| Summary: | 碩士 === 東吳大學 === 國際經營與貿易學系 === 102 === In recent years, there have been more and more studies on African growing economy and its high return on investments. Africa is no longer the equivalents of war, disease and hunger. The continuous growth and development in African regional economy makes it a popular target market for foreign investors. The abundant resource, low labor costs, attractive investment policies and high returns provides great advantages and incentives for foreign investors.
However, Africa is not an individual economic entity. Instead, it consists of more than fifty countries. The fact that the natural resources in these countries are not distributed evenly and the level of economic development varies from country to country is something that the foreign investors need to consider when they decide to invest in Africa. On top of that, the instability of the political situation in Africa, the cultural difference, low education standard and the lack of infrastructure are also the risks factors that the foreign investors need to take into account when entering into the market. Under these circumstances, the entry mode is a crucial factor which determines whether the foreign investors will profit from their investment in Africa.
The aim of this study is to understand the factors which impacts on the acquisition of African business by multinational enterprises by observing their acquisition activities between 2000 and 2013. According to the study, the country of original effect, the target company’s governance indicators, the parent company’s level of globalization, the relevance of the industries of the parent company and the target company, the cultural difference of the parent company and the target company, the size of the local market of the target company and the settlement amount of acquisition are all factors that will influence the entry model. The differences in the economic development in each country in Africa are also an important factor that should be taken into consideration.
The findings from this study show that, the main factors that have impact on the acquisition in Africa include: the country of original effect, the parent company’s previous experience in investment in Africa and the relevance of the industries of the parent company and the target company. Interestingly, the results show those multinational enterprises which have previous experiences in investing in African businesses prefer not having complete ownership of the target company instead of increasing its share holdings in the local company. This indicates the uncertainty of investment in African. For those Taiwan enterprises planning to invest in African, this uncertainty also be taken into account.
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