Corporate Strategy and Firm Performance : Case for the Multinational Banks in Sub Saharan Africa

Various studies have empirically examined the effect of corporate strategy on firm performance but not to the level of this paper's methodological scope regarding time, geographic, and variable constructs. To achieve external validity of research findings, this paper uses a more modern estimation procedure-the system Generalized Method of Moments GMM, on a panel data (2007-2017) for multinational banks in sub-Saharan Africa. It adopts a more relevant corporate strategy constructs for firms with operations in many environments. The paper investigates the role of corporate strategies: diversification, debt and equity financing on firm's performance as indicated by return on assets ROA. Key provoking question motivating this inquiry is: Does it profit a firm to have operations in many countries, or raising funds through debt and equity? Such corporate strategies are expected to have positive returns. Findings show that corporate strategy affects the performance of multinational banks. Specifically, unlike debt financing strategy, geographical diversification and equity financing positively affect bank profitability in terms of ROA. The underlying implication for researchers, investors and corporate managers is that corporate decisions regarding where to go for investment, and source of funds, should be well planned if banks are to be successful