As part of the CBP seminar series, Professor Nigel Driffield (Warwick Business School) will provide a presentation on ‘A Real Option Perspective on Outward FDI from Emerging Markets: The Case of Africa’.


We adopt real options theory to examine outward FDI by African multinational enterprises (MNEs). We posit that the exercise of the growth option entails African MNEs investing within Africa, whereas the exercise of the switch option entails African MNEs engaging in FDI outside of the African region. Employing firm-level African outward FDI data over 2013-2019 period, we find broad support for the study’s hypotheses. The less uncertain African home countries are, the more Africa MNEs will invest within Africa to exploit firm specific advantages in more familiar environments, whereas the more uncertain African home countries are, the more African MNEs will invest outside Africa to reduce uncertainty and diversify risks.

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