Expatriate capabilities, knowledge transfer, competitive advantage and financial performance of foreign direct investments in the Ugandan service sector

Abstract

The purpose of the study was to establish the relationship between Expatriate Capabilities, Knowledge Transfer, Competitive Advantage and FDI Financial performance. The study adopted a cross sectional design which was quantitative and qualitative in nature. It involved descriptive and analytical research designs. The study sample comprised of 61 foreign registered firms in the sub sectors of telecommunication, financial services, trading and hospitality who were selected through stratified sampling. The data was tested for reliability, analysed using SPSS and results presented based on the study objectives. Results revealed positive and significant relationships between Expatriate Capabilities and Knowledge Transfer, Expatriate Capabilities and Competitive Advantage, Knowledge Transfer and Competitive Advantage and Competitive Advantage and FDI Financial performance which implies that when one variable is improved it leads to improvement of the other. In addition, expatriate capabilities are a better predictor of finacial performance followed by competitive advantage and lesser by knowledge transfer which implies that to improve on financial performance; emphasis should be put on improvement of capabilities followed by competitive advantage and lesser emphasis on knowledge transfer. The study recommended MNCs to send managers on expatriation assignments who are competent and willing to disseminate knowledge which will give them an edge over their competitors and thus result into better financial performance.