Requisite Skill Availability and Multinational Corporations Locational Strategies in Nigeria

Abstract Research Background: Unemployment has been a major inhibitor of growth and development in Nigeria and it has been a perpetual problem that has proven insurmountable despite various governmental administration interventions and commercial policies to encourage the influx of multinational corporations and foreign direct investment. As such, this study examined the effect of requisite skill availability (RSA) on multinational Corporations locational strategy (LS) as there has always been skill mismatch inhibiting employability. Research Methodology: The study adopted a cross sectional research design and considered 5 multinational corporations in Nigeria by a random sampling technique. The statistical tools used included multiple regressions and a Correlation analysis through SPSS. Results: The results indicated (RSA) has a significant positive relationship with locational strategy (at p = 0.004). It was also observed that other controlling variables as trade facilitation, foreign ownership policy and structural infrastructural availability also has a significant positive effect. Novelty: The study recommends that; the government should provide an education and personal development platform that would make its citizenry employable based on the skills that are needed by multinational corporations to be localized in the country.


Multinational corporations have been adjudged to situate their businesses in locations
where there is accessibility to relevant skills and the labour needed for optimal operations.
The relevance of requisite skill availability and the location choices of multinational corporations (MNCs) have gained much attention in contemporary research. It focuses explicitly on the embeddedness of firms into local institutional environments (Du, Lu, Tao 2012). Foreign firms tend to become highly dependent on the institutional factors at the location of choice for investment and have to adapt themselves (at least to a certain extent) to the local institutional framework in order to gain legitimacy and integration within the regional economic system especially when it comes to sourcing for requisite skill and labour as graduate skill mismatch has been adjudged to be an inhibitor of the locational choices of MNCs in Nigeria (Awogbenle, Iwuamadi, 2010). Foreign direct investment (FDI) flow into developing countries depends even more on institutional parameters, since developed country MNCs are used to a business environment shaped by a set of rather complete market based institutions in their home markets (Kang, Jiang, 2012). Nevertheless, these MNCs are often big players in their industry and have the power to shape institutional contexts in the host country due to their large size, superior capabilities and dominant position in global value chains. Thus, an interdependent perspective on developmental institutional quality, location choices of MNC, and institutional change is needed.

Review of Literature
O.S. Pitan and S.O. Adedeji (2012) identified that demand exceeds the supply of requisite skills of most multinational jobs and found the mismatch of requisite skills to have adverse impacts on multinational companies. At the organizational level, lack of requisite skills inhibits firms' productivity or quality and competitiveness. The shortage of requisite skills has an undesirable impact on productivity due to the fact that most skills acquired by graduates are obsolete and it results in the higher cost of training, wages and recruitment costs, In addition, requisite skills mismatch may impede economic growth, a firm's competitiveness and innovative capacity at the macro-economic level. D. Hughes and G. Gration, (2009) reported in a study concerning employability that young people lack the knowledge and skills to search for and identify suitable programmes of study to make employers sought after them. Furthermore, employers were found to believe that "school, college and higher education systems are not delivering students with the employability and self-management skills, character and attitude they need". D. Saslavsky and B. Shepherd (2014) found that Industrial policies are major determinants of foreign investment inflow. A.O. Edun (2011) further showed that investment promotions by a government to multinational corporations is significantly and positively related with multinational inflows in developing countries as skill availability is part of the investment promotional tool.

Inference to the Search Theory of Unemployment
This research takes it footings on the search theory of unemployment of T.J. Fitzgerald (1998) which examines the labour market condition based on the assumption that "all unemployment is deliberate, for a skilled labour". In principle, the search model assumes that employees retrenched or sent out of an established-equilibrium position may face the choice of either; rejecting the lower wage-offer and become unemployed or accept a lower-wage pay, in order to remain employed. Thus, displaced skilled and professional workers choose to be unemployed and devote enough time to search, for an alternative offer, not less than the previous offer their services had, in a new working environment. Also, individuals in Nigeria look for jobs which are not available and sometimes what they are not qualified for (Pitan, Adedeji, 2012).

