The impact of foreign-owned enterprises in low-income economies

ABSTRACT

An economic impact snapshot of foreign and domestic enterprises from the functional economic areas of Guinea-Bissau showed that not all micro and small enterprises (MSEs) are local, and not all outside investment is large scale. We find that South–South entrepreneurship has prospects to improve livelihoods as drivers of economic growth and development in a low-income economy. While political instability and a lack of resources remain as barriers to solvency for both domestic and foreign investors in the global periphery, as opportunities and effective business strategies are fostered, improved socio-economic integration and development results.

KEYWORDS:

• Labour and livelihoods – Economics, Poverty reduction
• Globalisation (inc trade, private sector)
• Aid – Capacity development
• Sub-Saharan Africa

Acknowledgements

This research was partially funded through a CHSS Faculty Scholarship and CETL FY 2104 Incentive Funding Award for Scholarship and Creative Activity from Kennesaw State University. Student travel was partially paid for out of the Global Learning Scholarship fund. We are thankful for our university support. We want to acknowledge our translators and research assistants, Mario and Tchoca, for their hard work and professionalism. Furthermore, we would like to thank Banene and all the foreign business owners and Bissau-Guineans who spoke with us. We appreciate the thorough reading and careful critique by the two anonymous referees. Finally, we would like to acknowledge and thank the Instituto Nacional de Estudos e Pesquisa (INEP) for providing us with a research credential. This study was approved by the IRB as Study #14-151.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Brandon D. Lundy is an Associate Director in the School of Conflict Management, Peacebuilding and Development and Associate Professor of Anthropology at Kennesaw State University, Kennesaw, Georgia, USA. He serves as the editor of Economic Anthropology and as an associate editor for the Journal of Peacebuilding and Development. His work focuses on sustainable livelihood including food security, ethno-economics, transnational labour migration, and entrepreneurship.

Mark Patterson is a Professor of Geography in the Department of Geography and Anthropology at Kennesaw State University, Kennesaw, Georgia, USA.

Alex O’Neill is a recent graduate with a BS in Anthropology from the Department of Geography and Anthropology at Kennesaw State University, Kennesaw, Georgia, USA.

Notes

1 While we consider South–South investment and cooperation as a way of boosting economic reforms and developments in Guinea-Bissau, Abdenur and Neto (2014, 11) have also considered this same approach for enhancing peacebuilding efforts there.

2 International donors pledged more than one billion euros (US$1.1 billion) to Guinea-Bissau’s ten-year development plan to give the country a new start after democratic elections (Croft, Rossignol, and Felix 2015). Continued political instability, however, has derailed the release of funds (Corey-Boulet 2017).

3 A breakdown of the ethnic and national origins of the surveyed enterprises and a breakdown of the enterprise types and whether or not they were foreign or domestically owned can be found in Tables 2 and 3 respectively of Lundy, Patterson, and O'Neill (2017, 72–73).