Analyzing local content and in-country spending requirements to advance technology transfers and support entrepreneurial development in Ghana’s upstream petroleum sector

Frank Yao Gbadago ()
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Frank Yao Gbadago: Akenten Appiah-Menka University for Skills Training & Entrepreneurial Development

Palgrave Communications, 2025, vol. 12, issue 1, 1-16

Abstract: Abstract This study investigates the role of local content requirements (LCRs) and in-country spending mandates in fostering technology transfer, skills acquisition, and entrepreneurship development in Ghana’s upstream petroleum sector. Leveraging theories such as Grossman’s domestic content preference, resource dependency, linkage and spill-over effects, and social exchange, the research provides a comprehensive perspective on how local content policies can generate sustainable socio-economic benefits, extending beyond immediate fiscal gains. Through robust quantitative analysis, including factor analysis with high Cronbach’s alpha values (0.700 to 0.932) and composite reliability near 1, the study confirms the significant role of LCRs in driving collaborative engagements between foreign operators and local businesses. The findings underscore the efficacy of LCRs policies and partnerships in enhancing local business capacities, particularly through technology and knowledge transfers. However, the research also highlights gaps in policy enforcement and local capacity development, revealing limited impact of in-country production spending on entrepreneurial growth. This study makes a novel contribution by integrating multiple theoretical perspectives into a unified framework that explains the dynamics of LCRs impacts in the context of an emerging economy. The implications for policymakers include enhancing regulatory enforcement, fostering capacity-building programs, and incentivizing partnerships between foreign and local firms to boost local industry competitiveness. This study’s contributions to the field lie in providing a rigorous framework for assessing LCRs efficacy and offering actionable insights for maximizing the socio-economic impact of resource policies in petroleum-rich economies like Ghana. Future research directions include examining similar dynamics in other resource-driven sectors and exploring the long-term socio-economic impacts of LCRs, including job creation and poverty alleviation.

Date: 2025
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DOI: 10.1057/s41599-025-04549-w

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