The Changing Dynamics of International Business in Africa

315 Pages·2015·1.044 MB·English

by  Ifedapo Adeleye, Kevin Ibeh, Abel Kinoti, Lyal White (eds.)

The Changing Dynamics of International
Business in Africa
AIB Sub-Saharan Africa (SSA) Series
Series Editors:
Ifedapo Adeleye, Lagos Business School, Nigeria
Lyal White, University of Pretoria, South Africa

Sub-Saharan Africa has recently been cited as the “next frontier for growth”, and
academics across business disciplines are increasingly focusing on this specific
territory of study. The AIB Sub-Saharan Africa (SSA) series addresses topical issues
concerning this emerging market. With contributions from leading scholars in
the field composed of Africans in the diaspora, non-African scholars with a keen
interest in the region and African scholars and consultants who reside in the
region, the series is uniquely multidisciplinary in nature with contributions from
the core business disciplines including strategy, entrepreneurship, marketing,
international business and human resources management. Other interesting areas
will include political economy, economic geography, development economics
and international economics.
Titles in the AIB Sub-Saharan Africa Book Series include:
Ifedapo Adeleye, Kevin Ibeh, Abel Kinoti and Lyal White ( editors )
THE CHANGING DYNAMICS OF INTERNATIONAL BUSINESS IN AFRICA
The Changing Dynamics
of International Business
in Africa
Edited by
Ifedapo Adeleye
Lagos Business School, Nigeria
Kevin Ibeh
Birkbeck, University of London, UK
Abel Kinoti
Riara University, Kenya
and
Lyal White
Gordon Institute of Business Science, South Africa
Selection, introduction and editorial matter © Ifedapo Adeleye,
Kevin Ibeh, Abel Kinoti and Lyal White 2015
Remaining chapters © Contributors 2015
Softcover reprint of the hardcover 1st edition 2015 978-1-137-51652-7
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Any person who does any unauthorized act in relation to this publication
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in accordance with the Copyright, Designs and Patents Act 1988.
First published 2015 by
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registered in England, company number 785998, of Houndmills, Basingstoke,
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Palgrave Macmillan in the US is a division of St Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-349-70370-8 ISBN 978-1-137-51654-1 (eBook)
DOI 10.1007/978-1-137-51654-1
This book is printed on paper suitable for recycling and made from fully
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processes are expected to conform to the environmental regulations of the
country of origin.
A catalogue record for this book is available from the British Library.
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Contents
List of Figures v ii
List of Tables v iii
Series Editors’ Preface x
Preface x ii
Acknowledgments x iv
Notes on Contributors xvi
1 The Changing Dynamics of International Business
in Africa: Emerging Trends and Key Issues 1
Ifedapo Adeleye, Lyal White, Kevin Ibeh and Abel Kinoti
Part I Inward FDI to Africa: Emerging Patterns,
Challenges and Research Agenda
2 An Empirical Analysis of the Effects of Foreign Direct
Investment on Domestic Investment in Sub-Saharan
Africa: Pre- and Post-Global Financial Crisis 15
Theresa Onaji-Benson
3 Knowledge Transfer through Expatriation:
How Do Subsidiary Employees Count? 32
Yetunde Anibaba
4 Chinese Investment in Africa: Avenues
for Academic Scholarship 52
Lite Nartey and Stephen Mezias
5 Brazilian Firms in Africa: What Makes Them Different? 76
A ny Freitas and Lyal White
Part II Outward FDI from and Intra-Regional FDI in
Africa: Emerging Trends, Prospects and Challenges
6 Patterns and Determinants of Intra-African Foreign
Direct Investment 101
Robert Rolfe, Alessandro Perri and Douglas Woodward
v
vi Contents
7 Rising Africa and Its Nascent Multinational Corporations 123
Kevin Ibeh
8 Failure of Africa-to-Africa Internationalization:
Key Factors and Lessons 148
Olawale Ajai
Part III Cases on the Dynamics of
International Business in Africa
9 Tata: An Indian Multinational’s Africa Journey 171
Lyal White, Dianna Games and David Cooper
10 Vale in Mozambique 188
