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Political Instability, Corruption and Enterprise Performance Nexus: Lessons and Policy Implications for Some Selected African Countries

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  • Mulugeta Damie Watabaji
  • Arega Shumetie

Abstract

The aim of this study is to investigate the interactions among political instability, corruption and enterprise performance in some selected African countries. Survey data collected by the World Bank from 5,780 enterprises in 2013 and 3,616 enterprises in 2016 from some 18 African countries were used for this study. Descriptive statistics and econometric models were employed for data analysis. We found that covariates such as corruption, power outage, budget and time allotted for R&D, participation in foreign markets, and provision of formal training to employees showed greasing effects on the wheels of enterprise performance in Africa, due to poor functioning of the institutions. On the other hand, political instability and being confined to domestic markets have mediating sanding effects on enterprise performance. The originality and relevance of this study are based on its novelty to establishing a nexus among corruption, political instability and enterprise performance in African context based on survey data collected from 18 African countries and thus providing a new insight on the causal relationships among these key variables.

Suggested Citation

  • Mulugeta Damie Watabaji & Arega Shumetie, 2022. "Political Instability, Corruption and Enterprise Performance Nexus: Lessons and Policy Implications for Some Selected African Countries," Journal of African Business, Taylor & Francis Journals, vol. 23(4), pages 907-924, October.
    • Handle: RePEc:taf:wjabxx:v:23:y:2022:i:4:p:907-924
    DOI: 10.1080/15228916.2021.1962156
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