Quotation Singh, Satwinder, Dhillon, Kirandeep, Kaulich, Florian, Chen, Weifeng. 2011. Location Determinants of FDI in Sub-Saharan Africa: An Empirical Analysis. In: Dynamics of Globalization: Location-Specific Advantages or Liabilities of Foreignness? (Advances in International Management, Volume 24), Hrsg. Christian Geisler Asmussen, Torben Pedersen, Timothy M. Devinney, Laszlo Tihanyi, 327-356. Bingley: Emerald Group Publishing.


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Abstract

The chapter adopts the international production typology offered by the OLI paradigm whereby firms are classified principally as market seekers, efficiency seekers, natural resource seekers or partner seekers. These motives to reach overseas are tested against 26 location factors, categorised under `business climate´, `market conditions´, `local resources´ and `incentive packages´, and three sets of control variables: industry, age and entry mode. The empirical analysis based on firm-level data from 15 sub-Saharan countries shows that, for all types of firm, the presence of local markets, regional markets and key clients are the positive determining location factors, followed by business climate factors, such as labour costs, the availability of skilled labour, raw materials and local suppliers. For market-seeking MNEs, the political and economic stability, infrastructure, country's legal framework and the transparency of investment all rate high. Importantly, the implication for host-nation promotion agencies is that once the motive to enter their economies is clear, they can - and should - play a skilful negotiation game with MNEs at the entry point itself. Based on the empirical analysis, a conceptual two-step approach to understanding FDI decisions, intimately linked to the liability of foreignness concept, is suggested.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Chapter in edited volume
Language English
Title Location Determinants of FDI in Sub-Saharan Africa: An Empirical Analysis
Title of whole publication Dynamics of Globalization: Location-Specific Advantages or Liabilities of Foreignness? (Advances in International Management, Volume 24)
Editor Christian Geisler Asmussen, Torben Pedersen, Timothy M. Devinney, Laszlo Tihanyi
Page from 327
Page to 356
Location Bingley
Publisher Emerald Group Publishing
Year 2011
URL http://dx.doi.org/10.1108/S1571-5027(2011)0000024020
ISBN 978-0-85724-991-3

Associations

People
Kaulich, Florian (Details)
External
Chen, Weifeng (University of Brunel, United Kingdom)
Dhillon, Kirandeep (University of Brunel, United Kingdom)
Singh, Satwinder (Brunel University, United Kingdom)
Organization
Institute for International Economics and Development IN (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5300 Economics (Details)
5323 Econometrics (Details)
5329 Economics of location (Details)
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