This is a cross-cultural study that determines South
African multinational enterprises (MNEs) entry strategies as they
invest in Africa. An integrated theoretical framework comprising the
transaction cost theory, Uppsala model, eclectic paradigm and the
distance framework was adopted. A sample of 40 South African
MNEs with 415 existing FDI entries in Africa was drawn. Using an
ordered logistic regression model, the impact of culture on the choice
of degree of control by South African MNEs in Africa was
determined. Cultural distance was one of significant factors that
influenced South African MNEs- choice of degree of control.
Furthermore, South African MNEs are risk averse in all countries in
Africa but minimize the risks differently across sectors. Service
sectors chooses to own their subsidiaries 100% and avoid dealing
with the locals while manufacturing, resources and construction
choose to have a local partner to share the risk.
Cross-cultural, emerging MNEs, entry strategies,