Managerial Ties and MNCs’ Performance in Ethiopia: The Moderating Effect of Institutional support Ebrahim Muhamed Endris & Zhou Xiaoyan

Managerial Ties and MNCs’ Performance in Ethiopia: The Moderating Effect of Institutional support

Author (s)

Ebrahim Muhamed Endris & Zhou Xiaoyan

Abstract

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Managerial ties are becoming crucial success drivers for MNCs in developing and emerging economies. The managers of multinational companies establish networking relationships with government officials and other business actors to secure access to resources, information, and infrastructures that enables them to provide a buffer against the high level of business environment uncertainty. In this way, this study develops and tests an interactive perspective that emphasizes the interaction of managerial ties and institutional support (e.g., implementation of policies, industry information, import-export services, and local resources such as land, electricity and human resources) in influencing MNC performance in Ethiopia. The proposed hypothesis was tested using hierarchical regression results, which were then double-checked using a process model, and the results were consistent. Based on a sample of 227 multinational companies in Ethiopia, it is found that both political and business ties have positive and significant influence on firm performance, and political ties have stronger effect on firm performance than business ties. In addition, in both ties, the interaction effect of institutional support on firm performance is negative. As a result, we conclude that both political and business relations promote MNC performance, but that the value of political and business ties is conditional on the strength and weakness of the government’s institutional support.

 Keywords: Social Capital, Managerial Ties, Institutional Support, Political Ties, Business Ties, Firm Performance.

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Title: Managerial Ties and MNCs’ Performance in Ethiopia: The Moderating Effect of Institutional support
Author: Ebrahim Muhamed Endris & Zhou Xiaoyan
Journal Name: International Journal of Science and Business
Website: ijsab.com
ISSN: ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)
DOI: https://doi.org/10.5281/zenodo.4744587
Media: Online
Volume: 5
Issue: 7
Acceptance Date: 08/05/2021
Date of Publication: 09/05/2021
PDF URL: https://ijsab.com/wp-content/uploads/773.pdf
Free download: Available
Page: 215-232
First Page: 215
Last Page: 232
Paper Type: Research Paper
Current Status: Published

Cite This Article:

Ebrahim M, Endris & Zhou Xiaoyan (2021). Managerial Ties and MNCs’ Performance in Ethiopia: The Moderating Effect of Institutional support. International Journal of Science and Business, 5(7), 215-232. doi: https://doi.org/10.5281/zenodo.4744587

Retrieved from https://ijsab.com/wp-content/uploads/773.pdf

 

About Author (s)

Ebrahim M, Endris (corresponding author), Business School: University of International Business and Economics (UIBE) Beijing, China. Email: ebabduaman2018@yahoo.com

 Zhou Xiaoyan, Professor in Management, School of Business, University of International Business and Economics (UIBE), Beijing, China.

 

 

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DOI: https://doi.org/10.5281/zenodo.4744587

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