The influence of macro economic indicators on the performance of island based firms

Macroeconomic indicators (MEI) determine the performance of firms. It is often theorized that scaling beyond the domestic market allows firms to circumvent the effects of MEI, such as interest rates, economic growth, etc. Seldomly, however, it is possible to concretely isolate this link because it has been accepted that regional forces can be equally (if not more) determining in firm performance. Therefore, studying these linkages in spaces with less distance between national and regional forces is necessary. Islands are such spaces that have been neglected in international business scholarship and require more attention. MEIs are expected to be more pronounced in small islands and may be dominated by the concentration and reach of public administration. The study relating to islands identifies surprising findings that go against established theories. This novelty signals the need to pay more attention to studies that aim to determine to what extent firms engaged in international entrepreneurship perform against domestically oriented firms. This study examines 253 firms located in ten islands, the Bahamas, Bahrain, Barbados, Cyprus, Iceland, Fiji, Guyana, Jamaica, Malta, Mauritius, and Trinidad & Tobago over the 2009-2023 period, to determine to what extent MEIs influence firm performance. The study employs the Fragile State Index and MEIs as determinants of performance--ROA and ROE.