Role of Formal and Informal Network in The Relationship Between Government Support And Ghanaian Indigenous Firms’ Degree of Internationalisation

Abstract

Purpose– This study aims to assess the potential mediating effects of formal and informal networks in the relationship between government support and Ghanaian indigenous firms’ degree of internationalisation. Design/methodology/approach– This study was a cross-sectional design, where the structured questionnaire was used in gathering data from 301 indigenous Ghanaian firms. The path estimation was conducted by running structural equation modelling in AMOSv.23. Findings– It was concluded that government support had a significant positive effect on Ghanaian indigenous firms’ degree of internationalisation. Formal network was found to partially mediate the relationship between government support and indigenous firms’ degree of internationalization. Finally, it was concluded that informal networks had no mediating effect. Research limitations/implications– One limitation is that the effect of the government support and network strategy was only explored on indigenous exporters, meaning that exporters which did not fall within the definition of indigenous firms were excluded from the study. Future studies could conduct a comparative study on the same variables, using indigenous and non-indigenous firms. Practical implications– It is recommended that Ghanaian exporters should participate in government training and workshop programmes focussing on building export business strategies and networking to improve export activities. Originality/value– This study’s unique contribution is its investigation of how networking portfolio, including formal and informal ties, helps explain the nexus between government support and the internationalisation of local firms in the developing market, such as Ghanaians.