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Multinational Enterprises and the Provision of Collective Goods in Developing Countries under Formal and Informal Institutional Voids. The Case of Electricity in Sub-Saharan Africa

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  • Garrone, Paola
  • Piscitello, Lucia
  • D'Amelio, Matilde

Abstract

Despite their unprecedented growth, developing countries still face severe problems in the provision of collective goods. Electricity, whose provision is scarce or unreliable in most developing regions, especially in Sub-Saharan Africa, is an emblematic case. The reason for this shortage is not only imputable to the lack of effective formal institutions, but also to the inefficacy of informal institutions in enabling alternative solutions for the production, transmission and distribution of electricity. We claim that in this context of “double institutional void”, foreign direct investment (FDI) and multinational enterprises (MNEs) can play a decisive role. However, their effectiveness depends on both the formal and informal institutional proximity between the home and the host countries. Our empirical analysis relies on panel data models run on a sample of pairs of home-host countries, the latter of which are all from Sub-Saharan Africa (SSA), observed from 2005 to 2011.

Suggested Citation

  • Garrone, Paola & Piscitello, Lucia & D'Amelio, Matilde, 2019. "Multinational Enterprises and the Provision of Collective Goods in Developing Countries under Formal and Informal Institutional Voids. The Case of Electricity in Sub-Saharan Africa," Journal of International Management, Elsevier, vol. 25(2), pages 1-1.
    • Handle: RePEc:eee:intman:v:25:y:2019:i:2:4
    DOI: 10.1016/j.intman.2018.09.002
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    Cited by:

    1. Luis Alfonso Dau & Aya S. Chacar & Marjorie A. Lyles & Jiatao Li, 2022. "Informal institutions and international business: Toward an integrative research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 985-1010, August.
    2. Tina C Ambos & Sebastian H Fuchs & Alexander Zimmermann, 2020. "Managing interrelated tensions in headquarters–subsidiary relationships: The case of a multinational hybrid organization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(6), pages 906-932, August.
    3. Fotio, Hervé Kaffo & Adams, Samuel & Nkengfack, Hilaire & Poumie, Boker, 2023. "Achieving sustainable development goal 7 in Africa: Does globalization matter for electricity access, renewable energy consumption, and energy efficiency?," Utilities Policy, Elsevier, vol. 82(C).
    4. Opoku, Eric Evans Osei & Kufuor, Nana Kwabena & Manu, Sylvester Adasi, 2021. "Gender, electricity access, renewable energy consumption and energy efficiency," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    5. Bernard Meka'a, Cosmas & Landry Djamen, Boris & Noufelie, Romus, 2024. "Foreign direct investment, Green Technological Innovation and Energy Poverty: Empirical evidences from Sub-Saharan African countries," Renewable Energy, Elsevier, vol. 231(C).
    6. Suzana B. Rodrigues & John Child, 2023. "The role of corporations in addressing non-market institutional voids during the COVID-19 pandemic: The case of an emerging economy," Journal of International Business Policy, Palgrave Macmillan, vol. 6(1), pages 115-132, March.
    7. Williams S. Ebhota, 2021. "Leveraging on Sustainable Energy Transition to Change the Energy Narrative of the Dark Continent," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 409-416.
    8. John M. Luiz & Takudzwa Magada & Regis Mukumbuzi, 2021. "Strategic Responses to Institutional Voids (Rationalization, Aggression, and Defensiveness): Institutional Complementarity and Why the Home Country Matters," Management International Review, Springer, vol. 61(5), pages 681-711, October.
    9. Aluko, Olufemi Adewale & Opoku, Eric Evans Osei & Ibrahim, Muazu & Kufuor, Nana Kwabena, 2023. "Put on the light! Foreign direct investment, governance and access to electricity," Energy Economics, Elsevier, vol. 119(C).
    10. Osabutey, Ellis L.C. & Papanastassiou, Marina & Jin, Zhongqi & Navare, Jyoti & Agyapong, Ahmed, 2023. "Revisiting FSAs and CSAs in Sub-Saharan Africa: Evidence from Ghanaian Firms," International Business Review, Elsevier, vol. 32(4).
    11. Earl, Anna & Michailova, Snejina, 2021. "Home governments and MNEs in Russia: Relationships and MNE external legitimacy," Journal of International Management, Elsevier, vol. 27(2).
    12. An, Young Hoon & Lew, Yong Kyu & Khan, Zaheer, 2024. "Non-market strategies in weak institutional environments: The case of MNE subsidiaries in Cameroon," Journal of International Management, Elsevier, vol. 30(3).
    13. Brieger, Steven A. & Chowdhury, Farzana & Hechavarría, Diana M. & Muralidharan, Etayankara & Pathak, Saurav & Lam, Yan Tong, 2022. "Digitalization, institutions and new venture internationalization," Journal of International Management, Elsevier, vol. 28(4).
    14. Lilac Nachum & Charles E. Stevens & Aloysius Newenham-Kahindi & Sarianna Lundan & Elizabeth L. Rose & Leonard Wantchekon, 2023. "Africa rising: Opportunities for advancing theory on people, institutions, and the nation state in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(5), pages 938-955, July.
    15. Debmalya Mukherjee & Saumyaranjan Sahoo & Satish Kumar, 2023. "Two Decades of International Business and International Management Scholarship on Africa: A Review and Future Directions," Management International Review, Springer, vol. 63(6), pages 863-909, December.
    16. Opoku, Eric Evans Osei & Acheampong, Alex O. & Aluko, Olufemi Adewale, 2024. "Impact of rural-urban energy equality on environmental sustainability and the role of governance," Journal of Policy Modeling, Elsevier, vol. 46(2), pages 304-335.
    17. Andrews, Luke R.J. & Luiz, John M., 2024. "Conceptualizing institutional voids in terms of severity and how the home country affects this understanding," Journal of Business Research, Elsevier, vol. 176(C).
    18. Kafouros, Mario & Chandrashekar, Subramanya Prasad & Aliyev, Murod & Au, Alan Kai Ming, 2022. "How do formal and informal institutions influence firm profitability in emerging countries?," Journal of International Management, Elsevier, vol. 28(1).
    19. Choi, Gunae, 2022. "Determinants of target location selection for acquirers in the manufacturing sector: Pollution intensity, policy enforcement, and civic environmentalism," Journal of Business Research, Elsevier, vol. 146(C), pages 308-324.
    20. Ray, Sangeeta & Ray, Pradeep Kanta, 2021. "Innovation strategy of latecomer firms under tight appropriability regimes: The Indian pharmaceuticals industry," Journal of International Management, Elsevier, vol. 27(1).

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