Key Local Factors, Supplier and Linkage Effectiveness: Evidence from the Upstream Petroleum Sector of Ghana

Abstract

Highlights• Policy shifts necessary to help avoid resource curse and instead promote an industrialized base that supports procurement of inputs and service outsourcing opportunities to local entrepreneurs and firms within a host economy is observed among petroleum endowed developing nations.• The overall success of the policy is opined to be dependent on key local factors or absorptive capacity, local supplier effectiveness and local linkage development.• Conceptual model of key local factors, supplier effectiveness and local linkages effectiveness coupled with measurement items were developed based on social exchange, linkage and spill-over effect theories and prior literature.• Subsequently, the model was validated with primary data obtained in an online cross-sectional survey of upstream petroleum firms from Ghana, which was complemented with key informant interviews.• Significant impactful effects of key local factors and supplier effectiveness on local linkage development were observed for policy and management interventions.

Keywords: Key local factors, supplier effectiveness, local linkage factors' effectiveness, local content requirement, in-country spending