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Local content requirements – i.e. government backed requirements that extractive MNCs must procure inputs locally – are fast becoming a major issue in MNC-host country bargaining in Africa. As a result of increasingly stringent local content requirements, extractive MNCs operating in Africa are facing a rapidly evolving strategic field, the management of which may have huge implications for their profitability and efficiency. While a vibrant and dynamic literature on local content in Africa is emerging, this literature is predominantly informed by economic and political perspectives, and strategic management perspectives are virtually absent. Hence, the aim of the paper is to characterize and develop the strategic management perspective on local content. Based on the classical local responsiveness-global integration grid, a framework is developed for, how MNCs may strategize on local content. The paper contributes to research by providing a conceptual framework that can inspire future strategic management research on MNC local content practices in Africa. Moreover, by providing a theory-based understanding of the strategic opportunities and challenges that face MNCs in relation to local content requirements, the paper may inform policymakers on how to better align local content interventions with MNC strategies and interests thus rendering them more effective.

It is a common view that states in the developing world with substantial extractive natural resource discoveries may not have the capacity to tax and regulate multinational companies in the sector. In this article, we show that ruling elites in recently resource-rich Tanzania, and in Uganda – expected to become resource-rich in the foreseeable future - have learned from the resource curse: they seek to construct ‘pockets of effectiveness’ (POEs) to regulate and tax natural resources. We explain the political incentives to create such pockets by combining insights from the POE and the Political Settlement literatures. We argue that POEs are likely to be established in emerging resource-rich countries with three characteristics: some degree of competitive elections; widespread voter expectations of future natural resource prosperity; and absence of powerful domestic firms in the sector who can resist taxation. The political benefits of such POEs are higher revenues that can boost government spending power and, hence, political legitimacy. These outweigh the political costs of establishing POEs, namely rents and patronage foregone. This insight is missed in much of the writings on the impact of natural resource wealth in African countries.

Purpose: To understand African small and medium-sized enterprise (SME) performance and its antecedents is essential, both from a strategic management and an industrial development perspective. While a substantial literature on African SMEs has emerged in recent years, studies of their performance specifically are few and inconclusive. The purpose of this paper is to address this lacuna in the literature by examining variations in performance of 210 East African SMEs.Design/methodology/approach: The paper employs OLS and logistic regression and Classify k-means test to analyze performance variations in a unique data set of 210 food processing enterprises in Tanzania, Kenya and Zambia.Findings: Three generic types of African SMEs are identified based on performance: laggards, followers and gazelles. The gazelles are typically medium-sized, skill-intensive companies selling relatively differentiated products in niche markets. The laggards are typically small, capital-intensive companies involved in grain milling that adopt a cost differentiation strategy. A key driver of variation in performance is found to be the quality of the external business environment (in particular the quality of intermediary markets), and also capability factors such as the strength of management. Strategy factors such as differentiation and political strategies explain performance variations.Practical implications: Among the policy implications are that African industrial policy should focus on improving the functioning of intermediary markets, e.g. by reducing the transaction costs of inter-firm collaboration. Moreover, rather than focusing industrial policy on SMEs per se, policymakers should focus on those types of enterprises that are capable of generating high performance, e.g. skill-intensive enterprises with strong managerial capabilities, engaged in differentiation strategies.Originality/value: The paper integrates the extant literature on African SME performance, develops an analytical framework for studying it and presents novel empirical insights based on one of the most detailed surveys of SME performance in the continent to date. The findings have important and tangible implications for literature, as well as for industrial policy., Purpose: To understand African small and medium-sized enterprise (SME) performance and its antecedents is essential, both from a strategic management and an industrial development perspective. While a substantial literature on African SMEs has emerged in recent years, studies of their performance specifically are few and inconclusive. The purpose of this paper is to address this lacuna in the literature by examining variations in performance of 210 East African SMEs.Design/methodology/approach: The paper employs OLS and logistic regression and Classify k-means test to analyze performance variations in a unique data set of 210 food processing enterprises in Tanzania, Kenya and Zambia.Findings: Three generic types of African SMEs are identified based on performance: laggards, followers and gazelles. The gazelles are typically medium-sized, skill-intensive companies selling relatively differentiated products in niche markets. The laggards are typically small, capital-intensive companies involved in grain milling that adopt a cost differentiation strategy. A key driver of variation in performance is found to be the quality of the external business environment (in particular the quality of intermediary markets), and also capability factors such as the strength of management. Strategy factors such as differentiation and political strategies explain performance variations.Practical implications: Among the policy implications are that African industrial policy should focus on improving the functioning of intermediary markets, e.g. by reducing the transaction costs of inter-firm collaboration. Moreover, rather than focusing industrial policy on SMEs per se, policymakers should focus on those types of enterprises that are capable of generating high performance, e.g. skill-intensive enterprises with strong managerial capabilities, engaged in differentiation strategies.Originality/value: The paper integrates the extant literature on African SME performance, develops an analytical framework for studying it and presents novel empirical insights based on one of the most detailed surveys of SME performance in the continent to date. The findings have important and tangible implications for literature, as well as for industria

