| Summary: | 碩士 === 國立成功大學 === 國際經營管理研究所 === 106 === Whether country risks that emerge in Sub-Saharan Africa region affect the financial performance of foreign firms that formed international strategic alliances with local partners is a critical but underexplored question. To address this question, this study develops a framework that includes four predictors associated with country risks (namely corruption, inflation, regulatory quality, and peacefulness) and investigates how they affect the financial performance of foreign firms in the international strategic alliances.
The set of hypotheses were empirically tested using a sample of 144 foreign firms that formed strategic alliances with local firms in Sub-Saharan Africa between 2010 and 2016. Specifically, we found that corruption and inflation are negatively related with foreign firms’ financial performance. We also found that regulatory quality does not have an impact on foreign firms’ financial performance because the results are not statistically significant. Lastly, peacefulness is positively related with foreign firms’ financial performance.
This study concludes that country risks have a detrimental effect on financial performance of foreign partners that formed strategic alliances with local partners in Sub-Saharan Africa. The implications of our results are that managers should be aware of local country risks, and manage to influence local public policy makers to reduce the country risks that have a harmful impact on the financial performance of their firms.
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