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Should We Stay or Should We Go? Exit Likelihood of Foreign Subsidiaries

  • Jan 9, 2017

Ivey researchers discover that how firms enter African markets can determine how likely they are to stay, and succeed, in that market.

Should We Stay or Should We Go? Exit Likelihood of Foreign Subsidiaries

This study considers the exit likelihood of foreign subsidiaries operating in Africa and identifies strategic orientations which can improve their chances of survival. Ivey doctoral student Yamlaksira Getachew and Professor Paul Beamish find that, on average, subsidiaries entering the African market have a greater exit likelihood than those entering the OECD market. However, those subsidiaries entering the African market with diverse investment purposes or greater market-seeking orientation are less likely to exit as they tend to enjoy flexibility, adaptability, and learning advantages useful in mitigating economic challenges and/or tapping into strategic opportunities.

Getachew, Y. S. and Beamish, P. W. (2016), “Foreign Subsidiary Exit from Africa: The Effects of Investment Purpose Diversity and Orientation,” Global Strategy Journal.


Tags

  • Paul Beamish
  • PhD
  • International Business
  • Investing