IBS Lunchtime Research Seminar - The unpredictability of formal rules and MNEs’ greenfield investment location choice: Evidence from Africa

You are cordially invited to attend an International Business and Strategy Departmental Research Meeting, during which there will be a presentation by Ishmael Ali Esson (PhD Student), Henley Business School. A reminder that attendance for IBS (full time, research oriented) staff and full-time students is compulsory, and where possible, must be in person. Individuals unable to attend in person, due to legitimate reasons will be provided a Teams link on request. Non-IBS staff are welcome to attend. If you have not received the email invite please email Angie Clark

Please join us in Room 108, Henley Business School.

Please make sure you let me know in advance if you intend to attend in person so that the correct amount of catering is booked.

Date: Wednesday 20th May 2026, HBS Room 208

Time: 13.00 - 14.30

Abstract

This paper develops the concept of unpredictable formal rules, extending New Institutional Economics’ (NIE) traditional view of formal institutions as relatively stable and path-dependent, to examine multinational enterprises (MNEs)’ investment location choice and the conditions under which these changes matter. Using data on 5,145 greenfield investments by 2,330 MNEs across 50 African countries from 2014 to 2021, the study shows that unpredictable formal rules significantly reduce the likelihood of MNE entry. Importantly, this negative effect is contingent on firms’ prior foreign experience: host-country and regional experience diversity robustly attenuate the deterrent effect, whereas regional experience and experience with unpredictable formal rules accumulated through prior operations offer limited mitigation. These findings extend internationalization theory and NIE while highlighting the nuanced benefits of host and regional experience diversity in Africa’s complex and evolving institutional environments. By revealing how different forms of foreign experience shape adaptive responses to unpredictable formal rules, the study advances a more contextually grounded understanding of internationalization in emerging markets and underscores the differential adaptive value of experiential learning.