Multinational Enterprises and the Provision of Collective Goods in Developing Countries under Formal and Informal Institutional Voids. The Case of Electricity in Sub-Saharan Africa |
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| Affiliation: | 1. DIG-Politecnico di Milano, Italy;2. University of Reading, UK;1. Glorious Sun School of Business and Management, Donghua University, 1882 Yan''an Road West, Changning, 200051, Shanghai, China;2. School of Economics and Management, Harbin Institute of Technology, Shenzhen, University Town, Nanshan, Shenzhen, China;3. Department of Technology Management for Innovation, The University of Tokyo, Hongo 7-3-1, Bunkyo-ku, Tokyo, Japan;1. School of Business, Jiangnan University, Wuxi 214122, China;2. Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China;3. Schulich School of Business, York University, 4700 Keele Street, Toronto, ON M3J 1P3, Canada |
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| Abstract: | Despite their unprecedented growth, developing countries still face severe problems in the provision of collective goods. Electricity, whose provision is scarce or unreliable in most developing regions, especially in Sub-Saharan Africa, is an emblematic case. The reason for this shortage is not only imputable to the lack of effective formal institutions, but also to the inefficacy of informal institutions in enabling alternative solutions for the production, transmission and distribution of electricity. We claim that in this context of “double institutional void”, foreign direct investment (FDI) and multinational enterprises (MNEs) can play a decisive role. However, their effectiveness depends on both the formal and informal institutional proximity between the home and the host countries. Our empirical analysis relies on panel data models run on a sample of pairs of home-host countries, the latter of which are all from Sub-Saharan Africa (SSA), observed from 2005 to 2011. |
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