Managerial Ties and MNCs’ Performance in Ethiopia: The Moderating Effect of Institutional support
Ebrahim Muhamed Endris & Zhou Xiaoyan
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.
|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|
|ISSN:||ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)|
|Date of Publication:||09/05/2021|
|Paper Type:||Research Paper|
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
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About Author (s)
Ebrahim M, Endris (corresponding author), Business School: University of International Business and Economics (UIBE) Beijing, China. Email: firstname.lastname@example.org
Zhou Xiaoyan, Professor in Management, School of Business, University of International Business and Economics (UIBE), Beijing, China.