Role of reciprocity and innovativeness on performance in a developing context : Empirical evidence from Africa

Mlozi, Shogo and Pesämaa, Ossi and Jack, Sarah (2018) Role of reciprocity and innovativeness on performance in a developing context : Empirical evidence from Africa. African Journal of Science, Technology, Innovation and Development, 10 (1). pp. 69-84. ISSN 2042-1338

Abstract

Generally, investors tend to invest when likelihood of success is high. Many investors consider Africa as one market and neglect individual differences among African countries. Africa is mostly considered a high-risk market and conceptually innovativeness involves uncertainty, which precedes risk. However, it is known that when uncertainty is high there is a stronger correspondence between innovativeness and performance. As uncertainty is high in Africa, this paper claims that it is plausible to find correspondence between innovativeness and performance. This argument is developed since investors typically cope with uncertainty by networking on a reciprocal basis and preferring munificent markets. This link leads us to ask if innovativeness mediates the effect of relatively rich/poor environmental munificence and reciprocal exchange on performance in South Sudan (S. Sudan) and Tanzania. A tested model reveals that four components and an underlying 12 different observations are equivalent across both countries. Furthermore, a tested structural model confirms that the business logic of investors is quite different in S. Sudan and Tanzania. Innovativeness completely mediates effects of reciprocity and munificence on performance in Tanzania but not in S. Sudan. We found some support for the relationship between reciprocity and innovativeness but no support for munificence on innovativeness and performance.