Abstract
South Africa faced considerable turbulence in the second half of the 20th century. This turbulence resulted partly from institutional change, specifically the weakening and then restoration of the property and political rights of the full population. Turbulence also resulted from the widespread resistance to Apartheid and associated social instability. By longitudinally examining the South African case from 1956 to 2012, it is clear that turbulence, more than the weakness of institutions, triggered outward FDI (OFDI). In fact, OFDI was high even once social stability had returned but during institutional reforms, suggesting that firms avoid complex, rapid change in the environment. This study contributes to the growing body of literature on home-country effects in the internationalization of firms by providing empirical evidence of the hitherto overlooked role of home-country turbulence in the internationalization of emerging market MNEs.
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