The Illusion of Political Power: Evidence from a Failed FDI in a Developing Market

Purpose – By means of this case study, we aim to learn from failure and provide an explanatory approach why the promising prospects in a developing country could not be exploited and strategic actions failed.

Design/methodology/approach – Based on literature within the areas of uncertainty, entrepreneurial activity and political strategy, we provide an event-based case analysis and develop an explanatory model as to why the foreign direct investment (FDI) failed.

Findings – Results provide insights on the effectiveness of political strategies and point to the relevance of entrepreneurial overconfidence as a diminishing cognitive process leading to a misinterpretation of both internal and external conditions.

Originality/value – The exploratory study provides in-depth insights on a failed business and presents an explanatory approach for the business’ collapse.