IDEAS home Printed from https://ideas.repec.org/a/eee/intman/v30y2024i1s1075425323001059.html
   My bibliography  Save this article

Charity can still begin at home: Examining the drivers and boundary conditions of Africa-to-Africa outward foreign direct investment (OFDI)

Author

Listed:
  • Owusu-Yirenkyi, Diana
  • Akolgo, Portia M.
  • Naab, Gilbert Zana
  • Donbesuur, Francis
  • Danso, Albert

Abstract

Recent studies on ‘Africa Rising’ and ‘Africa-to-Africa Internationalization’ have propelled conversations on how African Small and Medium-Sized Enterprises (SMEs) can continue to internationalize within African countries. From the tenets of the institutional theory and the dynamic capabilities perspectives, this study proposes and tests a framework of how and when dysfunctional competition drives SMEs' outward foreign direct investments within African countries. Analysis of a survey data from 196 Ghanaian SMEs operating across the African continent indicates that cross-border open innovation mediates the relationship between dysfunctional competition and SMEs' intra- Africa OFDI activities. Further analysis revealed that SMEs' strategic agility plays a double-edged sword moderating role in enhancing the effects of dysfunctional competitions and cross-border open innovation on intra-Africa OFDI. These findings have significant implications for the international business and finance literature as well as the management and growth of African SMEs.

