Successful African Firms and Institutional Change (SAFIC)

Project summary

The project investigates how and why African firms are able to be successful in changing business and institutional environments. The project will identify strategies that lead to sustained firm performance and seek to explain these firms’ success by looking at the interface between firm internal factors (resources and capabilities) and firm external factors (market structures and institutions - formal and informal). In doing that, the project combines firm level theories with institutional and business environment theories, including state-business relation theory. The project combines quantitative methodology with detailed case studies in a country and sector comparative perspective in order to produce statistical and analytical generalizations. The knowledge generated will enable the development of our theoretical understanding of African firms, private sector development and economic growth. Identifying successful strategies is expected to inform current private sector development initiatives at the country and international level, thereby potentially contributing to economic growth and employment in the three countries. The project will contribute to the capacity building of the involved African universities among senior researchers and graduating five PhD scholars and 21 Master students in the field.

Outputs

Project Completion Report:

Knowledge: The project has enhanced the understanding of economic growth and employment through new knowledge on firm development in the African private sector in Tanzania, Kenya and Zambia. The project has influenced and qualified the international research agenda and the industry policy agenda on food processing in the involved countries.

Data collection: The mapping, surveys and qualitative interviews have led to a valuable data set, which did not exist prior to the project start.
Policy: Important stakeholders in Tanzania, Kenya and Zambia have been engaged and informed about the policy recommendations. This provides private sector organisations, international donor agencies, embassies, think tanks and researchers with valuable information on how to improve the business climate in the three countries.

Capacity development: Senior and junior researchers in Denmark and in the three Africa countries have had their capacity enhanced. The outputs has upgraded the CVs of the senior researchers involved. With the graduation of the five PhD Scholar, a new and upcoming generation of young scholars will have been established. The young cadre of researchers will drive the further development of the field in the future.

Good Story:

Getting insights into the very important food processing sector in Tanzania, Kenya and Zambia has provided valuable benefits in practice and in academia:

First of all, knowing more about what makes African owned firms in food processing more successful (or the opposite) is crucial to assist the firms in growing and creating much needed jobs in the three countries. The demand on organising substantial part of the domestic value chains is considerable and the management skills need to reflect this.

Secondly, the knowledge on food processing and whether to target large or small firms will assist the Ministry of Foreign Affairs and Danida in their private sector development efforts in the countries. While finance is important, the results show that focus on human and technical competencies is also very important.

Thirdly, the understanding of what is special about the African owned firms (like the level of diversification, the reliance on proper government policies, the need for enhancement of human and technical capacity) helps in further the academic knowledge in terms of changing the current research agenda into one which has more focus on the African perspective (compared to one from our part of the globe).

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