Journal of Organisational Studies and Innovation
Vol. 1, no.1, summer, 2014
How a company does business with a country that does not “exist”: A case study of Genel Energy and Somaliland
Abdisamil Farah and Alireza Nazarian
University of West London
Abstract: The aim of this paper is to develop a better understanding of how the international non-recognition of a country impacts on its ability to attract foreign investment and on the investment decisions of potential investors. Through the use of the case study of Genel Energy in Somaliland this study comes to a number of conclusions: Firstly, determinants of foreign direct investment (FDI) in Sub Saharan Africa (SSA) as identified in existing literature such as political instability, infrastructure, human capital and insurance costs are similarly relevant in Somaliland. Secondly, this research identified three key elements of Somaliland’s international non-recognition as having a negatively intensifying effect on the factors that determine the flows of FDI to SSA. These have been classified as inability to develop bilateral and multilateral relationships, lack of access to the international banking system and uncertainty (future status, sovereignty and borders).
Keywords: FDI, Non-Recognition, Somaliland, Political Instability.