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Internal capabilities, national governance and performance in African firms

Tunyi, Abongeh A and Agyei-Boapeah, Henry and Areneke, Geofry and Agyemang, Jacob (2019) 'Internal capabilities, national governance and performance in African firms.' Research in International Business and Finance, 50. pp. 18-37. ISSN 0275-5319

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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 (1490 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.

Item Type: Article
Uncontrolled Keywords: Firm performance; National governance quality; Internal capabilities; Africa
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Accounting Centre
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 11 Jun 2019 12:53
Last Modified: 06 Jan 2022 14:00

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