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Handbook on the Geopolitics of Business

Handbook on the Geopolitics of Business

Elgar original reference

Edited by Joseph Mark S. Munoz

In recent years, rapid globalization, novel technologies and business models, as well as economic and political changes have transformed the international business landscape. This pioneering volume offers a comprehensive discussion of the new global terrain and makes a strong case for the consideration of geopolitics in both the study and practice of modern-day business.

Chapter 12: Asset-seeking behavior of MNCs and African regional integration

Nathaniel O. Agola

Subjects: business and management, international business


Multinational corporations (MNCs) make their investment and locational decisions based on specific strategic and non-strategic assets targeting. In essence, such decisions are made by business executives based on what they perceive as attractive factors about an investment location. The core competencies of the multinational corporation can then be leveraged to exploit the location – specific attractive factors to achieve goals and objectives of a multinational corporation. According to Dunning and Lundan (2008), a MNC’s main motive for foreign direct investment (FDI) is predominantly guided by resource-seeking behavior targeting natural resources, markets, efficiency seeking, and strategic asset or capability seeking. We can therefore perceive MNC investments into the African region as essentially grounded on what resources and assets foreign companies are looking for and perceive to be readily available at the least comparative costs. The objective of this chapter is to analyse these assets within the continent and to generally highlight MNCs’ behavior toward these assets. We use FDI projects or activity sectors as a proxy for assets MNCs seek for in Africa. Against this backdrop, this chapter ties in the issue of African regional integration with foreign direct investments to interrogate the issue of whether increasingly expanded market size due to regional integration factor has been recognized as an asset worth exploiting by MNCs.

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