Internal capabilities, national governance and performance in African firms

TY - JOUR

T1 - Internal capabilities, national governance and performance in African firms

AU - Agyei-Boapeah, Henry

AU - Tunyi, Abongeh

AU - Areneke, Geofry

AU - Agyemang, Jacob

N1 - © 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.

PY - 2019/12

Y1 - 2019/12

N2 - 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.

AB - 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.

KW - Africa

KW - Firm performance

KW - Internal capabilities

KW - National governance quality

UR - http://www.scopus.com/inward/record.url?scp=85064863440&partnerID=8YFLogxK

U2 - 10.1016/j.ribaf.2019.04.009

DO - 10.1016/j.ribaf.2019.04.009

M3 - Article

SN - 0275-5319

VL - 50

SP - 18

EP - 37

JO - Research in International Business and Finance

JF - Research in International Business and Finance

ER -