Article 18316

Title of the article



Sapuntsov Andrey Leonidovich, Candidate of economic sciences, associate professor, senior staff scientist, Institute for African Studies, Russian Academy of Sciences (30/1 Spiridonovka street, Moscow, Russia),

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Background. Russian TNCs have certain competitive advantages in African markets, however by the end of 2013 the stock of Russian FDI in Africa was only 2 billion dollars or just 0,5 % of such total investments abroad. The value determines the necessity to invest more actively and to find new partners for undertaking mutual projects, in particular, from BRICS countries. TNCs from extracontinental Big China (Hong Kong, Macao, Taiwan and Singapore) have achieved significant success in the African investment expansion and have done many beneficial things for host countries, however in some cases the mistakes were made and the negative external effects occurred – such instances should be considered in business ventures invol¬ving Russian parties. The purpose of the article is to determine tendencies in organization of African business by companies from the abovementioned countries.
Materials and methods. The article studies financial statements, subject to disclosure by public TNCs in accordance with the legislature, in particular, under the requirements for listing on the Singapore, Hong Kong, Taipei, Johannesburg and other stock exchanges. Data from national statistical authorities was analyzed, as well as publications by the International Monetary Fund and U.N. Conference on Trade and Development. The methods of statistical data analysis were used, and the comparative analysis has allowed for the determination of positive and negative outcomes of the business organization. The analysis in history and economics, abstract and logic studies have been applied.
Results. It has been determined that entities from the studied countries have shown signs of competitive advantages in the African markets. These enterprises have established production facilities for output of manufactured goods, have hired local employees, and are selling goods and services in host African countries and also manage to make exportations while the value added by the Africans is constantly increasing. The entry into markets of services in host countries is a positive feature of such business while the ability to establish large plantations sometimes is inferior to the network relationships with smaller African agrarians due to alteration of the landscape, eradication of traditional crops and changes in lifestyles of Africans – such things cultivate the hostility.
Conclusions. The analysis conducted allows to forecast that the companies form extracontinental Big China can enter into new branches of Africa’s manufacturing, such as food producing enterprises, and to activate business in services, especially in telecommunications. The financial sanctions against Russia and the countermeasures related to the ban on food imports has determined the reasonability of using new opportunities to invest into Africa’s agriculture. It will be more effective to realize such investments in cooperation with the studied TNCs, however a relevant strategy needs to be developed and implemented in order to minimize negative externalities in business organization.

Key words

TNC, FDI, Singapore, Hong Kong, Taiwan, Africa, agriculture

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