Cross‐border expansion and competitive interactions of indigenous mobile network operators in sub‐Saharan Africa

• Published date: 01 January 2019
• Author: Elizabeth L. Rose,Marcellinus C. Dike
• Date: 01 January 2019
• DOI: http://doi.org/10.1002/tie.21971

THE INTERNATIONALIZATION OF AFRICAN FIRMS

Cross-border expansion and competitive interactions of

indigenous mobile network operators in sub-Saharan Africa

Marcellinus C. Dike

1

| Elizabeth L. Rose

1,2

1

Aalto University, Aalto, Finland

2

University of Leeds, Leeds, UK

Correspondence

Marcellinus C. Dike, Aalto University, P.O. Box

21230, FIN-00076 AALTO, Finland.

Email: marcellinus.dike@aalto.fi

Emerging-market multinational enterprises (EMNEs) have become major players in the global

economy, with an increasing share of global foreign direct investment (FDI). Indigenous mobile

network operators (MNOs) in sub-Saharan Africa (SSA) are not left out in this pursuit, as they

seek growth and competitiveness beyond their domestic markets. We investigate the FDI loca-

tion choices and competitive interactions of the five indigenous SSA MNOs that had internatio-

nalized as of 2014 and find that, contrary to the literature, these EMNEs, operating in a key

and rapidly developing industry, did not tend to commence their cross-border expansion in

geographically close markets. In addition, the MNOs are more likely to invest in countries with

stronger control over corruption and do not appear to engage in heavy head-to-head competi-

tion with their rivals. These findings contribute to the internationalization literature in the con-

text of the investment and competitive behaviors of the currently underexplored indigenous

SSA multinationals.

KEYWORDS

competitive interactions, emerging-market multinational enterprises, FDI, mobile network

operators, sub-Saharan Africa

1|INTRODUCTION

Spurred by the quest for gaining access to markets and natural

resources, along with enhanced operational efficiency and competi-

tiveness, emerging-market multinational enterprises (EMNEs), includ-

ing those from developing and transition economies, have become

major players in the global economy. EMNEs are said to have

accounted for an increasing share of global foreign direct investment

(FDI) (Kedia, Rhew, Gaffney, & Clampit, 2015; McAllister & Sauvant,

2013; United Nations Conference on Trade and Development

[UNCTAD], 2014). The stock of outward FDI (OFDI) by EMNEs grew

rapidly, from less than 5% (US$11.9 billion) in 1990 to 29% (US$328

billion) in 2010 (UNCTAD, 2011). In addition, the contribution of

EMNEs to global OFDI was estimated to be on the order of 36% (US

$486 billion) in 2014 (Thirlwell, 2015; UNCTAD, 2015).

With this strong influence on the global economy, EMNEs now

constitute an important global phenomenon, attracting the attention

of both academics and practitioners who seek to gain more under-

standing about the foreign-market investment behaviors of this cate-

gory of firms, especially with respect to how they expand operations

into, and compete in, foreign markets. Thus, the combined issues of

cross-border expansion and competition have been the subjects of

ongoing debate in the academic literature, as scholars employ a vari-

ety of theoretical perspectives to investigate the foreign market

investment and competitive behaviors of multinational enterprises

(MNEs), including those in both the manufacturing and service

sectors.

Still, our understanding to date has been based predominantly on

the experiences of MNEs from developed markets (Chittoor, 2009;

Guillén & Garcia-Canal, 2009; Madhok & Keyhani, 2012). Based on

the argument that the international trajectories of EMNEs may differ

from those of their developed-country counterparts (Aharoni, 2014;

Gaur & Kumar, 2010; Luo & Tung, 2007; Mathews, 2006; Narula,

2012; Ramamurti, 2012; Rugman, 2009), there have been calls for

EMNE-specific cross-border expansion studies.

Given the wide market and institutional discrepancies between

developed- and emerging-market regions (Ghemawat, 2007; Hoskis-

son, Eden, Lau, & Wright, 2000; Khanna & Palepu, 1997), findings

based on studies embedded in developed-market contexts are

expected to offer incomplete insights into the behaviors of firms in

DOI: 10.1002/tie.21971

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