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Foreign Market Selection of Emerging Multinational Corporations: Evidence from South African and Egyptian Corporations

Mustafa Sakr () and Andre Jordaan ()
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Mustafa Sakr: University of Pretoria, Department of Economics, Pretoria, South Africa
Andre Jordaan: University of Pretoria, Department of Economics, Pretoria, South Africa

No 201734, Working Papers from University of Pretoria, Department of Economics

Abstract: As literature remains sparse regarding emerging African multinational corporations (EAMNCs), this article focuses on examining the key pull factors (i.e. host country macroeconomic specifications) influencing the foreign market selection of South African and Egyptian multinational corporations as a case study of EAMNCs. Based on estimation of Random Effect and Negative Binomial models, it has been found that the market size, resources endowment and proximity between home and host country are significant pull drivers of both Egyptian and South African MNCs. While not affecting Egyptian MNCs, assets availability, trade openness, the service sector quality, export to host country and the official exchange rate of the receiving destination and quality of institutions have an influential impact on foreign market selection of the South African investors. Inflation neither affects the attention of Egyptian firms nor South Africans to choose a certain market to invest in.

Keywords: South African MNCs; Egyptian MNCs; emerging African MNCs; emerging MNCs; pull factor determinants of OFDI (search for similar items in EconPapers)
JEL-codes: P45 F21 F23 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2017-05
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