Purpose: The purpose of this paper is to examine how female entrepreneurs navigate complex and challenging institutional environments. It draws on institutional theory and the concept of response strategies to institutional pressures to explore the institutional barriers that female entrepreneurs encounter and highlights the strategies women employ to overcome them.Design/methodology/approach: This paper builds on a case study of female entrepreneurs engaged in food processing in Tanzania. It draws on semi-structured interviews with nine female entrepreneurs, one focus group discussion with six female entrepreneurs and two semi-structured interviews with representatives from women’s business associations (WBAs).Findings: This paper reveals a repertoire of active strategies enacted by women entrepreneurs, including advocacy through WBAs, bootstrapping, semi-informal operations, co-location of home and business, spouse involvement in the business, downplay of gender identity, reliance on persistence and passion and networking through WBAs. While these strategies involve various degrees of agency, the findings indicate that collective efforts through WBAs offer women the most promise in terms of influencing institutional structures.Originality/value: While there is a growing body of literature examining how institutions influence female entrepreneurs, there is a dearth of knowledge on how women experience institutional complexities and actively react to institutional barriers, complexities and contradictions. This paper shows the value of analytical attention to female entrepreneurs’ agency by highlighting women’s active responses and documenting a repertoire of strategies.

PurposeBased on six case studies of self-proclaimed social enterprises (SEs) in Kenya, this paper aims to critically assess the “SE” concept in a base of the pyramid (BoP) context.Design/methodology/approachThe paper draws on multiple case studies to challenge traditional notions of SE. Six SEs operating at the BoP in Kenya are analysed. Interviews are conducted with entrepreneurs from each enterprise, during which the enterprises’ business models are mapped and scrutinised.FindingsBased on the six case studies, the paper argues that the SE concept is challenged in a BoP context: the six Kenyan SEs viewed social and commercial orientation as equally important and mutually supportive; viewed social orientation as a competitive advantage; and did not consider social objectives as harmonious. These findings corroborate key claims of the BoP literature, e.g. that it is not possible meaningfully to distinguish social and commercial missions at the BoP as they are intertwined; that any company succeeding at the BoP will have a social impact; and that the pursuit of some social objectives may undermine the achievement of other social objectives. The overall conclusion of the paper is that in BoP environments, the concept of SE becomes illusive.Originality/valueThis paper adds perspective to existing literature on SE at the BoP and provides empirical evidence that can help shape the understanding of social business activities in East Africa. The paper demonstrates that in BoP environments, the boundaries between social and commercial enterprise become illusive.

Weak institutions, endemic market failures and low trust permeate the Tanzanian business environment. Nevertheless, some local enterprises overcome these challenges. Based on case studies of Tanzanian food processing enterprises, this paper identifies a number of coping strategies that contrasts markedly with the strategies traditionally emphasized by the strategic management literature: Instead of focus strategies, Tanzanian enterprises diversify; Instead of competitive strategies, Tanzanian enterprises adopt network strategies; And instead of internationalizing based on strengths, Tanzanian enterprises internationalize to overcome weaknesses. The paper traces these strategies back to specificities of the Tanzanian institutional environment and discusses implications for the strategic management literature.

Multinational corporations (MNCs) play key roles in development processes. Yet the developmental role of MNCs plays a negligent role in the current international business (IB) literature, the literature that deals with MNCs. It was not always like this: the IB literature was born out of an engagement in societal and developmental agendas and was fueled by the pursuit of grand questions, such as why MNCs exist, how and why international activities of MNCs are expanding to more and more regions and sectors, and how MNC activity affects the welfare and development of societies. Since the early 2000s, however, it seems that IB has lost sight of the grand questions, instead immersing itself in increasingly specific, theoretically inspired enquiries. As a consequence, IB has lost relevance for practical development policy. This chapter documents this development in the IB literature based on an extensive survey of development-related work in three leading IB journals. The chapter calls for IB to rediscover its roots and relate to some of the grand questions of current development discourse. The chapter ends by outlining research agendas for future IB research on the development role of MNCs that take their point of departure from the comparative advantage of IB: its ability to understand MNCs qua being MNCs.

