Content area
Abstract
The harsh environment in developing countries has been blamed for limited foreign investments and foreign firms' poor market performance. Therefore, since the mid-1980s, economic development theorists have advised the government of developing countries to adopt market reform measures, in the hope that an attractive business environment could lead to better firm performance. Nigeria adopted the International Monetary Fund's Structural Adjustment Program in 1986. Its program has embodied the elimination of price controls, marketing boards, exchange rate restrictions, trade controls, and the privatization of state-owned industries. This program is reviewed, emphasizing how the changes in environment and corporate strategy brought by the program have affected market performance of local and foreign firms in Nigeria. Propositions are developed and an empirical study reports on the impact of the program on firm strategy and performance. Based on the study findings, public policy and managerial implications are presented.