Suggested Citation

  • Owusu-Yirenkyi, Diana & Akolgo, Portia M. & Naab, Gilbert Zana & Donbesuur, Francis & Danso, Albert, 2024. "Charity can still begin at home: Examining the drivers and boundary conditions of Africa-to-Africa outward foreign direct investment (OFDI)," Journal of International Management, Elsevier, vol. 30(1).
    • Handle: RePEc:eee:intman:v:30:y:2024:i:1:s1075425323001059
    DOI: 10.1016/j.intman.2023.101108
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1075425323001059
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intman.2023.101108?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nathaniel Boso & Pejvak Oghazi & Magnus Hultman, 2017. "International entrepreneurial orientation and regional expansion," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 29(1-2), pages 4-26, January.
    2. Christofi, Michael & Pereira, Vijay & Vrontis, Demetris & Tarba, Shlomo & Thrassou, Alkis, 2021. "Agility and flexibility in international business research: A comprehensive review and future research directions," Journal of World Business, Elsevier, vol. 56(3).
    3. Haiyang Li & Yan Zhang, 2007. "The role of managers' political networking and functional experience in new venture performance: Evidence from China's transition economy," Strategic Management Journal, Wiley Blackwell, vol. 28(8), pages 791-804, August.
    4. Michael A Sartor & Paul W Beamish, 2018. "Host market government corruption and the equity-based foreign entry strategies of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(3), pages 346-370, April.
    5. Michael A Witt & Arie Y Lewin, 2007. "Outward foreign direct investment as escape response to home country institutional constraints," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 579-594, July.
    6. Penghua Qiao & Mengli Lv & Yuping Zeng, 2020. "R&D Intensity, Domestic Institutional Environment, and SMEs’ OFDI in Emerging Markets," Management International Review, Springer, vol. 60(6), pages 939-973, December.
    7. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    8. Adomako, Samuel & Amankwah-Amoah, Joseph & Dankwah, George Obeng & Danso, Albert & Donbesuur, Francis, 2019. "Institutional voids, international learning effort and internationalization of emerging market new ventures," Journal of International Management, Elsevier, vol. 25(4).
    9. William P. Wan, 2005. "Country Resource Environments, Firm Capabilities, and Corporate Diversification Strategies," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 161-182, January.
    10. Klaus Uhlenbruck & Peter Rodriguez & Jonathan Doh & Lorraine Eden, 2006. "The Impact of Corruption on Entry Strategy: Evidence from Telecommunication Projects in Emerging Economies," Organization Science, INFORMS, vol. 17(3), pages 402-414, June.
    11. Sea-Jin Chang & Arjen van Witteloostuijn & Lorraine Eden, 2010. "From the Editors: Common method variance in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(2), pages 178-184, February.
    12. Rabbiosi, Larissa & Santangelo, Grazia D., 2013. "Parent company benefits from reverse knowledge transfer: The role of the liability of newness in MNEs," Journal of World Business, Elsevier, vol. 48(1), pages 160-170.
    13. Wu, Jie & Wang, Chengqi & Hong, Junjie & Piperopoulos, Panagiotis & Zhuo, Shuaihe, 2016. "Internationalization and innovation performance of emerging market enterprises: The role of host-country institutional development," Journal of World Business, Elsevier, vol. 51(2), pages 251-263.
    14. Brian C Pinkham & Mike W Peng, 2017. "Overcoming institutional voids via arbitration," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 344-359, April.
    15. Liu, Xiaohui & Gao, Lan & Lu, Jiangyong & Lioliou, Eleni, 2016. "Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy," Journal of World Business, Elsevier, vol. 51(3), pages 356-368.
    16. Li, Linjie & Liu, Xiaming & Yuan, Dong & Yu, Miaojie, 2017. "Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms," International Business Review, Elsevier, vol. 26(5), pages 839-854.
    17. Deng, Ping & Zhang, Shuo, 2018. "Institutional quality and internationalization of emerging market firms: Focusing on Chinese SMEs," Journal of Business Research, Elsevier, vol. 92(C), pages 279-289.
    18. Nathaniel Boso & Joseph Amankwah-Amoah & Dominic Essuman & Oluwaseun E. Olabode & Patience Bruce & Magnus Hultman & James Kofi Kutsoati & Ogechi Adeola, 2023. "Configuring political relationships to navigate host-country institutional complexity: Insights from Anglophone sub-Saharan Africa," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(6), pages 1055-1089, August.
    19. Buccieri, Dominic & Javalgi, Raj G. & Cavusgil, Erin, 2020. "International new venture performance: Role of international entrepreneurial culture, ambidextrous innovation, and dynamic marketing capabilities," International Business Review, Elsevier, vol. 29(2).
    20. Jun Xia & Xufei Ma & Jane W. Lu & Daphne W. Yiu, 2014. "Outward foreign direct investment by emerging market firms: A resource dependence logic," Strategic Management Journal, Wiley Blackwell, vol. 35(9), pages 1343-1363, September.
    21. Fan, Di & Zhang, Ya’nan & Huang, Xinli & Su, Yiyi, 2023. "Varieties of institutional systems, the belt-road initiative, and the patterned investment flows," International Business Review, Elsevier, vol. 32(4).
    22. Le, Quan Vu & Zak, Paul J., 2006. "Political risk and capital flight," Journal of International Money and Finance, Elsevier, vol. 25(2), pages 308-329, March.
    23. Yang Yang & Jia Xu & Jonathan P. Allen & Xiaohua Yang, 2022. "Strategic asset-seeking foreign direct investments by emerging market firms: the role of institutional distance," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 18(12), pages 6081-6101, May.
    24. Dai, Li & Maksimov, Vladislav & Gilbert, Brett Anitra & Fernhaber, Stephanie A., 2014. "Entrepreneurial orientation and international scope: The differential roles of innovativeness, proactiveness, and risk-taking," Journal of Business Venturing, Elsevier, vol. 29(4), pages 511-524.
    25. Aya S Chacar & William Newburry & Balagopal Vissa, 2010. "Bringing institutions into performance persistence research: Exploring the impact of product, financial, and labor market institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(7), pages 1119-1140, September.
    26. Christensen, Jens Froslev & Olesen, Michael Holm & Kjaer, Jonas Sorth, 2005. "The industrial dynamics of Open Innovation--Evidence from the transformation of consumer electronics," Research Policy, Elsevier, vol. 34(10), pages 1533-1549, December.
    27. Nyamrunda, Frank Charles & Freeman, Susan, 2021. "Strategic agility, dynamic relational capability and trust among SMEs in transitional economies," Journal of World Business, Elsevier, vol. 56(3).
    28. Qing Xie & Hua Yin, 2023. "Institutional Differences and the Choice of Outward Foreign Direct Investment Mode under the “Belt and Road” Initiative: Experience Analysis Based on China’s Manufacturing Enterprises," Sustainability, MDPI, vol. 15(9), pages 1-26, April.
