Information provision by public authorities and business partners in Southeast Europe: Effects on firm performance

Abstract

Purpose – This study explores the role of local employees, external partners, and public authorities in supporting and providing information to foreign firms in the context of foreign investment in Southeast Europe (SEE), and the effects on foreign market success. Methodology – This quantitative study assessed the perception of managers of Austrian companies with business activities in SEE by applying ordinary regression analysis. The hypotheses are tested using survey data of 80 Austrian firms operating in SEE countries. Findings – Results indicate that information provision by external partners has a positive and significant influence on firm performance, while no significant relationship between information provision by public authorities and firm performance could be found. The results also show that proactivity of local employees facilitates information provision by external partners. Research limitations – The conclusions drawn are only preliminary as the study did not control for differences in information internalization, was focused on a narrow set of variables determining market performance, and did not control for cultural contingencies of the results. Practical implications – Western companies operating in the region have to recognize the importance of drawing on external information holders as well as the role of proactive employees in this process for market success.