Divestments by foreign investors are not an area of interest for many host economies and their IPAs, as they are more focussed on attracting and retaining FDI. What drives once-committed foreign investors ultimately to exit? How do investors deal with investment dissonance? Which internal, external and interrelated factors drive divestment decisions made in the corporate boardroom? And what are the collateral effects these exits have on the host economy? This chapter explores these issues, as well as some practical implications to help practitioners and policymakers act pre-emptively and in strategic ways to deter foreign investors from exiting. It explores boardroom decision making, the role of shareholder activism and presents FDI as an asset within a wider business portfolio that investors regularly evaluate when deciding which investments to grow and which to divest.

It closes with practical considerations of how to best deal with divestments when they do occur, how to effectively manage such corporate exits and how to minimise any negative impacts on the host economy and to the various stakeholders involved.