difficult to tell how promising the business really is. This conundrum can be solved by avoiding the business altogether. Perhaps the most common approach to distributing in uncertain environments when specificities are high is not to enter the market at all. Because those activities that firms decide not to pursue are difficult to observe, it is not known how often such business activities are never undertaken. Yet, non-market-entry, while difficult to notice, is always present and is frequently attributed to other factors.
For example, multinational business activity occurs at very low levels in sub Saharan Africa, even though there are rich potential markets in a region of more than 700 million people. This often is attributed to high political risk and lack of economic development; however, multinationals operate in other risky, underdeveloped markets, many of which were largely ignored only a decade earlier. Why continue to over- look Africa? One explanation is that(a) many African markets are little known and potentially highly volatile and(b) the lack of distribution infrastructure implies that much of what the manufacturer does to distribute will be idiosyncratic in that market. The combination of uncertainty and specificity, as opposed to uncertainty alone, may help explain low investment in Africa (of course, many other factors contribute to the phenomenon as well). In contrast, some politically risky Asian countries have better distribution infrastructures, permitting multinationals to find qualified third parties already operating in the market. With specificity removed, uncertainty can be handled by outsourcing, encouraging more market entry.
It is noteworthy that market entry by some firms encourages more entry and that it does so by reducing specificity. Once a number of multinational corporations (MNOs)