Determinants of Foreign Direct Investment of South African Telecommunications Firms into Sub-Saharan Africa
AbstractThe study investigates the main factors considered by South African telecommunications firms when making a decision to undertake Foreign Direct Investment (FDI) into Sub-Saharan Africa (SSA). This encompasses the reasons for investing, the methods of entry into the identified market and the factors influencing their decision. The methodology employs a survey questionnaire which was sent to telecommunication firms representing more than 70% of the revenue generated by this sector in SSA. The research reveals that market size, regulatory environment and government policy are the three most important factors influencing the decision to undertake FDI. Furthermore, the main reasons for deciding to enter SSA are for market and profit growth due to saturation in their existing markets, as well as for diversification of risk. Telecommunications firms wishing to enter SSA must be prepared for an unstable and uncertain policy environment and understand that the cost of starting a new venture in SSA is high.
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Bibliographic InfoPaper provided by Economic Research Southern Africa in its series Working Papers with number 222.
Length: 25 pages
Date of creation: 2011
Date of revision:
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Telecommunications Africa FDI;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
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