Highway One to Nairobi

Sammanfattning: Frontier markets have had an increased impact on global economy in recent years. The high market growth rate has attracted investors with desire to seize opportunities for successful return on investments, from all over the world. Nonetheless, the lack of understanding of company development in Frontier markets has built an investment barrier between investors and companies in Frontier markets. Theories on company development has the potential to increase insights in potential investment prospects for investors. However, the current most prominent company development theories have been developed and empirically tested in the U.S. while not validated in Frontier markets. Substantial critique has been directed towards the failure among company development theories to acknowledge the impact of environmental factors on company development. Against this background this thesis set out to stress test company development theories in Frontier markets through a multiple case study of three African countries. By merging a selection of popular company development theories to an aggregated model the thesis strived to identify possible deviations between empirical findings and the constructed theoretical benchmark. When deviations from theories were identified, we investigated environmental factors present in Frontier markets for their ability to explain these deviations. The results from the case study suggests that company development theories fail to correctly depict company development in Frontier markets. Conclusions regarding which environmental factors impacts company development must be drawn while bearing in mind the sources of errors that may erode the reliability of results. Four environmental factors are suggested to impact company development in Frontier markets. The framework developed to observe and explain deviations between theory and empirical findings was proven useful and is suggested to be applicable in Frontier markets outside this case study.