The reciprocity objective! The economic business environment and transnational corporations loyalty to the host country in Tanzania

Rwamuhuru, Mshindi Andrew; Magai, Petro Sauti Article The reciprocity objective! The economic business environment and transnational corporations loyalty to the host country in Tanzania Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Rwamuhuru, Mshindi Andrew; Magai, Petro Sauti (2024) : The reciprocity objective! The economic business environment and transnational corporations loyalty to the host country in Tanzania, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-20, https://doi.org/10.1080/23311975.2024.2318808 This Version is available at: https://hdl.handle.net/10419/326094 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 The reciprocity objective! The economic business environment and transnational corporations loyalty to the host country in Tanzania Mshindi Andrew Rwamuhuru & Petro Sauti Magai To cite this article: Mshindi Andrew Rwamuhuru & Petro Sauti Magai (2024) The reciprocity objective! The economic business environment and transnational corporations loyalty to the host country in Tanzania, Cogent Business & Management, 11:1, 2318808, DOI: 10.1080/23311975.2024.2318808 To link to this article: https://doi.org/10.1080/23311975.2024.2318808 © 2024 The University of Dodoma Published online: 24 Feb 2024. Submit your article to this journal Article views: 804 View related articles View Crossmark data Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Marketing | research article Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2318808 The reciprocity objective! The economic business environment and transnational corporations loyalty to the host country in Tanzania Mshindi andrew rwamuhurua and Petro sauti Magaib ainternational Business Department of Business administration and Management, College of Business and economics, the university of Dodoma, tanzania; binternational trade and economics, international trade and economics Department of general Management, university of Dar es salaam Business school (uDBs) university of Dar es salaam, tanzania ABSTRACT Foreign companies, including transnational corporations (tncs), have shown disloyalty toward their hosts in sub-saharan africa by, among other things, scaling back strategic expansion plans, closing operations, and shifting income-generating activities to different countries. therefore, the current study examines the influence of the economic business environment on tncs’ loyalty in tanzania. Using a cross-sectional survey design, data was collected from 131 executives of tncs in tanzania. the measurement model was verified by confirmatory factor analysis. hypotheses were tested using hierarchical regression analysis. results indicate that through income level, saving rate, consumer confidence level, and employment rate, the economic business environment of the host country has a positive and significant influence on tnc loyalty towards the host country. the labor costs have a negative and significant influence on tnc loyalty. tnc loyalty, however, is not significantly influenced by interest rates or excise duty. the current investigation’s findings contribute to the theoretical concept of loyalty, close a gap in the literature, and make an effort to advance knowledge of the host nation’s economic business environment’s effect on tnc loyalty. Policymakers should ensure policies that elevate key aspects of the economic business environment, specifically high income, savings rates, consumer confidence, employment rates, and policies that lower labor costs. 1. Introduction Foreign investments globally excelled more than any other form of capital flow across national borders, reaching 1.5 trillion in 2019 before collapsing by 42% in 2020 due to the cOViD-19 pandemic (giroud & azémar, 2023; UnctaD, 2021). the developing economies have been strengthened by engaging in transnational corporations (tncs) and foreign direct investment (FDi) attractions (giroud & azémar, 2023; Pandya, 2016). in the presence of these tncs, the countries have experienced economic growth, employment creation, sectoral growth, competition, and proper utilization of resources (Magai, 2022). as of today, many countries are taking considerable initiatives and becoming more open to attract foreign firms, including tncs, by reducing restrictions, offering generous investment incentives, and adopting agreements with global and international organizations such as the World trade Organization (WtO), the international Monetary Fund (iMF), the World Bank (WB), bilateral investment agreements (Bias), preferential trade agreements (Ptas), and regional integration agreements (rias) (Pandya, 2016). therefore, the importance of tncs cannot be overlooked, particularly in low-income countries, including sub-saharan countries (Xiao & tian, 2023). Meanwhile, apart from the developing countries, studies have demonstrated that income-disadvantaged countries benefit even more from foreign investment overflows, including tnc income-generating activities conducted in the particular country where tncs are hosted (iršová & havránek, 2013; Xiao & tian, © 2024 the university of Dodoma CONTACT Mshindi andrew Rwamuhuru [email protected] international Business Department of Business administration and Management, College of economics and Business education, the university of Dodoma, tanzania. https://doi.org/10.1080/23311975.2024.2318808 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY received 31 May 2023 revised 27 October 2023 accepted 6 February 2024 REVIEWING EDITOR hamida skandrani, University of