Competence and enterprise of management as drivers of early foreign listing of medium-sized emerging market multinationals (EMNEs) from Africa

Abstract

EMNEs from Africa are missing in global places and spaces, and Africapitalism is also meagrely represented within the capillaries of international investments, relative to the opportunities offered by globalisation and Africa’s rich natural resource endowment. Using the Penrosian MNE growth theory, we investigate how African firms' managerial competence and entrepreneurial behaviours can be enhanced by engaging foreign executive directors during pre, early and post-internationalisation. We conduct our analysis by using data from 157 companies domiciled in 17 African countries. Our results show that whilst access to liquidity, foreign managerial know-how, and experience are key drivers of early foreign listing of African EMNEs, these factors have less effect on corporate outcomes during the 3rd and 5th year without the moderating effect of foreign executive directors. We contribute to the international business and international entrepreneurship literature by showing that African EMNEs can succeed in global spaces if they leverage the expertise of foreign executive directors as they bring idiosyncratic industry and market knowledge during early internationalisation. EMNEs intending to internationalise must use a polycentric governing board structure to reflect the intended destination country. Our results imply that early listing on the international stock markets is among the key strategies latecomers use to enter a global game they are just learning to play.