International ownership and SMEs in Middle Eastern and African economies

Empirical evidence on the benefits of international ownership for small and medium-sized enterprises (SMEs) financial performance is either not available for most African and Middle Eastern countries or presents mixed results. In this paper, we investigate this further by examining the effects of ownership structure on firm performance, using financial data covering SMEs in 60 African and Middle Eastern countries, for the years 2006–2015. Results from pooled ordinary least squares and random-effects estimations indicate that international ownership is significantly positively correlated with firm performance for (most of) Africa and the Middle East. Examining the interaction of international ownership with capital resources, we find that internationally owned firms do not use capital more efficiently than locally owned firms, implying that internationally owned firms use international resources—other than capital—more efficiently.