A Study on Decision Factors Influencing Multinational Enterprises’(MNEs) Selection of Regional Headquarters in Africa: The Case of the East African Community(EAC).
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This study investigates the key strategic factors influencing the selection of Regional Headquarters (RHQ) locations by multinational enterprises (MNEs) within the East African Community (EAC). In the wake of regional integration under the African Continental Free Trade Area (AfCFTA), understanding investor priorities is increasingly vital for shaping responsive economic policies. The research employed a multi-phase methodology: an initial screening process eliminated redundant or contextually irrelevant criteria, followed by a structured weighting exercise using the Rank-Order Centroid (ROC) method. Input was gathered from 30 experts across top, middle, and operational management levels, with responses weighted to reflect managerial influence. Ten location criteria grounded in established theories of international business were evaluated and ranked accordingly. Results reveal that a stable and favorable political environment, access to local and neighboring markets, and the cost of doing business are the most influential considerations for RHQ placement in EAC. Conversely, factors such as intellectual property regulation enforcement and technological innovation performance were rated lowest, suggesting limited current strategic relevance but potential for future development. These findings offer both theoretical and practical value: they contextualize existing investment frameworks within the EAC and provide policymakers with evidence-based priorities for improving regional competitiveness. Investors may also use the rankings as a decision-support tool when assessing RHQ opportunities across the region.
Abstract
This study investigates the key strategic factors influencing the selection of Regional Headquarters (RHQ) locations by multinational enterprises (MNEs) within the East African Community (EAC). In the wake of regional integration under the African Continental Free Trade Area (AfCFTA), understanding investor priorities is increasingly vital for shaping responsive economic policies. The research employed a multi-phase methodology: an initial screening process eliminated redundant or contextually irrelevant criteria, followed by a structured weighting exercise using the Rank-Order Centroid (ROC) method. Input was gathered from 30 experts across top, middle, and operational management levels, with responses weighted to reflect managerial influence. Ten location criteria grounded in established theories of international business were evaluated and ranked accordingly. Results reveal that a stable and favorable political environment, access to local and neighboring markets, and the cost of doing business are the most influential considerations for RHQ placement in EAC. Conversely, factors such as intellectual property regulation enforcement and technological innovation performance were rated lowest, suggesting limited current strategic relevance but potential for future development. These findings offer both theoretical and practical value: they contextualize existing investment frameworks within the EAC and provide policymakers with evidence-based priorities for improving regional competitiveness. Investors may also use the rankings as a decision-support tool when assessing RHQ opportunities across the region.