The Global Economic Crisis: Systemic Failures and Multilateral Remedies

Report by the UNCTAD Secretariat Task Force on Systemic Issues and Economic Cooperatio

Corporate multinationality and acquirer returns

This paper provides evidence on how corporate multinationality from the perspective of acquiring firms relates to M&A returns. Using multivariate regressions and a large dataset of over 6,000 M&As (both cross-border and domestic) by UK firms during 1987 to 2014, the paper finds multinationality to be associated with significantly higher short-run announcement returns and long-run operating performance. While the multinationality premium (higher M&A returns for multinationals) persists over time, it seems to be restricted to firms with superior resource/managerial capabilities and minimal agency problems. Finally, the multinationality premium appears to be driven by foreign acquisitions into advanced economies. The results are robust to correcting for sample selection bias and controlling for several firm and deal characteristics, as well as accounting for firm-, industry-, and year-fixed effects. Collectively, the findings imply that multinationality could be a source of value creation for acquiring firms, particularly in foreign acquisitions, which tend to be complex, and thereby, require superior managerial capabilities to succeed

Political risk assessment by multinational corporations in African markets: a Nigerian perspective

Political risk assessment (PRA) is one of the determinants of foreign direct investment (FDI) and the competitiveness of multinational corporations (MNCs), yet little is known about its use in African markets. This study critically investigates the PRA techniques used by MNCs in Nigeria and their applicability. It uses a multimethod approach to analyze data collected from MNCs and the data set of the International Country Risk Guide (ICRG) PRA annual rating for Nigeria from 2011 to 2015. The findings reveal that most firms use qualitative, rather than quantitative, PRA techniques. Regional variations in the outcome of PRA within Nigeria could also contribute to the low use of quantitative techniques. This article identifies that firms are prepared to invest in Nigeria, in spite of high political risk, due to its economic and financial attractiveness. This article’s findings offer some implications for practice with some suggestions on how it could influence firms’ internationalization and their conduct of PRA

Political risk and foreign direct investment in Africa: the case of the Nigerian telecommunications industry

Foreign direct investment (FDI) flows are expected to be influenced by political risk factors. However, studies that evaluate the relationship between political risk and FDI flows in Sub-Saharan Africa (SSA) are scarce. This study examines the impact of political risk on FDI flows in a SSA context using the 12 political risk components published as the International Country Risk Guide (ICRG) by the Political Risk Services Group (PRS) with the Nigerian telecommunications sector as a case study. The study finds that political risk has a significant influence on the inflow of FDI into developing economies in SSA such as Nigeria and that the 12 components affect FDI in different ways. Irrespective of the political risk rating, a consistent improvement in composite political risk enhances FDI inflow. Among the 12 components, corruption, law and order, democratic accountability and investment profile were found to have significant influences on FDI inflow into the Nigerian telecommunications sector. Corruption, in particular, explains nearly two-thirds of the FDI inflow

China, the G20 and the International Investment Regime

China has become a major home country for outward foreign direct investment (FDI) flows. As a result, the country is increasingly concerned with protecting its outward FDI and facilitating the operations of its firms investing abroad and creating a strong universal international investment law and policy regime. This article reviews briefly the emergence of China as an outward investor. It continues with an analysis of some policy issues related to the rise of FDI from emerging markets. A brief discussion of issues central to the future of the international investment law and policy regime follows, before focusing on several outcomes that could be pursued under China’s G20 leadership: non-binding shared principles that could outline the architecture of a universal framework on international investment; an international support program for sustainable investment facilitation; and the creation of an additional intergovernmental platform that would allow for a continued systematic intergovernmental process to discuss the range of issues related to the governance of international investment, preferably paralleled by an informal, inclusive and result-oriented consensus-building process that takes place outside intergovernmental settings

Mobile Phone Innovation and Technology-driven Exports in Sub-Saharan Africa

The study investigates how education, scientific output and the internet complement mobile phone penetration to affect technology commodity exports in Sub-Saharan Africa for the period 2000-2012. The empirical evidence is based on Generalised Method of Moments. The following main findings are established. First, the internet complements the mobile phone to boost technology goods exports. Second, the internet also complements the mobile phone to boost technology service exports. Third, positive marginal effects are apparent in the roles of educational quality and scientific output on technology goods exports and technology service exports respectively while negative marginal impacts are apparent in the roles of scientific output and educational quality on technology goods exports and technology service exports respectively. Practical and theoretical implications are discussed