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Unearthing the Integral Determinants of Foreign Ownership Prevalence of Companies in Africa: Role of Country-level Governance

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  • Otuo Serebour Agyemang
  • Giulia Fantini
  • Abraham Ansong

Abstract

This study seeks to deepen our understanding on how country-level governance structures influence prevalence of foreign ownership of firms in Africa. This study reinforces the new institutional economics perspective by empirically highlighting that governance structures influence the prevalence of foreign ownership of companies in an economy. Using archival data from 39 African economies, we found that there is a significant positive association between regulatory quality and foreign ownership prevalence. Also, foreign ownership is prevalent in African countries that are politically stable and embrace rule of law. However, we found that countries with high voice and accountability structures are associated with low foreign ownership prevalence.

Suggested Citation

  • Otuo Serebour Agyemang & Giulia Fantini & Abraham Ansong, 2016. "Unearthing the Integral Determinants of Foreign Ownership Prevalence of Companies in Africa: Role of Country-level Governance," Journal of African Business, Taylor & Francis Journals, vol. 17(2), pages 225-253, May.
    • Handle: RePEc:taf:wjabxx:v:17:y:2016:i:2:p:225-253
    DOI: 10.1080/15228916.2016.1145179
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    References listed on IDEAS

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    1. Yuko Kinoshita & Nauro F. Campos, 2003. "Why Does Fdi Go Where it Goes? New Evidence From the Transition Economies," IMF Working Papers 2003/228, International Monetary Fund.
    2. Singh, Harinder & Kwang W. Jun, 1995. "Some new evidence on determinants of foreign direct investment in developing countries," Policy Research Working Paper Series 1531, The World Bank.
    3. International Monetary Fund, 2004. "Risk Instability and the Pattern of Foreign Direct Investment in the Middle East and North Africa Region," IMF Working Papers 2004/139, International Monetary Fund.
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    Cited by:

    1. Amankwah-Amoah, Joseph & Hinson, Robert E., 2019. "Contextual influences on new technology ventures: A study of domestic firms in Ghana," Technological Forecasting and Social Change, Elsevier, vol. 143(C), pages 289-296.
    2. Samuel Kwaku Agyei & Nathaniel Kwapong Obuobi & Mohammed Zangina Isshaq & Mac Junior Abeka & John Gartchie Gatsi & Ebenezer Boateng & Emmanuel Kwakye Amoah, 2022. "Country-Level corporate governance and Foreign Portfolio Investments in Sub-Saharan Africa: The moderating role of institutional quality," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2106636-210, December.
    3. Amankwah-Amoah, Joseph & Egbetokun, Abiodun & Osabutey, Ellis L.C., 2018. "Meeting the 21st century challenges of doing business in Africa," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 336-338.
    4. Schoentgen, Aude & Gille, Laurent, 2017. "Valuation of telecom investments in sub-Saharan Africa," Telecommunications Policy, Elsevier, vol. 41(7), pages 537-554.
    5. Seth Nana Kwame Appiah-Kubi & Karel Malec & Joseph Phiri & Mansoor Maitah & Zdeňka Gebeltová & Luboš Smutka & Vojtech Blazek & Kamil Maitah & Jitka Sirohi, 2021. "Impact of Tax Incentives on Foreign Direct Investment: Evidence from Africa," Sustainability, MDPI, vol. 13(15), pages 1-12, August.
    6. Seth Nana Kwame Appiah-Kubi & Karel Malec & Mansoor Maitah & Sandra Boatemaa Kutin & Ludmila Pánková & Joseph Phiri & Orhan Zaganjori, 2020. "The Impact of Corporate Governance Structures on Foreign Direct Investment: A Case Study of West African Countries," Sustainability, MDPI, vol. 12(9), pages 1-15, May.
    7. Ebenezer Boateng & Peterson Owusu Junior & John G. Gatsi & Adam M. Anokye & Mac Junior Abeka & Emmanuel Asafo‐Adjei, 2024. "Institutions and venture capital market development in sub‐Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 1381-1406, March.
    8. Seth Nana Kwame Appiah-Kubi & Karel Malec & Sandra Boatemaa Kutin & Mansoor Maitah & Michael Chanda Chiseni & Joseph Phiri & Zdeňka Gebeltová & Sylvie Kobzev Kotásková & Kamil Maitah, 2020. "Foreign Ownership in Sub-Saharan Africa: Do Governance Structures Matter?," Sustainability, MDPI, vol. 12(18), pages 1-15, September.

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