Extent of Scale Incidence of Holding Company or Group Enterprise

INVESTMENT
-
TRADE LINKAGES IN AFRICAN
-
ASIAN COMMERCE
315
the survey data suggest that a greater proportion of Indian firms operating in
Africa are part of a group structure than are standalone enterprises.
Effects of Scale on Regional Integration and Geographic Diversification
Outside Africa
Beyond the issue of whether a firm is part of a larger corporate group structure is the degree to which variation in this dimension of scale engenders differences in the facility for effectively integrating investment and trade activities. In part, this will likely depend greatly on how extensive is the geographic spread of the group structure. The presumption is that the greater the corporate geographic diversification, the higher the payoff from investment-trade linkages, hence the stronger the tendency for firms to exploit opportunities to be able to undertake them.
In this regard, the pattern of geographic diversification of the number of group member firms is quite notable in the WBAATI survey see table Not surprisingly, African-owned firms tend to exhibit by far the greatest geographic spread within their home countries. But in terms of geographical diversification across the African continent as a whole, Chinese-owned
(and to a much greater extent, European-owned) businesses appear to engage insignificantly more intra-African regional integration than do
African firms themselves. As Chinese and Indian firms participating in the business case studies revealed, intraregional barriers to trade, in part the result of de facto lingering high tariffs and NTBs, despite de jure regional trade agreements, actually have had the effect of engendering intraregional
(cross-border) investments rather than trade (recall figure 6.1 The contours of regional integration undertaken by foreign investors in
Africa sometimes result in market segmentation of the pan-African mar-
TABLE 6.4

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