Pre-Entry Experience, Postentry Adaptations, and Internationalization in the African Mobile Telecommunications Industry

Abstract

We study the evolution of the African mobile telecommunications industry from its effective beginning and explore the sources of ownership advantages among indigenous firms, by assembling historical qualitative and quantitative firm-level data. Our historical qualitative findings suggest that a few start-ups gained industry-specific knowledge through their pre-entry experience, directed their postentry development of capabilities toward adaptations to challenging market and operational conditions, and leveraged their adaptive capabilities to enter and compete in other African countries. Using our quantitative panel data, we show that these firms successfully internationalized across the continent. In particular, compared with other start-ups, they had higher rates of foreign entry in African countries that had relatively weaker rule of law, and greater market reach in African countries that had relatively larger low-income consumer segments. These patterns corroborate that their capabilities for overcoming the industry’s challenging market and operational conditions were their key ownership advantages. Through our triangulated analysis, we show that inherited industry knowledge provides a foundation for postentry capability development, and entrepreneurial leadership guides this process to create ownership advantages for regional internationalization.

Scaling Technology Ventures in Africa: New Opportunities for Research

“…While the complex institutional contexts facing African entrepreneurs can be cast as a significant challenge to scale technology ventures, they can also be seen as a source of entrepreneurial opportunities. That is, similarities across African economies in their institutional infrastructure may enable rapid scaling across similar such economies with little danger of competitive entry from ventures originating from very different institutional circumstances (Jahanbakht et al, 2021).…”