Article

Institutional Risk and Firm Performance in Africa: The Moderating Role of Corruption Control

Published in: Africa Journal of Management
Volume 4 , issue 4 , 2018 , pages: 401–425

DOI: 10.1080/23322373.2018.1522172

Author(s): David B. Zoogah Williams College of Business, USA

Keywords: institutional risks , multi-level , Africa , developing economies , firm performance

Abstract

How does institutional risk influence firm performance in Africa? While most studies focus on formal institutional risk, I argue that informal institutional risks are equally influential. Consistent with that view I use informal institutions theory and multilevel techniques to analyze data from 411 firms in 18 African countries. I find negative effects of informal institutional risks (socioeconomic conditions) on firm performance. In addition, I find interactive effects of control of corruption. I discuss the implications of the findings for research and practice.

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