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      Maintaining corporate dominance after decolonization: the ‘first mover advantage’ of Shell‐BP in Nigeria

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            Abstract

            Nigeria's oil industry came into being during colonial rule. Preferential treatment by British colonial authorities had given a British oil company — Shell — a virtual monopoly over oil exploration in the country and Shell has remained the dominant oil company in Nigeria.

            While there is substantial evidence to suggest that Shell‐BP established its dominant position in Nigeria with the support of British colonial officials, it was by no means clear that Shell would be able to maintain this advantageous position. Indeed, the historical record shows that both the Nigerian government and a number of competitors posed a potential threat to Shell's dominant position.

            The purpose of this article is to answer the question why Shell was able to maintain a position of dominance in Nigeria. It examines Nigeria's diversification and nationalisation policies from the late 1950s to‐date with the view of identifying the factors which allowed Shell to maintain its position vis‐à‐vis potential competitors. This investigation is based on the analysis of secondary sources as well as documents from the Public Record Office (PRO) in London and the BP Archive.

            In order to explain Shell's dominance in Nigeria, the article proposes to utilise the concept of a ‘first mover advantage’. On the most basic level, this concept suggests that pioneering firms are able to obtain positive economic profits as the consequence of early market entry, that means, profits in excess of the cost of capital. The article concludes that a micro‐theoretical analysis based on the idea of a ‘first mover advantage’, which explores the position of individual corporate entities within a political economy framework, provides a superior explanation of Shell's dominance in Nigeria as compared to conventional macro‐theoretical structuralist approaches.

            Content

            Author and article information

            Journal
            crea20
            CREA
            Review of African Political Economy
            Review of African Political Economy
            0305-6244
            1740-1720
            September 2000
            : 27
            : 85
            : 407-425
            Affiliations
            a Senior Lecturer in International Business at Coventry Business School , Coventry University , Coventry , CV1 5FB , UK E-mail: j.frynas@ 123456coventry.ac.uk
            b Professor of Risk Management , Glasgow Caledonian University, Dept. of Risk and Financial Services , Britannia Building, Cowcaddens Road, Glasgow , G4 0BA , UK E-mail: mpb@ 123456gcal.ac.uk
            c Senior Lecturer in Management at Coventry Business School , Coventry University , Coventry , CV1 5FB , UK E-mail: bsx142@ 123456coventry.ac.uk
            Article
            8704475 Review of African Political Economy, Vol. 27, No. 85, September 2000, pp. 407-425
            10.1080/03056240008704475
            8dbb9ce0-ad5b-4346-a3ab-f1fe42231a39

            All content is freely available without charge to users or their institutions. Users are allowed to read, download, copy, distribute, print, search, or link to the full texts of the articles in this journal without asking prior permission of the publisher or the author. Articles published in the journal are distributed under a http://creativecommons.org/licenses/by/4.0/.

            History
            Page count
            Figures: 0, Tables: 0, References: 33, Pages: 19
            Categories
            Original Articles

            Sociology,Economic development,Political science,Labor & Demographic economics,Political economics,Africa

            Bibliography

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