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An Assessment of the Impact of Foreign Businesses on Financial Performance of Small and Medium Enterprises in Zambia: A Case of Chain Stores in Lusaka, Zambia

Author

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  • Judith Banda

    (University of Zambia, Zambia)

Abstract

This study assesses the impact of foreign businesses on the financial performance of small and medium enterprises in Zambia, focusing on SMEs operating near foreign chain stores in Lusaka. Using a mixed-methods approach grounded in positivist philosophy, the research examines exposure to foreign competition, financial implications, and strategies for improving SME competitiveness. Findings indicate that foreign business presence does not significantly affect SMEs’ short-term financial performance or profitability measures such as Return on Assets and Return on Equity, but it influences long-term growth prospects. The study further reveals negative effects on SMEs’ access to capital, technology, and trading infrastructure, and recommends policy interventions to support SME competitiveness, growth, and sustainability.

Suggested Citation

  • Judith Banda, 2026. "An Assessment of the Impact of Foreign Businesses on Financial Performance of Small and Medium Enterprises in Zambia: A Case of Chain Stores in Lusaka, Zambia," East African Finance Journal, East African Finance Journal, vol. 5(1).
    • Handle: RePEc:cwk:eafjke:2026-02
    DOI: 10.59413/eafj/v5.i1.2
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    References listed on IDEAS

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    1. Usman Bashir & Zaheer Abbas & Muntazir Hussain, 2014. "The Effect of Foreign Bank Presence on Domestic Banks Performance: An Evidence from a Developing Economy," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 2(2), pages 36-50, April.
    2. Francis Ziba & Mwanda Phiri, 2017. "The expansion of regional supermarket chains: Implications for local suppliers in Zambia," WIDER Working Paper Series 058, World Institute for Development Economic Research (UNU-WIDER).
    3. Francis Ziba & Mwanda Phiri, 2017. "The expansion of regional supermarket chains: Implications for local suppliers in Zambia," WIDER Working Paper Series wp-2017-58, World Institute for Development Economic Research (UNU-WIDER).
    4. Tongurai, Jittima & Vithessonthi, Chaiporn, 2022. "Learning, foreign operations and operating performance," Global Finance Journal, Elsevier, vol. 52(C).
    5. Emongor, Rosemary A. & Kirsten, Johann F., . "The impact of South African supermarkets on agricultural development in the SADC: a case study in Zambia, Namibia and Botswana," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(01), pages 1-25.
    6. Jeffrina Demberere & Richard Mwale Kasongo, Dr., 2021. "The Effectiveness Of Supply Chain Management Practices On Manufacturing Micro, Small And Medium Enterprises (Msme) In Lusaka: A Case Of Mandevu And Kalingalinga Markets," Global Journal of Purchasing and Procurement Management, IPRJB, vol. 1(1), pages 1-21.
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    Keywords

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    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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