Academic literature has increasingly shown escape foreign direct investment (FDI) to be a strategic motive used by firms investing abroad to diversify their risk to their home market. Internationalisation allows firms to mitigate the risk of being based in uncertain environments characterised by underdeveloped institutions and economic weakness (institutional voids), which are seen as comparative disadvantages. By expanding abroad, firms reduce their dependence on the home market for their revenues and profits. To date, most existing research has explored the characteristics, drivers and motivations for outbound FDI from emerging economies, but has paid relatively less attention to the economic consequences of such investments. The aim of this study is to gain an understanding of the economic consequences of escape FDI. Understanding the economic consequences of escape FDI will enable managers of South African multinational firms (MNEs) to develop and implement internationalisation strategies that create value, as measured by an increase in market capitalisation, for the firm. Quantitative, explanatory research methods were adopted in order to gain new insights into the economic consequences of escape FDI. The study adopted a longitudinal, multi-industry design and was deductive in nature. The population was 85 firms, which were investigated over a 5-year period, with an interval between 2013 and 2018. The data was analysed using descriptive statistics followed by confirmatory regression analysis. The key finding was that South African MNEs who invested in emerging markets, particularly in multiple host countries in Africa whilst adopting a “portfolio approach” to their international investments, delivered exceptional performance, creating significant value in the process. The secondary finding was that individual firms who either invested in emerging markets or developed markets created and destroyed value evenly, confirming existing literature that firms are heterogeneous and that a firms place in time and space, and thus context, matters fundamentally. The findings from this research add to the extant literature in the field of international business by introducing the “portfolio approach” to international investment strategy and performance. The implications for management is that firms need to understand their ownership advantages in designing and implementing international investment strategies because escape based FDI and related economic performance can have profound direct consequences for the firm itself, but indirectly on the wider community as a whole. / Mini Dissertation (MPhil)--University of Pretoria, 2019. / Gordon Institute of Business Science (GIBS) / MPhil (International Business) / Unrestricted