Manouba, the higher institute of accounting and Business administration, tunisia KEYWORDS economic business environment; transnational corporations; loyalty; reciprocity; host country; tanzania SUBJECTS economics; Political economy; Finance; Business, Management and accounting 2 M. a. rWaMUhUrU anD P. s. Magai 2023). therefore, in a low-income country like tanzania, continued tnc operations, which are equivalent to tnc loyalty, are crucial for economic development. in this regard, tnc business operations continuity implies establishing new investments, reinvesting earnings, and spreading beneficial recommendations about the host country opportunities and potentials to foreign and international investors is critical for tanzania’s economic prosperity. in order to attract, maintain, and sustain foreign companies as well as tncs, these countries must provide favorable business environments, specifically economic business environments, through reciprocity duties. Despite the fact that loyalty is well known and widely empirically examined, the concept of tnc loyalty to the host country is not documented in the literature (Jozef et al., 2019). Based on Jozef et al. (2019), tnc loyalty to the host country is conceptualized as the willingness of tnc, as the host country’s customer, to continue proprietorship activities with the host country that provides raw materials, resources, a substantial market, and avenues that facilitate economies of scale (Usmed et al., 2021). Whereas, tncs are explained by Finger and svarin (2018) as companies or corporations operating in more than one country rather than their home countries. in this view, host country means a foreign country where tncs conduct business operations, while home country is referred to as the country where a tnc business was born (Duan et al., 2022). in this regard, tncs are equipped with capital as well as goods and services, processes, trade names, marketing methods, knowledge, skills, technology, and most prominently, professional management. this implies that the tncs have golden chances, and substantial resources to move operations or income-generating activities to countries where they think there is a more favorable economic business environment and where they can make more profits (Finger & svarin, 2018; Medioli et al., 2023). Frankly speaking, in recent years, some countries in the sub-saharan economies, tanzania included, have shown disloyal behaviors such as the exodus of foreign firms and reductions in strategic expansion and growth plans (houreld etal., 2016; kagochi & Durmaz, 2018; ng’wanakilala, 2017). For example, tncs reinvested earnings in tanzania declined substantially between 2013 and 2022, by an average of almost 146.92% [tanzania investment centre (tic), 2018, 2023]. this behavior suggests limited levels of loyalty among tncs in tanzania. Meanwhile, studies (kahyarara, 2021; ngowi, 2018; toloui, 2023) have connected tncs disloyalty to the host country, tanzania, with low performance in terms of sales, revenues, profitability, market shares, effectiveness, and efficiency, which are influenced by the economic business environment. according to roche (2015), kahyarara (2021), and Medioli etal. (2023), to a large extent, interest rates, income, employment, labor costs, and consumer confidence level have been known as the main factors hindering tncs performance. that is to say, economic business environments define the degree of successful performance of foreign firms, tncs included (Farole et al., 2018). Despite the fact that the economic business environment influences tnc performance, there is no evidence that shows that tnc performance relates to tnc loyalty to the host country (Duan et al., 2022; Jozef et al., 2019). however, tnc disloyalty can be associated with boredom, raising costs of production, reduced profitability, and failure to attain planned tnc strategic goals (kahyarara, 2021; ngowi, 2018), caused by huge interest rate amounts and the highest costs of trading across borders in the eac region, among other things [World Bank (WB), 2019]. according to a study by ngowi (2018) and kahyarara (2021), the tanzanian economic business environment is known for its high unemployment rate, low saving rates, very low income level, unstable consumer confidence level, and frequent changes in government economic policies that often affect the tncs decisions and planning. On one side, Mehar (2022), khornen (2005), and Farole etal. (2018) established that a poor economic business environment negatively affects profitability, thus affecting reinvestment of earnings. according to Medioli et al. (2023), uncompetitive economic business environments lead to tncs income shifting to countries with competitive economic business environments. this implies that in an unfavorable host country’s economic and business environments, tncs think of moving resources to another country with favorable economic and commercial climates. On the other side, the good economic business environment of the host country may be expected to significantly influence tnc loyalty towards the host country through reciprocal obligations. this underlines the utter importance of creating and maintaining an attractive and conducive economic business environment as an indispensable component for receiving the benefits of tncs. With this reality, economic business environment conditions affect management decisions and planning and thus, the attainment of tnc performance goals (egbunike & Okerekeoti, 2018). this means that economic business cOgent BUsiness & ManageMent 3 environment is a core determinant for tnc business