Purpose The purpose of this paper is to re-visit and re-invigorate the oligopolistic industry perspective on multinational corporations (MNC) strategy. Design/methodology/approach Based on insights from the industrial organization tradition and strategic management, the paper brings the original insights of the oligopolistic industry perspective into a modern context by outlining a conceptual framework that may guide future international business (IB) research on MNC strategy in oligopolistic industries. Findings This paper demonstrates how contemporary IB literature pays little attention to a key insight of the early IB literature, namely, that foreign direct investment (FDI) often is driven by strategic interaction among MNCs in oligopolistic industries. Instead, the contemporary IB literature focuses on the FDI as a way to reduce transaction costs and/or as a way to leverage and build capabilities across borders. The paper argues that progressing global concentration in many industries warrants a rediscovery of the oligopolistic perspective on FDI. Originality/value The paper provides a comprehensive and unique literature review of the literature on MNC strategy in oligopolistic industries. Based on this review, the paper develops a novel conceptual framework that may inspire future IB research on MNC strategy in oligopolistic industries.

Extractive foreign direct investment (FDI) is heralded as the new development opportunity in Africa. A key precondition for FDI's contribution, however, is that foreign investors create ‘local content’ by linking up to the local economy. Consequently, African host governments are contemplating ways in which they can promote local content. This paper examines local content policies and practices in three African countries – Tanzania, Uganda and Mozambique – all countries with huge expectations for extractive based economic development. It is found that in spite of high ambitions and strong expectations, local content is limited, shallow and inefficient. The paper explores why local content apparently is so difficult to achieve in these African countries. It is argued that conventional economic explanations, focusing on market failures and weak institutions, are partial at best and therefore must be complemented with political explanations. Hence, it is proposed that local content practices in the three countries can be understood partly as the results of ruling elites’ efforts to build and maintain stable political coalitions.

This article studies the entry modes adopted by medium-sized enterprises (MEs) seeking market access to challenging business environments in Africa. Based on a review of the extant literature on entry mode choice and organisational learning in internationalisation, we develop a dynamic model for analysing entry mode choice of exporting MEs. Via a longitudinal study of 14 Danish MEs' attempted entry into the Kenyan market, we found that gaining better knowledge of own resources in relation to the Kenyan business environment did not make the MEs adjust their entry mode. The only behavioural adjustments in lieu of better knowledge were that several MEs, rather than changing their preferred entry mode, decided to abandon entry altogether. We ascribe this lack of adaptation of entry mode strategy to organisational inertia. In conclusion, we argue that our findings have important implications for the theory of organisational learning in internationalisation.

Purpose– In light of recent enthusiasm over African private sector development, the purpose of this paper is to review the business literature on African enterprise development with a view of identifying lacunas in the literature and of developing an analytical framework that may guide future research on this issue.Design/methodology/approach– The paper provides a review of the extant literature on African enterprise development by juxtaposing the traditional pessimistic view of African business performance with more recent, optimistic accounts. Based on the literature review, lacunas in the literature are identified and an integrative framework for analysing African enterprise development is developed. The framework is used to provide an overview of the received literature on African enterprise development, to identify voids and lacunas and to identify new research agendas.Findings– While a growing number of studies suggest profound improvements in the performance of African enterprises, data limitations, conceptual ambiguities and absence of comprehensive studies still cautions against sweeping generalizations. The paper reviews the literature on factors shaping the performance of African enterprises, observing that while much research is focusing on the role of the African business environments for enterprise development, much less attention has been devoted to the role of firm-specific capabilities, strategies and management. The paper concludes by advocating a contingency approach to research on African enterprise development that emphasizes the interplay between firm-specific factors and the specificities of the African business environment.Originality/value– The paper provides a comprehensive literature review on African enterprise development and presents a novel framework for understanding African enterprise development from a business perspective.

