Driving MNE subsidiary performance in sub-Saharan Africa: Strategy, innovation, and environment

Abstract

Global strategic orientation (GSO) is noted as an important determinant of MNE subsidiary performance, yet the underlying mechanisms and environmental contingencies connecting GSO to the performance of MNE subsidiaries operating in developing economies remain understudied. Drawing on resource orchestration theory, this study theorizes that GSO dimensions – global mindset, growth orientation, and competition orientation – enhance performance through service innovation novelty under varying conditions of environmental turbulence. Analyzing two-phase survey data from 887 subsidiaries in 23 sub-Saharan African countries, we find that all GSO dimensions are positively associated with performance, with service innovation novelty serving as a key mediator. Unexpectedly, environmental turbulence attenuates the indirect effects of growth and competition orientations, while the global mindset’s effect remains robust. These findings refine international business theory by clarifying how service innovation and environmental factors serve as contingencies that explain the mechanisms and conditions under which MNE subsidiaries benefit from GSO in Sub-Saharan African markets.