Legal Determinants Of Joint Venture Development In West Afric

The factors determining the investment decisions of multinational companies are variable and diverse,depending mainly on the economic advantages they can get from their investment.At the same time,one thing is clear companies seeking business opportunities abroad are more concerned with financial,political,and legal risks.So West Africa,like the majority of developing countries,is generally classified as a risky destination in most international economic institution reports.These risks typically relate to arbitrary government actions,excessive taxation,ineffective legal and dispute resolution systems,and high levels of corruption.In response,governments around the world recognize that their chances of attracting more investment depend on improving the competitiveness of their investment environment.Companies at their level are looking for the fastest and least risky way to develop their business and enter new markets.Several studies show that one of the ways to enter into a distance market with many barriers while limiting the risk is perhaps the joint venture.On the one hand,joint ventures offer the advantage of mitigating risks through the distribution of problems between the participating companies.For example,in a joint venture,a local partner can help with the administrative burden and facilitate market entry for foreign investors.Additionally,we know that creating a new product or delivering a new service involves a lot of risk for a business,and many businesses are not in a position to manage this risk on their own.Therefore,in a joint venture,each company contributes a portion of the resources needed to bring the product or service to market,making the heavy financial burden of research and development less difficult.The risk of the project failing and hurting profitability is lower because the costs associated with the project are shared between each of the participating companies.On the other hand,participation in a joint venture also involves risks for local or foreign participants.These risks are,among other things,related to conflicts of interest between the participating companies,these conflicts often involve the desire to control the joint venture,business opportunities,distribution of profits and responsibilities,and fair competition.Because of these potentially conflicting interests,each actor can expect opportunistic behavior from his partner and therefore hesitate to contribute his capital to the common project.So given the complexity of this kind of cooperation but also the need to improve the business climate in the countries concerned we strongly believe that improving the law can be big determinant to risk mitigation but also help attracting more and more investor in the region from this perspective we have chosen this topic << Legal Determinants of Joint Ventures Development in West Africa>>.In general,laws evolve with societies.This is why it is fundamental to place the law at the heart of economic strategies,because to be relevant and effective,the law must accompany global changes and those of the particular societies to which it applies.Investment policies reflect what governments expect from investment to achieve national goals,as well as the rights and responsibilities they attribute to investors and investment.So,the issue is why laws are important in attracting foreign investment and the development of joint ventures in West Africa.Thus,the purpose of this research is to try to analyze and understand how laws can be determining factors in the creation of a joint venture in West Africa.How can the legal system help improve the performance of joint ventures in the "ECOWAS" region,especially in countries like Nigeria,Ghana,C?te d’Ivoire,and Guinea?Following an in-depth review of the literature but also of the laws and regulations governing the creation of joint ventures in West Africa,we have developed concepts on which we have relied to collect data,build a company’s sample and questionary and then we conducted a series of interviews with managers and other employers of joint ventures operating in West Africa to find answers to the questions of what are the legal determinants for the development of joint ventures in West Africa.Based on data gained by questionnaires and theoretical discussion and sample company’s demonstration we can testify that there is: 1)-a correlation between risk mitigation and the strength of the law,but also the reliability of the institutions responsible for enacting and applying it in the host countries.That said investors are generally attracted to countries where they trust the legal system in countries where the laws are fair and non-discriminatory.Failing this,investors prefer to export to these countries rather than establish a physical presence,thus hampering the creation and development of joint ventures.2)The results also show us that it is obvious that the laws influence the choice and mode of entry of investors as well the legal structure of the joint venture.This means that the host country’s economic policy and their need for foreign investment or not can define the need of foreign investors to associate with a local person to create a joint venture or not but also the type of the joint venture.In doing so,we contribute to the enrichment of the existing literature and open a new avenue of research for the improvement of the business environment in West Africa.This article innovatively show that countries can use law as a tool to attract foreign investor in a joint venture framework which will help improving local companies’ skill but also help them having access to finance and foreign market as well.However,our study,like any human work,is far from perfect,without a doubt,it has shortcomings.Given the size and the number of areas that investment laws can cover but also the limited time we had to write this paper,we believe that there are still many other legal determinants to be analyzed to boost the development of joint ventures in West Africa.We highlight the deficiency of this study in the last part of this article.This thesis is divided into 8 chapters.Chapter 1: "Introduction",Chapter 2 is titled "Literature Review" In this chapter,we have reviewed the relevant literature to be able to develop our hypothesis.At this level,it is important to note that our preference for literature in the English or French language is not a neglect of other excellent literature that exists in others languages(such as Chinese),but rather,given the amount of literature to be read,so we chose to read documents written in English and French to be able to quickly read large volumes of content,but above all to better understand the different concepts.Chapter 3,entitled "The challenges of legal change and its impact on the creation of joint ventures in West Africa".In this chapter,on the one hand,we explain how economic policy can help shape the legal framework and create joint ventures.On the other hand,we demonstrate that an instability at the level of economic policies leads to legal instabilities that pose risks to investors,therefore reducing the desire for joint venture creation.Chapter 4 entitled "Exploratory research on joint ventures" Following the previous chapter which enabled us to understand and assess economic policies and their impacts on joint venture laws,we carried out an exploratory study on joint ventures in West Africa in order to better understand their distribution and the reasons for their creation,this chapter contains the data we have collected from various joint ventures based in West Africa.Chapter 5,is entitled "legal determinants of joint ventures",this chapter is the result of the 3 previews Chapters which allowed us to have a full picture of the legal determinants of the creation of joint ventures in West Africa and analyze them.Chapter 6 titled “In-Depth Case analyses,” in this chapter we interview joint venture managers to determine how the law affects their decision to choose a joint venture as their entry vehicle.In chapter 7,we present the main results of our investigation,and finally,chapter 8 contains our conclusions and recommendations.