Developing countries present some of the most exciting investment opportunities. How can they attract more capital to create jobs, modernize and eliminate poverty?
The goal of my research is to help developing countries get the most out of direct investments. I think this is very important for several reasons: creating more jobs, bringing in technology, and ultimately, eliminating poverty.
Companies invest too little in developing countries because they consider them riskier than developed countries. Many managers have limited information about these countries and the actual level of risk in them.
In my research I look at how companies can protect their investments in developing countries and other foreign markets where the risk is higher than in the company’s home country. Together with colleagues from BI and abroad I am trying to develop a set of managerial and legal tools companies can use to safeguard their investments.
I also look at impact investing companies like the Norwegian Investment Fund for Developing Countries (Norfund). These companies are set up to help build sustainable and profitable companies in developing countries that would otherwise not be funded because they are considered too risky. I try to understand how companies like these help de-risk investing in developing countries.
Through my research, I hope to change investors’ attitudes to developing countries, especially African countries. Developing countries present some of the most exciting investment opportunities right now, and this is a trend that will continue.
At the same time, they receive the lowest share of direct investments. Research shows that the problem partly is a lack of knowledge by investors about these countries and how to deal with the associated risk.
I believe that through rigorous research, risks in developing countries can be managed to deliver the highest returns to investors. This will help firms attract more capital and do more good in the countries that need it the most.
I try to organize my teaching so that it is as practical for students as possible. For example, I always design course content using cases from real companies I am researching or consulting for.
In the future I plan to develop courses to enable my students to engage with practitioners and companies from developing countries to immerse my students in their business environments.
I have found out a lot of interesting stuff. For example, that African countries that receive more impact investments do more on sustainability. In a study looking at Norfund, we found that on average, investments in clean energy in African countries lead to a 4.5 percent increase in rural populations’ electricity access.
That is huge! Especially when you consider that 800 million people globally still lack access to electric power. Take Uganda, which has a population of 46 million, but where only 20 million have access to electricity. An average Norfund investment of around $12 million in clean energy could help provide power for over 1 million Ugandans.
If I couldn’t be a researcher, I would probably be a farmer.
Published 30. September 2022