Dealer participation and dealer performance in Africa : moderating effects of institutional factors and firm features

Abstract

Emergent perspectives in international business highlight the value of partner participation. In the new, challenging African markets, explanations for how African domestic firms benefit from their participation with foreign partners remain underdeveloped. Using data collected from 176 African dealers of a particular Chinese motorcycle company in Sub-Saharan Africa, this study delineates and empirically tests (1) whether dealer participation fosters dealer performance and (2) how the effect of dealer participation changes with African institutions and organizational responses in Africa. This study finds that dealer participation is positively associated with dealer performance. Moreover, this positive effect is stronger when dealers operate in regions with relatively low government corruption and high government support. In addition, the positive relationship is weaker when domestic dealers use local tongue extensively, but becomes stronger when foreign suppliers adopt a high dealer coverage. This investigation validates the importance of arranging participative activities with matched institutional conditions and firm features to facilitate the creation of value for African domestic firms.