Multinational Corporation and Expansion Strategies in Ethiopia E-Book

• Herausgeber: GRIN Verlag
• Sprache: Englisch

Veröffentlichungsjahr: 2025

Beschreibung

Academic Paper from the year 2025 in the subject Business economics - Operations Research, , language: English, abstract: This study examines the expansion strategies or market entry modes employed by Multinational Corporations (MNCs) operating in Ethiopia, with a specific focus on stakeholder agreement levels and strategic implications. Using a mixed-methods research design, the researchers analyzed survey responses from 2,478 participants across 413 MNCs through an Ordinal Logistic Regression model to evaluate six primary entry modes: Joint Ventures (JVs), Greenfield investments, Mergers, Acquisitions, Franchising, and Licensing. Other entry modes showed statistically insignificant responses and were therefore excluded from the final analysis. The findings revealed that JVs were the most common and effective entry mode, demonstrating 4.57× higher odds of strong stakeholder agreement (52.8% strongly agree) compared to Licensing (23.7%). Greenfield investments showed moderate success (1.97× higher odds than Licensing), while Mergers, Acquisitions, and Franchising had statistically similar outcomes after multiple-test correction. Chi-square tests revealed significant associations between entry modes and agreement levels (χ² = 298.7, *p* < 0.001). Post hoc analyses confirmed that JVs outperformed all other modes (*p* < 0.001), whereas Licensing consistently underperformed, with the highest disagreement rates (32.0%). Therefore, MNCs should Prioritize JVs for consensus-critical sectors (e.g., telecom, banking) due to their risk-sharing benefits and regulatory compliance, Use Greenfield investments where JVs are impractical, leveraging tax incentives (0% corporate tax in industrial parks for 10-15 years) and operational control, and avoid Licensing for initiatives requiring stakeholder alignment, given its low agreement potential. Finally, this research provides empirical evidence for MNCs' entry-mode selection in host countries, emphasizing the interplay between regulatory constraints, stakeholder consensus, and operational flexibility.