Lyal White, Margie Sutherland and Stewart Nupen
11 Research in Motion/Blackberry: Managing Channel
Conflicts in Nigeria 205
Uchenna Uzo
12 Standard Bank: An African Tiger 220
Robert Grosse
13 Game in Africa: Seizing the Opportunity 242
John Luiz, Stephanie Townsend and Claire Beswick
14 FirstBank of Nigeria: Developing an Internationalization
Strategy 262
Ifedapo Adeleye, Nkemdilim Iheanachor,
Chris Ogbechie and Franklin Ngwu
(cid:2)(cid:2) (cid:2)
Index 289
List of Figures
4.1 Total Chinese investment in Africa by year 66
4.2 Number of Chinese investment projects 67
4.3 Geographic dispersion of Chinese investment in
Africa by year 68
4.4 Chinese investment in Africa by economic sector 69
4.5 Chinese investment by energy subsector 69
5.1 Growth of Brazil’s imports from and exports
to Africa (1997–2012) 81
5.2 Brazil’s top imports from Africa 81
5.3 Brazil’s top exports to Africa (1997–2012) 82
7.1 Sample contributions of African MNCs to
South–South FDI flows and partnerships 137
7.2 African MNCs’ market-seeking investments 141
7.3 African MNCs’ strategic asset/resource-
seeking investments 142
7.4 African MNCs’ relationship-seeking investments 142
10.1 Cattle loss during the Mozambique Civil War 199
10.2 Glossary 199
10.3 Selected commodity prices between 1990 and 2012 200
10.4 Mozambique’s anticipated coal production capacity 2 00
11.1 R IM Nigeria distribution model 2 08
11.2 D istribution model for Samsung Nigeria 2 10
11.3 S ales trend for phones by region in Nigeria
(January 2011 to October 2011) 2 13
12.1 S tandard Bank’s business units 2 30
12.2 C ompetitive conditions in South African banking 238
14.1 A frican banking statistics 280
14.2 GDP of SSA countries 282
14.3 Banking analysis in Sub-Saharan Africa 283
vii
List of Tables
2.1 FDI inflows 1 8
2.2 Gross fixed capital formation across selected groups 19
2.3 Inward foreign direct investment flows across
selected groups 2 0
2.4 Correlation matrix for period between 2006 and 2009 24
2.5 Correlation matrix for period between 2009 and 2012 24
2.6 Arellano–Bond dynamic panel data estimation,
two-step difference GMM results 26
2.7 List of all countries in the panel data set 29
2.8 Meaning of variables in the econometric analysis 29
3.1 Characteristics of respondents: management staff 36
3.2 Characteristics of respondents: knowledge recipients 37
3.3 Savitel’s skills transfer program: summary of findings 40
4.1 Primary variables coded in database 60
4.2 Summary table of numerical variables 61
4.3 Primary and secondary economic subsectors 64
4.4 List of activities 6 5
6.1 Greenfield projects in Africa by year 110
6.2 African FDI by business activity 111
6.3 Top ten source countries of inter-African FDI 112
6.4 Destination of African greenfield investments 113
6.5 Regression results for non-African investors and
African investors 1 15
6.6 Regression results for concentration of projects
by African investors by country 116
6.7 Regression results for South African, Kenyan and
Nigerian investors 1 17
7.1 Profile of MNCs from rising Africa 129
7.2 Sample infrastructure investments by MNCs from
rising Africa 1 38
10.1 Coal-focused capital projects proposed 201
11.1 Market share data for mobile phone sales in Nigeria 206
11.2 Price comparisons for formal and gray market
phones in Nigeria 2 12
11.3 Budget for sales team 216
viii
List of Tables ix
11.4 Cost of selected BIS plan amongst
Nigeria GSM operators 218
11.5 Market share trends for mobile phone sales in Nigeria 218
12.1 Performance of the Big 4 in 1999 229
12.2 Market shares of Big 4 South African banks, 2010 237
13.1 Massmart and Massdiscounters at a glance as at 2009 253
13.2 Massdiscounters financial performance for year
ending June 2009 254
13.3 Game locations in Africa as at 2009 255
13.4 Wal-Mart’s International segment as at 2013 258
13.5 Massmart/Wal-Mart financial results for
year ending December 2013 259
13.6 Massmart revenue, profit and annual growth: 2001–2012 259
13.7 Massmart’s divisional contributions, December 2013 260
14.1 2012 income statement of FBN Holdings Group 281
14.2 2012 Statement of financial position 284
14.3 Sample of Nigerian banks’ cross-border subsidiaries
in African countries and beyond, year ending 2012 285
14.4 Southern Africa banking statistics 286