Abstract:
The South African retail industry is the largest and most sophisticated in Africa. Intensive domestic competition coupled with less sophisticated retail markets in Africa has prompted many South African retailers to expand into the region. This research investigates the impact on shareholder value of announcements of foreign direct investment (FDI) into Africa by retail companies. The effect of FDI announcements of share price was evaluated using an events study. Based on a sample of 8 Johannesburg Stock Exchange (JSE) listed retail companies and 52 news events from 1994 to 2014, results show a mostly positive response in the share price to FDI announcements. The findings have practical use for corporate leaders’ internationalisation strategy, investor technical trading strategies and policy makers efforts to enhance intra-African investment.