Foreign Direct Investment and the Internationalisation of South African Mining Companies into Africa
AbstractThe paper investigates the factors influencing the internationalisation of mining firms into Africa and the strategies employed. We focus on the FDI of South African mining firms because of the dominance of this country in the extractive resources industry for over a century. A semi-structured interview survey process consisting of written questionnaires and one-on-one interviews that incorporated both structured as well as open-ended questions was used. The structured questionnaire attempted to identify the entry-mode characteristics of the mining firms as well as the importance of the factors influencing the internationalisation of mining firms. The open-ended questionnaire was designed to be probing in nature, in order to identify how mining companies manage the factors deemed present in an operational context. More than 80% of South African mining firms by market capitalisation provided responses to the survey. The research revealed that security of tenure, political stability and the availability of infrastructure were the three most important factors influencing the internationalisation of South African mining firms out of the nine factors tested in the survey. The most widespread strategies used to manage these factors were political lobbying, bargaining and negotiation.
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Bibliographic InfoPaper provided by Economic Research Southern Africa in its series Working Papers with number 194.
Length: 24 pages
Date of creation: 2010
Date of revision:
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Theory of FDI and the MNE (Ownership-Location-Internalization); Mining; Africa; Factor Analysis; Incorporating Country Variables;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
This paper has been announced in the following NEP Reports:
- NEP-AFR-2010-11-20 (Africa)
- NEP-ALL-2010-11-20 (All new papers)
- NEP-IFN-2010-11-20 (International Finance)
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