The internationalization of Nigerian firms: Motivations and location patterns

• Author: Palitha Konara,John R. Anchor,Constance Omokaro‐Romanus
• DOI: http://doi.org/10.1002/tie.21962
• Date: 01 January 2019
• Published date: 01 January 2019

THE INTERNATIONALIZATION OF AFRICAN FIRMS

The internationalization of Nigerian firms: Motivations

and location patterns

Constance Omokaro-Romanus

1

| John R. Anchor

1

| Palitha Konara

2

1

Huddersfield Business School, University of

Huddersfield, Huddersfield, United Kingdom

2

Faculty of Business, Plymouth University,

Plymouth, Devon, United Kingdom

Correspondence

Professor John R. Anchor, Huddersfield

Business School, University of Huddersfield,

Queensgate, Huddersfield HD1 3DH, United

Kingdom

Email: j.r.anchor@hud.ac.uk

Despite the increased number of studies of the internationalization of emerging-market multi-

nationals (EMNCs), Latin American and Asian firms have dominated the focus of such studies,

while the study of the internationalization process of sub-Saharan African firms in the interna-

tional business literature is quite limited. Therefore, this article examines the motivations and

location patterns of the internationalization process of four Nigerian firms through a multiple

case study approach. The findings show that the internationalization of the Nigerian firms is a

recent phenomenon, but the foreign investment pattern reflects a pan-African investment

strategy. However, the findings also reveal that the firm-specific advantages that had been

accumulated in the domestic market, coupled with home-country factors and regional-/host-

market factors, were key determinants of the motivations and location patterns in the interna-

tionalization process of Nigerian firms.

KEYWORDS

emerging-market multinational firms, internationalization process, location patterns,

motivations, Nigerian firms, sub-Saharan African firms

1|INTRODUCTION

The study of the internationalization process of emerging-market

multinationals (EMNCs) has gained prominence in the past two

decades as a result of the economic growth and transformation wit-

nessed in emerging markets (EMs). The internationalization phenome-

non has attracted a great deal of interest from international business

(IB) scholars (Athreye & Kapur, 2009; Hoskisson, Eden, Lau, & Wright,

2000; Hoskisson, Wright, Filatotchev, & Peng, 2013; Jormanainen &

Koveshnikov, 2012). However, Asian and Latin American firms have

dominated the study of EMNCs' internationalization (Bianchi, 2014;

Child & Rodrigues, 2005; Cyrino, Barcellos, & Tanure, 2010; Eren-

Erdogmus, Cobanoglu, Yalcın, & Ghauri, 2010; Fortanier & Tulder,

2009; Olaya, Olaya, & Cuéter, 2012; Sim, 2005).

Sub-Saharan African (SSA) firms have emerged as high-profile

multinational corporations (MNCs) that are increasingly engaged in

foreign expansion through outward foreign direct investment (OFDI),

especially across the SSA region. Such firms include, for example,

MTN, the First Bank of Nigeria, Eco Bank of Senegal, Diamond Bank

of Nigeria, Continental Reinsurance, Dangote Industries, ShopRite,

Equity Group Holdings, GlobalCom, InterSwitch, and Computer

Warehouse Group. SSA MNCs have emerged from different sectors

of the economy, taking advantage of their home countries' favorable

economic policies to internationalize (Initiative for Global Develop-

ment and Dalberg Global Development, 2011; William, 2013). How-

ever, the study of SSA firms is still underexplored, and “silence”has

been used to describe the lack of such studies (Bolaji & Chris, 2014;

Boojihawon & Acholonu, 2013; Ibeh, Wilson, & Chizema, 2012; Mol,

Stadler, & Arino, 2017). The SSA economic environment is diverse in

terms of political systems, resources, economic structures, and cul-

ture (Ajen, 2016; IGD & Development, 2011). This diversity may have

implications for the internationalization process of SSA firms.

A study of the internationalization process of Nigerian firms is

important given the size of the Nigerian economy and its influential

position on the continent. Such a study can create a path to under-

standing the internationalization process of SSA firms generally. An

in-depth understanding of the motivations and location patterns of

Nigerian firms could also have both policy and social implications.

This article, therefore, examines the factors that have motivated

the internationalization and the location pattern of Nigerian firms via

OFDI. The article also examines whether SSA firms possess any

unique characteristics that can contribute to the ongoing discussions

DOI: 10.1002/tie.21962

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