Multinationals, Capital Export, and the Inclusive Development Debate in Developing Countries: The Nigerian Insight

European Journal of Development Research, vol. 34, pp. 2224–2250

Abstract

Abstract In this paper, we employed a blend of multiple and historical case study design, and a mix of institutional, behavioral, resource-based, and multinational theories, to examine the nature of multinational companies’ (MNC) engagements in local economic development and capital export practices in an African context. Evidence from our Nigerian case analysis (FrieslandCampina, Nigerian Breweries Plc. and Dangote Cement) confirms the proposition that, faced with a similar degree of uncertainty and constrained institutional environment and laying claims to differing sources of competitive advantage, both local and foreign MNCs would repatriate profits and limit exposures to local value chains (LVCs) mainly as a strategy for mitigating country risks and preserving corporate value. Such limited exposures detach MNCs, especially the foreign ones, from the LVCs, and by doing so push them to deeper reliance on the global value chains (GVCs). Linking local businesses to the GVCs is central in the inclusive development (ID) debate essentially because it allows for the redistribution of economic benefits, helps in building a complementary (rather than competitive) relationship between MNCs and local businesses, and facilitates local businesses’ access to international markets. We, therefore, recommend that in pursuit of the inclusive and sustainable development projects in Africa, industrial policies need to be tailored toward stabilizing the policy environment, protecting investments from risk of expropriation, and incentivizing MNCs’ participation in the LVCs.

Authors 8

1. Abel Ebeh Ezeoha

   Alex Ekwueme Federal University, Ndufu-Alike

   Affiliation as printed

   Federal University Ndufu-Alike , Abakaliki , Nigeria

   Federal University Ndufu-Alike, Abakaliki, Nigeria

2. Akinyinka Akinyoade Aachen African Studies Centre

   Leiden University · African Studies Centre

   Affiliation as printed

   African Studies Centre, Leiden University, Leiden, The Netherlands

3. Ifediora Amobi
   Affiliation as printed

   Anambra State Investment Promotion and Protection Agency, Abuja, Nigeria

4. Ogbuagu Onu Ekumankama

   Federal Polytechnic, Nasarawa

   Affiliation as printed

   Federal Polytechnic, Banking and Finance Nasarawa, Nasarawa, Nigeria

5. Paul Mbugu Kamau

   University of Nairobi

   Affiliation as printed

   Institute for Development Studies (IDS), University of Nairobi, Nairobi, Kenya

6. A.H. Kazimierczuk Aachen African Studies Centre

   Leiden University · African Studies Centre

   Affiliation as printed

   African Studies Centre, Leiden University, Leiden, The Netherlands

7. Catherine Mukoko
   Affiliation as printed

   Manufacturing Academy-Kenya Association of Manufacturers, Nairobi, Kenya

8. Chibuike Ugochukwu Uche corresponding Aachen African Studies Centre

   Leiden University · African Studies Centre

   Affiliation as printed

   African Studies Centre, Leiden University, Leiden, The Netherlands