Can Multinational Enterprises Light Up Developing Countries? MNEs and Access to Electricity in Sub-Saharan Africa
44 Pages Posted: 2 Sep 2015
Date Written: August 31, 2015
Access to electricity is a marker for development but it is far from being universal in developing countries. In this context, multinational enterprises (MNEs) could play a role, especially if the country suffers from institutional voids. Using a panel of 1500 home-host country pairs, observed from 2005 to 2011, we show that MNEs promote access to electricity by deploying electricity infrastructures. This is more likely true if they come from institutionally weak environments. Thus, electricity infrastructures are not only essential for their business activities but they can be used as a legitimation mechanism to overcome their liability of origin.
Keywords: FDI, instiutional void, legitimacy, collective good, developing country, infrastructure
JEL Classification: F23, O10, H54, Q43
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