Strategic Factors and Firm Performance in an Emerging Economy

Abstract

Purpose – As a result of the lack of reliable data, systematic research that informs public policy and practice from Ghana seems to be lacking. Although the World Bank's survey concerning Ghana's manufacturing sub‐sector has been available for some time now, yet little is known as regards firm level research and so policy formulation has been affected exceedingly. The purpose of this paper is to identify the strategic factors which influence firm performance from Ghana (an emerging economy).

Design/methodology/approach – This study employs the World Bank data set relating to a panel of firms within the Ghanaian manufacturing sector from 1991‐2002.

Findings – By pooling the data and setting OLS regression, the results of the study indicate that joint venture (JVs) ownership predicts significant performance compared with similar counterparts that are wholly indigenously owned. Besides, firm size, workforce productivity and the location where a firm operates are strategic drivers of firm performance in a significant way.

Originality/value – The paper shows that alliances with foreign businesses by indigenous firms from Ghana boosts the capacity of the local firms with regard to human and financial capital resources, as well as linking them to international supply and distribution networks that greatly enhance their performance.