ARTICLE TITLE PAGE:

Strategic Factors and Firm Performance in an Emerging Economy

What is the main purpose of the paper. Explain the main idea of the paper?
The mai n pur pos e of this paper is to indentify the strategic factors which influence
firm performance from Ghana (an emerging economy). Economies of emerging markets
(especially those in sub-Saharan Africa) hae lagged behind their counterparts in the
deeloped countries (e.g. the !SA" !#" $ Europe). %hile" it is argued that the problem
is partly caused by low skill leels and lack of technological capabilities among firms
from emerging economies (Teal" &''')" it is also contended that firm leel research"
which would facilitate efficient and effectie resource mobilisation" allocation and
utilisation as well as encourage firm growth and socio-economic
transformation" is lacking among these economies (Gran(r $ )saksson" *++,- Sousa et
al.,*++.).
What is the issue that makes the author conduct the study?
The issue is due to result of the lack of reliable data" systematic research that informs public
policy and practice from Ghana seems to be lacking. Although the %orld /ank0s surey
concerning Ghana0s manufacturing sub- sector has been aailable for some time now" yet little
is known as regards firm leel research and so policy formulation has been affected
e1ceedi ngl y.
What are the main variables explained by the author in the paper? Summarize
those variables.
Depended Variable - Firm Performance
The main ariables is a organisational or firm performance whereby the author choose
accounting measures (e.g.the money alue of 2perating 3rofit" 4eturn on 5apital
Employed642E" and 4eturn on Asset6 42A) because widely used.
Independent Variables
&) 7irm age 8 operationalised as the age of the firm since establishment-
*) 7irm si9e 8 operationalised as number of employees" categori9ed as micro" small and
medium-si9ed firms" with the micro firms considered as the reference group-
:) ;oint enture (7oreign ownership) 8 operationalised as a dummy ariable where
foreign participation (;<s) = &" otherwise wholly local = +-
Zainorin bin Ali
UUM Matric No: 95191
ARTICLE TITLE PAGE:
Strategic Factors and Firm Performance in an Emerging Economy
>) )ndustry" consisting of eight different sectors (i.e. machinery" furniture" metal"
chemicals" bakery" wood" garments and te1tiles) 8 operationalised as a categorical
ariable" using the garments sub-sector as a reference group-
?) 7irm location" consisting of Accra (capital of Ghana)" #umasi (regional capital of
Ghana)" Takoradi (regional capital of Ghana) and 5ape 5oast (regional capital of Ghana)
8 operationalised as a categorical ariable" using Accra as a reference group-
@) 3roductiity 8 log of productiity operationalised as output per employee.
How the authors conduct the study?
This study employs the %orld /ank data set relating to a panel of firms within the
Ghanaian manufacturing sector from &''& 8 *++*. /y pooling the data and setting 2AS
regression" the results of the study indicate that Boint enture (;<s) ownership predicts
significant performance compared with similar counterparts that are wholly indigenously
owned.
How many sample that he studied and what is the unit of analysis.
The %orld /ank0s data set was deried from the Ghanaian manufacturing sector oer the
course of a &*-year period" &''& 8 *++*. Si1 main rounds were employed to collect the
data. The composition of the sample is presented. The most highly represented firms
were medium-si9ed firms (@,.*C) with workforces numbering between :+ and ''. 7irms with
workforces numbering between @ and *' (i.e. small-si9ed firms) were the ne1t most highly
represented firms" at *>.:C. The least represented firms were the micro- si9ed firms with
workforce si9es of between & and ?- they constituted ..?C of the sample. %ith regard to
industrial representation" the garment sub-sector has the highest representation"
making up **.:@C of the sample. The furniture and metal sub-sectors came ne1t" both
representing *&.'?C of the sample" followed by the food processing (bakery) sub- sector"
which constituted '.,@C. The rest of the industries" in order of representation" were as followsD
wood sub-sector '.:?C" chemicals sub-sector @.'&C" te1tiles >.+,C and lastly the machinery
sub-sector" representing :.@@C of the sample. the maBority of the firms were located in
the Accra metropolitan area (i.e. the capital city of Ghana). 7irms located in Accra consisted
of ?..,@C of the sample. The rest of the firms were from the regional centres of Ghana"
outside Accra. 2f these :+.':C of the sample were located at #umasi" @.&'C of the sample
were located at Takoradi" whilst >.&*C were located on the 5ape 5oast.
Zainorin bin Ali
UUM Matric No: 95191
ARTICLE TITLE PAGE:
Strategic Factors and Firm Performance in an Emerging Economy
How do the author test his/her hypotheses.
The author use econometric model because of the structure of the data set" the data is
pooled and so an 2rdinary Aeast SEuare (2AS) estimator is applied. )n line with the pool
estimation method" the model is specified as follows.
And the hypothesis is analy9ed using a t-test tool
What are the findins of the study?
)n this study" notwithstanding the firm leel elements (firm measure and workforce
profit)" sort of industry and where a firm is placed were critical. 5oncerning firm
e1perience" the outcomes suggest that" new and more youthful firms" in distinguishment
of the challenges postured by their noelty" could at present position themseles with
added pugnacity from the begin of e1changing reEuest to contend side-by-side with their
more built partners. This is elucidated by the way that in todayFs globalised planet" in
iew of simple access to national and global business Eualified information taking after
the headways in coneyance and transportation adances" distinction in firm age canFt
drawback new and more youthful firms to a bigger degree.
What is your comment reardin the paper?
Strategic factors that e1plain firm performance in an emerging economy can be
consisting of both firm leel and e1ternal factors. )t is plausible therefore to argue that a
misfit between the e1ternal moderating factors and the firm leel factors could
affect the degree of firm performance. )n this study" in addition to the firm leel factors
(firm si9e and workforce productiity)" type of industry and where a firm is located were
significant. %ith regard to firm e1perience" the results imply that" new and younger
firms" in recognition of the challenges posed by their newness" could still position
themseles with e1tra aggression from the start of trading in order to compete side-by-
side with their more established counterparts.
Zainorin bin Ali
UUM Matric No: 95191