Business studies and development studies have evolved relatively independent of each other – business studies occupied with profit maximizing strategies of entrepreneurs and firms, and development studies with economic, social and political development strategies of countries and regions. In recent years, the interest of both fields of academic enquiry has increasingly been directed toward issues related to firms and entrepreneurship in developing countries. However, in dealing with these issues, the two fields have, only to a limited degree, drawn on each other's insights. The article argues that without an enhanced conversation between the two fields in the era of globalization, the analytical and predictive power of both may be seriously impaired. The article moves on to identify areas, where there is substantial potential for cross-fertilization between the two fields. Les recherches dans le domaine du management et des etudes du developpement ont evolue relativement independamment les unes des autres, la premiere s’interessant aux strategies permettant aux entreprises de maximiser leurs profits, les secondes s’interrogeant plutot sur les strategies de developpement economique, social et politique des pays et des regions. Depuis quelques annees, ces deux domaines de recherche se penchent sur des questions liees aux firmes et a l’entreprenariat dans les pays en voie de developpement, mais les echanges et enrichissements mutuels entre les deux specialites sont limites. Cet article a pour but de montrer que si le dialogue entre ces deux disciplines ne se developpe pas, leur capacite analytique et de prevision risque, a l’ere de la mondialisation, d’etre serieusement compromise. Ce travail s’attache a identifier les champs de recherche au sein desquels des enrichissements mutuels pourraient etre favorises.

PurposeWhile the implications of outsourcing have been extensively studied from the point of view of the developed country multinational corporation (MNC) and its home economy, far less attention has been paid to the developing country firm (DCF) participating in the outsourcing collaboration. This article aims at presenting, evaluating, and synthesizing a number of theoretical contributions that may help build an agenda for future research on outsourcing from a DCF perspective.Design/methodology/approachThrough a review of the extant theoretical literature on outsourcing, the article seeks to explicate a DCF perspective on outsourcing.FindingsThe article argues that although several theoretical domains indirectly shed light on outsourcing from a DCF perspective, they are typically approaching the issue from a macro (country) and meso (industry) level perspective and rarely explicitly apply a micro (firm) level perspective. Moreover, they tend to view DCF strategy in outsourcing collaborations as functions of MNCs' strategies, not as strategies in their own right. In order to fill this apparent lacuna in the outsourcing literature, the article reviews a number of theories that may help building a research agenda on outsourcing from a developing country perspective.Originality/valueThe article contributes to the outsourcing literature by explicating a DCF theoretical perspective on outsourcing.

With economic globalization, Third World enterprises are increasingly collaborating with foreign firms through trade, subcontracting and equity linkages. The paper examines under which conditions linkages to foreign firms lead to environmental upgrading of Third World enterprises. Derived from the authors' research in a number of developing countries, the paper presents preliminary evidence of such upgrading. As the existing literature on environmental upgrading has a normative bias and tends to ignore economic mandates and constraints, the remaining part of the paper presents four theoretical frameworks based on standard business economics that may explain under which conditions linkages between Third World enterprises and foreign firms may be accompanied by environmental upgrading. It is argued that environmental upgrading in the value chain must be understood partly as a result of external industry and market forces, and partly as a result of the internal resources and competitive strategies of the companies involved. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment.

Traditionally, the extant literature on foreign direct investment and the natural environment has conceived the investment-environment nexus in terms of foreign investors exploiting weak environmental regulations and abundant natural resources in developing host countries. This paper provides a corrective to the literature's focus on location factors as determinants of foreign investors' environmental strategies. Based on a presentation of various insights regarding the environmental strategies of foreign investors offered by transaction cost economics, the paper reaches the conclusion that internalization, not location, may be the more significant aspect of the investment-environment nexus.

In the spring of 2011, the Danish press announced that the Indian billionaire Shrinivas Dempe would invest between DKK 75 and 100 million in the Danish Soccer club FC Midtjylland. FC Midtjylland was chosen out of 58 football clubs from 20 countries. The investment would allow the Indian investor to get a foothold in the Danish soccer league. But it was not only to get into the Danish soccer league that the investment was contemplating. FC Midtjylland had over the years built a unique and outstanding ability to develop soccer talent. Indeed, the investment was reported mainly to be motivated by acquiring knowledge about training and organization which eventually could be transferred over to the Indian soccer league. This would develop and enhance Indian talent and raise the standards in Indian football.

This paper introduces pattern-selective color image fusion and shows how it can be applied to two domains of image enhancement: extension of dynamic range and depth of focus. Pattern-selective fusion methods provide a mechanism for combining multiple monochromatic source images through identifying salient features in the source images at multiple scales and orientations, and combining those features into a single composite image result. In this paper, the pattern-selective fusion method is generalized into a framework that is equally applicable to monochrome, color, and multi-spectral imagery. This proposed fusion framework is then used to combine a set of color source images, taken from a sensor with varying aperture and focus settings, into a single fused image result that has improved dynamic range and depth of field over any of the other frames in the input sequence. Experimental results show the performance of the dynamic range and depth-of-field extension on imagery taken from consumer-grade video camera equipment.

