Foreign Ownership and Firm Performance in Sub-Saharan Africa.
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Abstract
Our study investigates the effects of foreign ownership on firm performance with respect to profitability, productivity, export intensity, and skills acquisition in Sub-Saharan African (SSA) countries. This is particularly important given that in the last 3 decades, stock of FDI has increased over 20,000% in SSA countries. To achieve the objectives of this paper, we employed firm- and country-level data from the World Bank Enterprise Surveys and the World Bank Development Indicators respectively. Results of the least squares dummy variable (LSDV) and propensity score matching (PSM) estimations showed that foreign ownership was positively associated with higher levels of financial profitability, productivity, exports, and skilled labour acquisition. Policy implications were deduced from the findings.