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

Young Hoon An (The York Management School, University of York, York, UK)
Soonkyoo Choe (School of Business, Yonsei University, Seodaemun-gu, Republic of Korea)
Jihoon Kang (School of Business Administration and Accounting, Andong National University, Andong, Republic of Korea)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 1 March 2021

Issue publication date: 13 July 2021

205

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.

Keywords

Citation

An, Y.H., Choe, S. and Kang, J. (2021), "Ways to win: strategic choices, institutions and performance in sub-Saharan Africa", Multinational Business Review, Vol. 29 No. 3, pp. 374-396. https://doi.org/10.1108/MBR-05-2020-0105

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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