Foreign direct investment (FDI) stock from developing countries has surged in recent decades, with a six-fold increase in the period 1990–2000, and a threefold increase between 2001 and 2008 (UNCTAD, 2006, 2009). Developing country FDI flows have increased from a level around US$ 30 billion in 1990–5 (annual average) to a level around $90 billion in 2000–5; and as a share of global FDI, FDI from these countries has doubled since the 1990s so that they by 2009 account for more than 20 per cent of global FDI (UNCTAD, 2010). The developing country investors are not merely small firms: 99 of the Fortune 500 companies are by 2009 from developing countries. The surge in developing country FDI is mainly derived from investment from Asian developing countries; in the early stages, Hong Kong, Singapore, Taiwan, and South Korea were leading, but more recently, India and China have become the leading Asian outward investors. This chapter will focus on the rise of Chinese and Indian investments.

Table of contents - 6[-]Preface - 10[-]Part I Introduction - 12[-] 1 Multinational corporations and local fi rms in emerging economies An introduction - 14[-]Part II Studies of spillovers and linkages between multinational corporations and local firms - 50[-] 2 The impact of foreign direct investment in business services on the local economy The case of Hungary - 52[-] 3 Do multinational companies transfer technology to local small and medium-sized enterprises?Th e case of the Tegal metalworking industry cluster in Indonesia - 76[-] 4 African small and medium enterprises and the challenges in global value chainsThe case of Nigerian garment enterprises - 102[-] 5 Mutual productivity spillovers and regional clusters in Eastern Europe Some empirical evidence - 124[-]Part III Policies to promote spillovers and linkages - 154[-] 6 Scope and eff ectiveness of foreign direct investment policies in transition economies* - 156[-] 7 Policies for attracting foreign direct investment and enhancing its spillovers to indigenous fi rms - 182[-] 8 Policies and institutions on multinational corporation-small and medium enterprise linkages The Brazilian case - 212[-] 9 Is attracting foreign direct investment the only route to industrial development in an era of globalization?The case of the clothing and textiles sector in South Africa - 232[-]About the authors - 268[-]Index - 274

A new breed of multinational enterprises (MNEs) has risen in recent years, namely MNEs from developing countries.1 These MNEs are emerging primarily out of the rapidly growing developing economies of Latin America and Asia. They are not content with taking the backseat in globalization, but rather seek to exploit the opportunities of globalization to their full extent. These MNEs have succeeded in becoming global leaders in industries such as electronics, advanced services, building materials, financial services, farm equipment, steel production, hotels and hospitality, and con-tract manufacturing. Meanwhile, MNEs like Cemex, Samsung, Hyundai, Infosys, CNPC, Lenovo, Mittal, Tata Group, and Flextronics are rapidly becoming household names in global industries.

The study addresses the implications MNC strategies have for linkage effects in developing countries. Two contrasting MNC strategies, which reflect an integration-responsiveness dichotomy, are scrutinized in terms of their effects on jobs among local linkage partners in developing countries. It is hypothesized that the investments of MNCs pursuing local responsiveness create more jobs among local linkage partners, but imply less job upgrading, when compared to investments undertaken by MNCs following strategies of global integration. The hypotheses are tested on a sample of Danish MNCs with extensive investments in developing countries.

Many years of mediocre performance of Indian industry has recently been replaced by a newfound optimism. Indian firms appear to be reasserting their role in the global economy, and global investors now see India as one of the main investment destinations of the future. That developing countries, like India, are attracting interest among foreign investors is not new. The new thing, however, is that developing countries themselves are becoming sizable foreign investors. In the last few years, India has seen an astoun ding growth in out ward foreign direct investment (OFDI): While inward FDI (IFDI) doubled between 2004 and 2006, OFDI grew four times in the same period.1 World class newcomer Indian firms are moving massively into IT and services in developed countries, and incumbent Indian houses are diversifying into the knowledge industry and/or acquiring the crown jewels of European and US manufacturing industry at intensifying rates. In industries such as pharmaceuticals, software, IT, telecommunications, and transport, Indian MNCs base their investments on advanced tech-nologies2, high knowledge intensity3 and on cutting edge strategies and organizational modes.4 Even within the traditionally highly protected Indian manufacturing industry we have seen a range of Indian manufacturing firms becoming global leaders in their industry.5 Thus, it appears that India is in the middle of an OFDI takeoff.