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Multinational Firm Growth and Sustainability Responses to Dynamics of Business Regulations in Host Market

Author

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  • Damto Basha Chewaka

    (Business School, Hohai University, Nanjing 211100, China
    Business and Economics College, Bule Hora University, Bule Hora 144, Ethiopia)

  • Changzheng Zhang

    (Business School, Hohai University, Nanjing 211100, China)

Abstract

Dynamics in business regulations measured by ease of doing business is a new approach that indicates countries’ business climate reforms toward suitability for investment growth. The present study took three variables from the ease of doing business data and evaluated them toward predictive power of FDI flow to 19 Sub-Saharan African countries by using fixed-effect model. Based on the analysis, the official time, procedures, costs, and minimum capitals in starting a business stage, enterprise registrations and official permissions of the firm establishment had a material effect on investment growth. Even though, on one side trade openness and the growing market size was seen as an opportunity, the deep-rooted corruption and landlocked was the trap for the smooth growth of firms in the region.

Suggested Citation

  • Damto Basha Chewaka & Changzheng Zhang, 2021. "Multinational Firm Growth and Sustainability Responses to Dynamics of Business Regulations in Host Market," Sustainability, MDPI, vol. 13(24), pages 1-15, December.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:24:p:13945-:d:704551
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    References listed on IDEAS

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    1. Simplice A. Asongu & Nicholas M. Odhiambo, 2019. "Challenges of Doing Business in Africa: A Systematic Review," Journal of African Business, Taylor & Francis Journals, vol. 20(2), pages 259-268, April.
    2. Treviño, Len J. & Mixon, Franklin G., 2004. "Strategic factors affecting foreign direct investment decisions by multi-national enterprises in Latin America," Journal of World Business, Elsevier, vol. 39(3), pages 233-243, August.
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    Cited by:

    1. Vanessa da Silva Mariotto Onody & Ana Catarina Gandra de Carvalho & Eduardo Polloni-Silva & Guilherme Augusto Roiz & Enzo Barberio Mariano & Daisy Aparecida Nascimento Rebelatto & Herick Fernando Mora, 2022. "Corruption and FDI in Brazil: Contesting the “Sand” or “Grease” Hypotheses," Sustainability, MDPI, vol. 14(10), pages 1-18, May.

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