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Do Strategic Motives Affect Ownership Mode of Foreign Direct Investments (FDIs) in Emerging African Markets? Evidence from Ghana
Author(s) -
Dadzie Samuel Ato,
Owusu Richard Afriyie,
Amoako Kwarteng,
Aklamanu Alphonse
Publication year - 2016
Publication title -
thunderbird international business review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.553
H-Index - 37
eISSN - 1520-6874
pISSN - 1096-4762
DOI - 10.1002/tie.21852
Subject(s) - multinational corporation , subsidiary , business , joint venture , emerging markets , foreign direct investment , industrial organization , order (exchange) , affect (linguistics) , internationalization , marketing , economics , international trade , business administration , finance , linguistics , philosophy , macroeconomics
The objective of this study is to examine the influence of ownership, location, and internalization‐specific factors, as well as strategic motives on ownership choice of foreign subsidiaries in Ghana. The authors use a quantitative methodology in order to statistically explore the relationships between dependent and independent variables by using the logistic regression model. The analysis was based on 115 manufacturing investments made by multinational corporations (MNCs) from different countries in 1994–2013. The results indicate that contractual risk leads to the choice of whollymowned subsidiary while cultural distance and country risk lead to the choice of the joint venture. In the case of the motives, efficiency‐seeking and resource‐seeking FDIs lead to the choice of the joint venture. © 2016 Wiley Periodicals, Inc.