Foreign Subsidiary Performance: Evidence from Ghana

Abstract

The objective of this study is to examine the influence of selected ownership, location, and internalization-specific factors on performance of foreign subsidiaries in Ghana. Our analysis was based on 75 manufacturing investments made by MNEs from different countries in 1994–2008. The results indicated that market size, host country experience, greenfield establishment mode, and joint venture ownership mode had positively impacted performance of foreign subsidiaries independent of the measure of performance. Furthermore, international experience and cultural distance had influenced performance when the total performance measure was used. Finally, the ownership mode significantly influenced performance only in greenfield investments, and not in acquisition mode.