Acta Universitatis Danubius. Œconomica, Vol 15, No 7 (2019)

Abstract

The objective of this study was to examine factors in the South African business environment that influence the foreign direct investment decision-making plans of multinational enterprises in the country. Although studies on foreign direct investment do exist, they have focused primarily on the determinants of foreign direct investment. Relatively little is known about the dynamics of foreign direct investment plans of multinationals already operating in the country. An internet survey was conducted with 76 senior executives from South African multinational enterprises. The findings demonstrate that macroeconomic, political, government policy, labour issues, bureaucracy, red tape, corruption and crime all influence the investment plans of these enterprises. However, despite this evidence, the multinationals do not intend to close down some or all operations in the country within the short term (next 1-3 years). This study expands the body of knowledge on foreign direct investment and multinational enterprises, shedding light on their operations and investment plans in African countries. This research will be useful for policymakers in South Africa as to decision-making by multinationals on foreign direct investment in the country. The study is also a starting point for future research on the dynamics behind foreign direct investment decision-making.