Competition and inclusive regional economic growth in food production: Barriers to entry and the role of African multinational corporations

Abstract

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Barriers to entry and the role of African multinational corporations: Entrants in intermediate industrial products (inputs into construction)

“…For example, emphasis has been placed on measures to achieve deeper integration including through improved transport networks and enhancing institutions to support trade (Vilakazi 2018;Roberts et al 2017). However, growth and development through regional integration depend to a large extent on the decisions of companies to increase productive capacities and their willingness to make long-term investments (Roberts 2016;Bosiu and Vilakazi 2020).…”

“…Where large firms are able to extract profits without making meaningful investments in developing capabilities, competitive rivalry and growth can be harmed (Bosiu and Vilakazi 2020). This can be worsened where large firms face no risk to their dominant positions in the market.…”

“…However, for regional growth to be more inclusive, local firms need to be able to participate in value chains and grow their businesses domestically and regionally. This goes beyond participation in regional markets through international and regional trade by being able to make investments and expand geographically to establish operations across the region (Bosiu and Vilakazi 2020) in order to compete with larger, established regional firms. Competition, properly located, therefore means considering the dynamic process of rivalry, which has positive dimensions in the form of the ability to develop productive capabilities as well as negative dimensions such as barriers because of exclusionary conduct by large firms or regulatory barriers (Roberts et al 2017).…”

“…Competition, properly located, therefore means considering the dynamic process of rivalry, which has positive dimensions in the form of the ability to develop productive capabilities as well as negative dimensions such as barriers because of exclusionary conduct by large firms or regulatory barriers (Roberts et al 2017). The importance of building and expanding capabilities has been highlighted as being at the centre of a country's economic development (Bosiu and Vilakazi 2020). Inclusive growth therefore has a competition dimension and, for this to be properly understood in Africa, it needs to be viewed from the perspective of regional integration and regional competition given relatively small national markets (Roberts et al 2017).…”

“…Effective competition in the region requires independent rivals competing across borders and within domestic markets through innovation and effort, investment, product quality, and prices (Bosiu and Vilakazi 2020). To understand the constraints to more dynamic rivalry between firms within the region, research is required that considers the obstacles to integration from the perspective of fostering the development of domestic firms with strong capabilities.…”