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* This paper examines the impact of environmental and firm strategy variables on market performance of foreign and domestic manufacturing firms in Nigeria. A survey of the chief executive officers of the top 200 manufacturing companies in Nigeria was conducted and information on the tripartite variables collected.
INTRODUCTION
It is no secret that businesses in developing countries have operated under harsh environmental circumstances. Such environments, previously characterized by high political risk, poor infrastructure, high trade barriers, and low growth rates are typically not conductive to increased investments and market performance 6, 27!. As a result, the harsh environment in developing countries has been blamed for limited foreign investments 2! and foreign firms' poor market performance 11!. Therefore, since the mid-1980s, economic development theorists have adivsed the governments of developing countries to adopt market reform measures 6, 25, 29!, in the hope that an attractive business environment could lead to better firm performance 11! and increased entry commitments 18, 20!.
Recently, stagnant economic growth rates, decreasing investment flows, and high debt burdens have forced many developing countries to sign on to the Structural Adjustment Program initiated by the International Monetary Fund (IMF) 34!. The IMF programs are controversial C45! and in some cases have been reluctantly accepted 9!. In fact, in some countries (e.g., Venezuela and Nigeria) there have been riots and civil protests of these programs 5!. For example, Nigeria, the second largest African economy after South Africa (in terms of GNP), has adopted the Structural Adjustment Program since 1986. Its program has embodied elimination of price controls, marketing boards, exchange rate restrictions, and trade controls 23! and privatization of state-owned industries 31!.
Although environmental changes are evident, it is not clear whether and how local and foreign firms have improved their market performance. This study attempts to fill this void by investigating the impact of environmental and firm strategy variables on market performance in light of current economic reform programs in Nigeria. This study provides insights on the role of free market policies on firm market performance in developing countries.
The relationships between environment, strategy, and performance have been discussed in many fields (e.g., organizational behavior, economics, marketing, and finance). Unfortunately, despite the extensive investigation of the variables in industrial countries, there...