Economic development, corporate governance, and firm performance in Sub-Saharan Africa

Isaac Luke Agonbire Atugeba () and Emmanuel Acquah-Sam ()

Modern Finance, 2025, vol. 3, issue 1, 67-90

Abstract: he study examines the impact of corporate governance on firm performance in five Sub-Saharan African countries, focusing on the role of economic development. The research uses a two-stage least squares (2SLS) regression approach to examine data from 309 publicly traded companies spanning the years 2016–2022. The study found that firms in upper-middle-income (UMI) countries outperform those in lower-middle-income (LMI) countries. Corporate governance positively influences firm performance in LMI countries but negatively affects it in UMI countries. The study further observed that economic development significantly impacts corporate governance-performance relationships in LMI countries compared to UMI countries. Policymakers, especially in UMI countries, are urged to re-assess their current institutional frameworks and consider reforms aimed at alleviating bureaucratic obstacles that impact businesses.

Keywords: economic development; Firm Value; corporate social responsibility; corporate governance; firm performance; 2SLS regression; multi-theoretical framework; Ghana; Kenya; Nigeria; Botswana; South Africa; Sub-Saharan Africa (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bdy:modfin:v:3:y:2025:i:1:p:67-90:id:243

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