Exploring emerging market multinational enterprises' divestment from  emerging markets

Chambers, Hannah

Exploring emerging market multinational enterprises' divestment from emerging markets

Thesis / Dissertation

2025

Publisher

University of Cape Town

Department

Graduate School of Business (GSB)

Faculty

Faculty of Commerce

Abstract

While many studies have examined the internationalisation of multinational enterprises (MNEs) into emerging markets, there is comparatively little research on their divestment from these markets. Additionally, most studies on foreign divestment focus on multinational enterprises from developed markets rather than emerging market multinational enterprises (EMNEs), leaving a gap in the literature on EMNEs' divestment from emerging markets which this research aimed to explore. This dissertation discusses how and why emerging market multinational enterprises (EMNEs) divest from emerging markets. Specifically, this research explores the antecedents of divestment, focusing on the divestment motives, decisions, and strategies of South African MNEs that operated in Nigeria in order to address the main overarching research question. Consequently, South African MNEs are the primary focus of EMNEs, and Nigeria is the focal emerging market for this research. This research employed a qualitative, inductive, and exploratory approach, utilising multiple case studies of South African MNEs that were operational in Nigeria before subsequently divesting. The research findings of this study were based on semi-structured interviews, with the majority of the interview participants being from the South African MNEs, along with two additional subject matter experts. To obtain the overall research findings from these interviews, the data was analysed through manual thematic coding, without the use of any coding software. Additionally, this research incorporated triangulation with secondary research in order to verify and add depth to the findings from the interviews. This study views the results of the reasons for divestment from three perspectives: host country turbulence and institutional voids leading to divestment, home country's institutional weakness influencing divestment and firm-related challenges influences on divestment. In conjunction with this, it then separately discusses the divestment approaches or strategies adopted. The findings of this study contribute to and have implications for academia, EMNEs, and stakeholders involved in international business operations.