Are Firms in Developing Countries in Spider Webs or Iron Cages? Geographic Traps and Firm Performance

We explore the question of whether a geographic context represents opportunity or threat using two competing theories — geography of opportunity and curse of geography — and multilevel techniques to analyze data from 366 firms in six African countries (and validated with 128 firms from 24 countries). We find that location (landlockedness and bad neighbors) relate negatively to both sales and net profit. Infrastructure, however, does not relate …