PUSH FACTORS When we studied push factors, the information did not reveal insights that were particularly unique to the region. Rather, we found issues that are also reflective of other global locations and existing patterns but that are validated by primary data from Sub-Saharan Africa. All of the firmswe spoke to saw internationalisation as an essential element in their strategic vision for future growth; each highlighted their firmspecific advantages, such as their strong manufacturing and branding capabilities, assetmanagement expertise and industry knowledge. All face intense competition in stagnant homemarkets, withweak demand, market saturation and issues around regulation and competition policieswhichwere pushing themto expand elsewhere. Internationalisation is seen as ameans to reduce firm risk and revenue volatility; two of the firms used it as a way to sidestep stringent domestic financial regulation, and another as a way to reduce the impact of domestic political uncertainty. The case-study firms have accumulated important operational capabilities that they can transfer to other markets in the region. Some saw it as essential for operating in the region’s challenging institutional andmarket conditions, others used it to develop their own inhouse capabilities. This is an advantage firms fromoutside the region lack. There is a strong degree of similarity across the five firms in spite of their different sectors and home countries, suggesting that those factors play little part in internationalisation. PULL FACTORS It is when we come to the pull factors that we found important differences, as two new non-standard factors come into play – network links and diaspora demand. These are in addition to expected factors of host countrymarket growth, the acquisition of strategic assets and seeking efficiency. These new factorsmay reflect the distinct regional and/or developmental characteristics of Sub-Saharan Africa or may bemore widespread. The pull factors in Africamight be expected to differ fromother regions. Many national borders are artificial legacies of colonialism, and some countries share common cultural, linguistic and legal heritages. Distinct sub-regions (such asWest Africa) exist because of poor infrastructural links whichmake land-based interaction difficult. Therefore, similar sub-regional marketsmay attract more Foreign Direct Investment (FDI) as the liability of foreignness is relatively weak, reducing the cost of attainingmarket share and profitability. The role of diaspora demand is at least partly inter-related with firms’ presence in specific sub-regions, given crossborder cultural similarities andmigration patterns. Both Nigerian firms we examined cited its expatriate nationals as a separate pull factor. Thesemigrants offer a ready-made host country clientele, reducing the risk of foreignness. The Nigerian financial services firmspecifically targeted markets with a large Nigerian diaspora, while the telecoms firm focused on the onemillion Nigerians in Ghana because of their prior familiarity with its services. Network links with business partners, governments, suppliers and consumers are also seen as important – through corporate, ethnic and cultural linkages – as they reduce firms’ liability of foreignness inmultiple dimensions. This includes reputation building, collaboratingwith business partners, maintaining client relationships, securing strategic distribution channels and aiding market entry. Sustaining personal client and cultural networks within theNigerian diasporawere important to both companies fromthat country. Both these new factors reduce the firms’ liability of foreignness, the former through personal and business relationships, and the latter by providing a low-riskmeans to attain amarket share. They create ready-mademarkets at low cost in host countries. NEWHORIZONS Our work has shown the importance of gaining first-hand insight into business practice in emerging regions such as Sub-Saharan Africa, rather thanmaking assumptions or generalisations based upon unreliable and subjective secondary sources. By building relationships and talking directly to businesses on the ground, we have been able to provide evidence to support some widely-held theories but also to extend others, to say ‘with regards to Africa, these additional factorsmay apply’. The pull factor findings around diaspora effects and networks need to be reflected upon in research and in practice, and the data we have collected sets the bar for further research in the region. FIFTY FOUR DEGREES | 27 All of the firms that we spoke to saw internationalisation as an essential element in their strategic vision for future growth... ‘‘ ’’ Dr David Oludotun Fasanya completed a part-time PhD in Management (International Business) with Lancaster University Management School (LUMS) in 2018. He runs his own strategy advisory and consulting business, The Junglepreneur Group. The paper, Determinants of internationalisation by firms from Sub-Saharan Africa, published in the Journal of Business Research, is co-authored by, Dr David Oludotun Fasanya, Dr Hilary Ingham and Dr Robert Read.
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