Internal capabilities, national governance and performance in African firms

Henry Agyei-Boapeah, Abongeh Tunyi, Geofry Areneke, Jacob Agyemang

Research output: Contribution to journalArticlepeer-review


We explore the relations between firms’ internal capabilities, national governance quality (NGQ) and performance in the African context using a dataset comprised of 11,183 firm-year observations (1,490 unique firms from 15 African countries over a 17-year period). Our study offers new insights into how interlinkages between firms’ internal and external environment, shape corporate success. Specifically, we find that (1) firms’ internal capabilities (captured by financial resource-availability and growth prospects) are critical enablers of performance in both weak and strong institutional environments, (2) individual firms perform well in environments where their peers performs well, (3) NGQ directly enhances aggregate firm performance, and in tandem, the performance of individual firms, and (4) NGQ moderates the capability-performance nexus, by enhancing the translation of growth opportunities into profitability. The results highlight the critical role of firm-level financial resource availability and growth prospects in shaping corporate success in this challenging institutional environment.
Original languageEnglish
Pages (from-to)18-37
Number of pages20
JournalResearch in International Business and Finance
Early online date27 Apr 2019
Publication statusPublished - Dec 2019

Bibliographical note

© 2019 Elsevier B.V. All rights reserved. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy.


  • Africa
  • Firm performance
  • Internal capabilities
  • National governance quality

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