Ways to win: strategic choices, institutions and performance in sub-Saharan Africa

Young Hoon An, Soonkyoo Choe, Jihoon Kang*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

5 Citations (Scopus)

Abstract

Purpose

The purpose of this study is to analyse the effects of market-based and nonmarket-based strategies on firm performance in African countries. This study also investigates host country institutions' effect on the relationship between firm strategies and performance in these countries.

Design/methodology/approach

Data of 1,276 firms in five African countries were obtained from two different sources: The World Bank Enterprise Database and The Global Competitiveness Report. Two-stage least squares regression was applied.

Findings

Both market-based strategies and corporate political activity (CPA)improve firm performance in the African countries included in the analysis. Institutional development also has a direct positive impact on firm performance. However, the effect of CPA weakens as the host country shifts towards more efficient, market-oriented institutions. Furthermore, the results show that local African firms benefit more from institutional development than foreign firms.

Originality/value

The paper confirms and extends our understanding of the dynamic fit between institutions and strategy by highlighting the moderating role of institutional development on CPA and market-based strategies in enhancing firm performance.

Original languageEnglish
Pages (from-to)374-396
Number of pages23
JournalMultinational Business Review
Volume29
Issue number3
DOIs
Publication statusPublished - 13-Jul-2021
Externally publishedYes

Keywords

  • Africa
  • Institution-based view
  • Emerging markets
  • Corporate political activity
  • Institutional void
  • Market-based strategies

Fingerprint

Dive into the research topics of 'Ways to win: strategic choices, institutions and performance in sub-Saharan Africa'. Together they form a unique fingerprint.

Cite this