in the UK should also
      restructure their legal entities to accommodate potential changes to EU
      financial passport conditions after Brexit. Generally, SSA MNEs carrying
      out OFDI should deploy enterprise strategies that allow for both the
      reduction of deficiencies in institutional mechanisms and for the
      leveraging of their resilience capabilities for market growth. Overall,
      the thesis suggests that it enhances the international business discourse
      and it makes an original contribution to the understanding of OFDI and
      internationalisation from SSA.