Research Method
The study considered the survey research method which involves the use of a structured questionnaire to obtain data from respondents on their perception of the requisite skill availability and locational strategy of multinational corporations. The reason for the use of the survey research method is because few researchers used research of this nature (Dennis, Shepherd, 2011;Ahmed, Andersson, Hammarstedt, 2012) and it is a better option in Nigeria's case because secondary data on skill availability is limited. The study population cuts across all levels of

Sample Size Determination
The MaCorr sample size software calculator designed to electronically calculate sample size by imputing a population figure was used to determine sample size. The Population is 9,367 employees with 95% confidence level which gives a sample size of 369 approximated to 375 number of questionnaire to avoid a shortfall and give equal representation to the multinational respondents. Below is a vivid depiction of the sample size calculator in operation.

Presentation of Data
The research questionnaire was administered to three hundred and seventy five (375) employees which is the sample size representing the chosen study population of the selected 5 multinational companies in Nigeria. Of this sample, three hundred and forty six (346) questionnaires representing 92.3% were returned, and twenty nine (29) questionnaires representing 7.7% were not returned.

Frequency Distribution of the Respondents' Demographic Characteristics
The frequency distribution of the respondents' demographic characteristics is presented in are lower level managers.

Descriptive Statistics of the Respondents' Perceptions
The descriptive Statistics considered other moderating independent and dependent variables alongside skill availability which could influence multinational locational choices.
The variables include trade facilitation, foreign ownership, structural infrastructural availability, and cost of operation, employment creation capacity and corporate productivity. Respondents' Perceptions is presented in Table 2. Concerning the bolded skill availability, we have information from 346 respondents; the range of skill availability is from 1 to 4 points, with a mean of 3.06 and standard deviation of 0.606 and locational strategy is from 1 to 5 points with a mean of 3.67 and standard deviation of 0.665. By implication, the respondents on average, agreed with the questions on skill availability and locational strategy.

Data Analysis Based on the Hypothesis
The hypotheses of the study are: (1) trade facilitation, foreign ownership, skill availability and social infrastructure availability does not significantly affect the cost of operation of multinationals. To test this hypothesis and achieve the objective of the study, a multiple regression analysis was used and based on a correlation because it allows for a more sophisticated exploration of the interrelationship among a set of variables. It makes a number of assumptions about the data which are: 1. Normality: It is assumed that the dependent variable is normally distributed (i.e. employability).
2. It is assumed that the independent variables (trade facilitation, foreign ownership, skill availability and social infrastructure availability) are not highly correlated.
3. Homoscedasticity: It is assumed that the variations among observations is even.

Test of Normality
A normal curve was drawn to test for the normality of the dependent variable (locational strategy). Figure 2 presents a normal curve.

Test of Multicollinearity
Multicollinearity exists when the independent variables are highly correlated (that is r = 0.7 and above). B.G. Tabachnick and L.S. Fidell (2001) suggested that you 'think carefully before including two variables with a bivariate correlation of 0.7 or more in the same analysis'. There is need to consider omitting one of the variables. To check for multicollinearity, the bivariate correlation was conducted in Table 3 below. In the table, the highest correlation was 0.544.
It shows a low multicollinearity problem among variables (trade facilitation, skill availability, foreign ownership and social infrastructural availability). Therefore, all the variables are retained.

Test of Homoscedasticity and Linearity for hypothesis One
From the output below, there appears to be a moderate, positive correlation among the variables. Respondents that are highly affected by trade facilitation, skill availability, foreign ownership and social infrastructural availability experience low levels of locational strategy.
On the other hand, employees which are less affected by trade facilitation, skill availability, foreign ownership and social infrastructural availability have much higher levels of locational strategy. There is no indication of a curvilinear relationship (test of linearity) and the scatter plot shows a fairly even cigar shape along its length (test of Homoscedasticity).