    29. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    30. Singh, Sanjay Kumar & Gupta, Shivam & Busso, Donatella & Kamboj, Shampy, 2021. "Top management knowledge value, knowledge sharing practices, open innovation and organizational performance," Journal of Business Research, Elsevier, vol. 128(C), pages 788-798.
    31. Johan Wiklund & DEAN Shepherd, 2003. "Knowledge‐based resources, entrepreneurial orientation, and the performance of small and medium‐sized businesses," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1307-1314, December.
    32. Zahoor, Nadia & Khan, Zaheer & Meyer, Martin & Laker, Benjamin, 2023. "International entrepreneurial behavior of internationalizing African SMEs – Towards a new research agenda," Journal of Business Research, Elsevier, vol. 154(C).
    33. Du, Yunzhou & Kim, Phillip H. & Aldrich, Howard E., 2016. "Hybrid Strategies, Dysfunctional Competition, and New Venture Performance in Transition Economies," Management and Organization Review, Cambridge University Press, vol. 12(3), pages 469-501, September.
    34. Donbesuur, Francis & Ampong, George Oppong Appiagyei & Owusu-Yirenkyi, Diana & Chu, Irene, 2020. "Technological innovation, organizational innovation and international performance of SMEs: The moderating role of domestic institutional environment," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    35. Cui, Lin & Gao, Qiuling & Guo, Jinyu & Ma, Pengcheng, 2022. "OFDI performance of EMNEs: A review and recommendations for future research," Journal of International Management, Elsevier, vol. 28(3).
    36. Adomako, Samuel & Amankwah-Amoah, Joseph & Donbesuur, Francis & Ahsan, Mujtaba & Danso, Albert & Uddin, Moshfique, 2022. "Strategic agility of SMEs in emerging economies: Antecedents, consequences and boundary conditions," International Business Review, Elsevier, vol. 31(6).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nadia Zahoor & Francis Donbesuur & Arinze Christian Nwoba & Huda Khan, 2023. "Regional expansion of emerging market SMEs: the roles of domestic market environmental uncertainty and international alliance partner diversity," Asia Pacific Journal of Management, Springer, vol. 40(2), pages 613-643, June.
    2. Buitrago R., Ricardo E. & Barbosa Camargo, María Inés, 2021. "Institutions, institutional quality, and international competitiveness: Review and examination of future research directions," Journal of Business Research, Elsevier, vol. 128(C), pages 423-435.
    3. Gokalp, Omer N. & Lee, Seung-Hyun & Peng, Mike W., 2017. "Competition and corporate tax evasion: An institution-based view," Journal of World Business, Elsevier, vol. 52(2), pages 258-269.
    4. Mike W. Peng & Sergey Lebedev & Cristina O. Vlas & Joyce C. Wang & Jason S. Shay, 2018. "The growth of the firm in (and out of) emerging economies," Asia Pacific Journal of Management, Springer, vol. 35(4), pages 829-857, December.
    5. Ziyi Wei & Quyen T. K. Nguyen, 2020. "Local responsiveness strategy of foreign subsidiaries of Chinese multinationals: The impacts of relational-assets, market-seeking FDI, and host country institutional environments," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 661-692, September.
    6. Jones, Chris & Temouri, Yama & Kirollos, Karim & Du, Jun, 2023. "Tax havens and emerging market multinationals: The role of property rights protection and economic freedom," Journal of Business Research, Elsevier, vol. 155(PB).
    7. Donbesuur, Francis & Zahoor, Nadia & Al-Tabbaa, Omar & Adomako, Samuel & Tarba, Shlomo Y., 2023. "On the performance of platform-based international new ventures: The roles of non-market strategies and managerial competencies," Journal of International Management, Elsevier, vol. 29(2).
    8. Weng, David H. & Peng, Mike W., 2018. "Home bitter home: How labor protection influences firm offshoring," Journal of World Business, Elsevier, vol. 53(5), pages 632-640.
    9. Liu, Yulong & Yu, Yang, 2018. "Institutions, firm resources and the foreign establishment mode choices of Chinese firms: The moderating role of home regional institutional development," Journal of Business Research, Elsevier, vol. 93(C), pages 111-121.
    10. Purkayastha, Anish & Kumar, Vikas & Gupta, Vishal K., 2021. "Emerging market internationalizing firms: Learning through internationalization to achieve entrepreneurial orientation," Journal of World Business, Elsevier, vol. 56(5).
    11. Qi, Guoyou & Zou, Hailiang & Xie, Xuemei & Meng, Xiaohua & Fan, Tijun & Cao, Yuanhe, 2020. "Obedience or escape: Examining the contingency influences of corruption on firm exports," Journal of Business Research, Elsevier, vol. 106(C), pages 261-272.
    12. Mingo, Santiago & Junkunc, Marc & Morales, Francisco, 2018. "The interplay between home and host country institutions in an emerging market context: Private equity in Latin America," Journal of World Business, Elsevier, vol. 53(5), pages 653-667.
    13. Jafari-Sadeghi, Vahid & Amoozad Mahdiraji, Hannan & Busso, Donatella & Yahiaoui, Dorra, 2022. "Towards agility in international high-tech SMEs: Exploring key drivers and main outcomes of dynamic capabilities," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    14. White, George O. & Boddewyn, Jean J. & Galang, Roberto Martin N., 2015. "Legal system contingencies as determinants of political tie intensity by wholly owned foreign subsidiaries: Insights from the Philippines," Journal of World Business, Elsevier, vol. 50(2), pages 342-356.
    15. Donbesuur, Francis & Ampong, George Oppong Appiagyei & Owusu-Yirenkyi, Diana & Chu, Irene, 2020. "Technological innovation, organizational innovation and international performance of SMEs: The moderating role of domestic institutional environment," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    16. Shi, Xing & Zeng, Yujie & Wu, Yanrui & Wang, Shuai, 2023. "Outward foreign direct investment and green innovation in Chinese multinational companies," International Business Review, Elsevier, vol. 32(5).
    17. Ferraris, Alberto & Degbey, William Y. & Singh, Sanjay Kumar & Bresciani, Stefano & Castellano, Sylvaine & Fiano, Fabio & Couturier, Jerome, 2022. "Microfoundations of Strategic Agility in Emerging Markets: Empirical Evidence of Italian MNEs in India," Journal of World Business, Elsevier, vol. 57(2).
    18. Ping Deng & Andrew Delios & Mike W. Peng, 2020. "A geographic relational perspective on the internationalization of emerging market firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(1), pages 50-71, February.
    19. Su, Cong & Kong, Lingshuang & Ciabuschi, Francesco, 2022. "Innovativeness and the relevance of political ties in Chinese MNEs," Journal of Business Research, Elsevier, vol. 153(C), pages 494-508.
    20. Zhang, Chenyan & Zheng, Wei & Hong, Junjie & Kafouros, Mario, 2022. "The role of government policies in explaining the internationalization of Chinese firms," Journal of Business Research, Elsevier, vol. 141(C), pages 552-563.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:30:y:2024:i:1:s1075425323001059. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.