International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue VIII, August 2022 | ISSN 2454–6186
Does Multinationals Entry Mode Affect Local Firms’ Export Behaviours? Evidence from Cameroon
Amza Mounchili Youwa1*, Henri Ngoa Tabi2
1Ph.D Student, Faculty of Economics and Management, University of Yaounde 2, Cameroon
2Professor, Faculty of Economics and Management, University of Yaounde 2, Cameroon
*Corresponding author
Abstract: This study verifies whether foreign presence namely Greenfield and Joint venture reduce or push up local firms’ exports behaviours using the Heckman sample selection model pooled over a survey firm-level panel data in Cameroon during 2006-2016 provided by the World Bank. we found that (i) Joint venture activities have more significant positive impact on Cameroonian export behaviours than greenfield affiliate; and (ii) such externalities are heterogeneous and depend on Cameroonian firm-level characteristics. Firm size, and firm age are found to have significantly positive impacts on the joint venture export externalities magnitude, while access land and financing and transport-related obstacles exert significant negative impacts on their side. Only the transport obstacle has a statistically significant negative effect on the greenfield export spillovers magnitude. Our findings present significant implications for policy makers seeking to help domestic firms benefit more from foreign-linked export spillovers such as promoting export-oriented joint venture and reducing obstacles related to accessing land and financing formalities and less complex appropriate customs measures.
Keywords: Multinationals, Greenfield, Joint-venture, Export spillovers, Cameroon.
JEL Classification : F23, F14, O19
I. INTRODUCTION
What are the factors that limit investment and exports from African countries? Over last decades, most of studies focus on industrial policies, skill, infrastructure quality, natural resources, high transaction costs or deficiencies in financial markets, and so on to address firm’s investment and export performance in Africa. But we observe that African countries always export little than they import. For example, in particular, Cameroon’s trade balance is structurally negative. According to the WTO, in 2018, Cameroon recorded a trade deficit of $533 million. The same source said the country imported $ 6.12 billion worth of goods compared to $3.80 billion for exports. A year earlier, service exports generated $1.84 billion while service imports amounted to $2.38 billion. Imports of goods and services accounted for 23.7% of the country’s GDP, while exports amounted to 19.3%.