Test for Hypothesis One
Ho 1 : There is no significant effect of requisite skill availability on multinationals locational strategy.
A standard multiple regression was used to explore the effects of trade facilitation, foreign ownership, skill availability and social infrastructure availability on employment creation capacity. The result of regression as contained in Table 4 -ANOVA, shows that the F-test was 1.8803, significant at 1% (p < 0.000). This showed that the model was well specified. Also, the result of regression as contained in Table 5 -Model Summary, shows that the R Square gave a large value of 95.7%. This means that the model (which includes trade facilitation, foreign ownership, skill availability and social infrastructure availability) explained about 95.7% of the variance in the perceived locational strategy. Specifically, the result of regression as contained in Table 6  Also, although, there was a positive relationship between perceived skill availability and perceived locational strategy such that a unit rise in perceived skill availability scores induced about a 0.019 unit rise in perceived locational strategy scores which was statistically significant at 1% going by the p value (0.004). Based on the result, the null hypothesis is accepted; thus skill availability affects locational strategy.
More importantly, there was a positive relationship between foreign ownership and perceived locational strategy such that a unit rise in perceived foreign ownership scores induced about a 0.98 unit increase in the perceived locational strategy scores which is statistically significant at 1% going by the p value (0.000). Based on the result, the null hypothesis is rejected; thus, there was a relationship between foreign ownership and the perceived locational strategy.
Furthermore, the relationship between the perceived social infrastructural availability and perceived locational strategy is shown in table below such that a unit rise in the perceived social infrastructural availability scores induced about a 0.023 unit rise in the perceived locational strategy scores which was statistically not significant at 1% going by the p value (0.106). Based on the result, the null hypothesis is accepted; thus social infrastructural availability did not affect the perceived locational strategy.

Discussion of the Findings on the Hypothesis
The findings of the study further revealed a positive relationship between requisite skill availability and locational strategy. This indicates that the more the government mechanism tries to support education and professional skill acquisitions, the better for the state of operation of multinationals which will indirectly enhance the state's value and human capital performance. This is in agreement with Y. Kang nad F. Jiang (2012) who pointed out that foreign firms become highly dependent on the institutional factors at the chosen location for investment and have to adapt themselves (at least to a certain degree) to the local institutional framework in order to gain legitimacy and integration within the regional economic system especially when it comes to sourcing for requisite skill and human capital as MNCs sometimes prefer their nationals in core areas of competence (Timokhina, 2014). Skills mismatch affects the competencies of an average Nigerian graduate as employers now require skills that are beyond academic which includes critical thinking, communication, entrepreneurial, IT (information technology), problem-solving skills because there is an expectation that workers should be able to adapt to a dynamic multinational work environment. A. Ahmed et al. (2012) pointed out that employers looked for workers who have been trained and who are refined to perform on a job due to market competitiveness and the high cost of on-the-job training as a gap between the demand and supply of skills has a tendency to have unbearable negative impacts on multinational organizations. Also, the unavailability of requisite skills leans toward reducing firms' productivity and quality at organizational level. To this end multinationals tend to site their locations in areas or states where there is requisite skill availability in order to stay competitive in the ever changing business environment.

Theoretical Findings from the study
Operating in a foreign country market has many costs and these "costs" include failure of knowledge about local market conditions even as it has to do with labour, competencies and proper placement in relation to multinational decisions on destination choice of investment.
Also, graduates need to acquire skills that are more in demand by multinational corporations in order to attract foreign direct investment.

Empirical Findings from the Study
The findings by W.O. Akerele and A.O. Opatola (2004) and A. Ahmed et al. (2012) is tangential to this study as it further situates that there is a significant relationship between requisite skill availability and the locational strategy of multinational corporations. Ahmed et al. (2012) discovered that there are other attributes (non-academic skill requirements) which employers emphasize, such as good personal interaction, communication, social skills, and analytical skills that are required for job suitability.

Conclusions
The findings of this study as well as the recommendations thereafter are strategic tools for positioning firms for competitive advantage in the industry and among the comity of nations at the global level.

Policy Recommendations
1. The Nigerian graduates are encouraged to continue to develop themselves on personal development and in training workshops so as to make them more employable for multinational corporations due to the fact that only skills that are competitive are required and sought after by multinational corporations.
2. Skill development programs have their multiple effects on making employment processes more competitive in nature because it positively affects the employability capacity of multinational corporations to get the best of employees for their jobs.
3. There is a need for the good aptitude of graduates to be developed in non-core academic areas in order to match the current global job realities of multinational corporations because what gives the best jobs in multinational corporations is beyond academic aptitudes.