South Africa as a strategic operations destination for chemical manufactures

The decision to expand the operational base of the company into developingmarkets is but one of the many decisions that executives of multinational companiesshould be considering in todays age of increased globalisation. As foreign directinvestment can provide excellent alternatives to formal development capital,developing economies are increasingly leveraging this option to develop their homeeconomy and industries within it. This research paper investigates the determinantsof foreign direct investment by multinational United States based chemicalcompanies into the chemical industries of the world. This offers a potential solutionas to what the strategic reasons for this investment may be, as well as determineswhat the local country can do better to improve its position. The research clusters 26variables into five cluster groupings that include the value of human capital, level ofcountry infrastructure, industry performance factors, governance indicators andenvironmental compliance indicators. The variables within the cluster groupings aresubjected to a regression analysis with the investment of US multinationalcompanies into worldwide chemical industries as the constant variable. The resultsyield a model with a R² value for the regression of over 0.8 with six variablesconsidered significant contributors to the model. Copyright © 2009 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Serrurier, M 2009, South Africa as a strategic operations destination for chemical manufactures, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-05122010-132515/ > G10/367/ag