continuity, which equates to tnc loyalty to the host country. But, very little is known about tnc loyalty to the host country in the economic business environment perspective. Previous scholarly works have explored the effect of the host country’s economic business environment on the performance of tncs. For instance, egbunike and Okerekeoti (2018) found a positive and significant relationship between macroeconomic business environment factors and the financial performance of tncs. similarly, kahyarara (2021) showed that a better macroeconomic business environment leads to better performance for tnc firms. also, strauss et al. (2021) documented that improved economic business environments not only enhance better tnc performance in terms of revenues, return on investment, and profitability but also boost reinvestment of earnings in the host country. in addition, roche (2015) reported the adverse effect of higher taxes and unfair taxation on tncs corporate performance in the host country. Moreover, ta etal. (2021) and nazzal etal. (2023) found a strong relationship between economic business environment factors and tncs intentions toward investors. Meanwhile, Munyoro etal. (2016) indicated that the poor economic business environment of a host country increases the costs of production and discourages intra-trade transfers and cross-border trade, thereby affecting many regional market-oriented tncs (WB, 2020). likewise, Medioli et al. (2023) documented that unfavorable host country economic business environments offer an avenue for foreign firms to shift income generating activities to countries with competitive economic environments where they can immediately gain from their investments. Most of these studies have indicated that the host country’s economic business environment has a substantial influence on tnc performance (Mehar, 2022; rani & Zergaw, 2017). however, these studies did not demonstrate how the economic business environment can influence tnc loyalty towards the host country. nevertheless, the link between the economic business environment and tnc loyalty to the host country is not obvious, and it has not yet been empirically explored. notwithstanding, further studies such as akpoviroro and Owotutu (2018), Farole etal. (2018), khornen (2005), and Bontempo (2022) concentrated on examining the effect of the business environment on the performance of tncs in the host country. similarly, studies (commander & svejnar, 2011; Mwadime, 2020) reported a strong, positive, and significant relationship between the business environment and the performance of tncs. all these scholars’ works above found a significant relationship between the business environment and the performance of tncs. however, these studies were too wide in scope, as the concentration of the studies is all business environment components that include political, economic, socio-cultural, and technological business environments put together (Okechukwu & Okoronkwo, 2018). On the contrary, the current study focuses only on the economic business environment and tnc loyalty toward the host country. in summary, based on the argument above, the connection between the variables in the present study has not yet been empirically examined. Besides, the loyalty of tncs may be attributed to the dual embeddedness effect of host and home country, in the sense that tncs integrate into host-country society and keep economic and cultural bonds with their home country (Duan et al., 2022). this implies that tncs utilize their home country’s business environment while gaining access to valuable resources not available to their native-born country to enhance performance in the countries where they are hosted (colic-Peisker & Deng, 2019). For example, tncs obtain financial support from their home country’s banks when they fail to secure loans from their host country (Duan et al., 2021). Practically, considering dual embeddedness, tncs benefit from their dual business environments, particularly host-and-home country economic business environment situations (Brzozowski et al., 2017; Duan et al., 2022). thus, changes in the home country’s economic business environment may also affect their new investment decisions and reinvestment of earnings, and thus be likely to result in loyalty challenges in the host country (Duan etal., 2022). evidence demonstrates that host-and home-country markets are very crucial in tnc trade since any alterations in export and import policies, trade agreements, or taxation policies between host and home countries impact tncs business operations (Duan et al., 2022; Magai, 2022). however, despite the fact that, loyalty of tncs towards the host country may further be mediated by economic business factors of home countries, Farole etal. (2018) and international production theory (iPt) emphasize that the host country economic business environment plays a key role in determining tnc business success and continuity, which equates to tnc loyalty (Dunning, 2001) through the reciprocity process. Moreover, based on social exchange theory (set), if the host country makes available a conducive 4 M. a. rWaMUhUrU anD P. s. Magai economic business environment for the tnc, the tnc is more likely to behave favorably by being loyal to the host country through the reciprocity principle, regardless of the situation of the home country’s economic business environment (Blau, 1964; tegambwage & kasoga, 2022b). specifically, when the economic business environment in the host country is favorable, tncs become successful (kahyarara, 2021; Medioli et al., 2023; Oboreh & arukaroha, 2021). hence, tncs demonstrate loyal behaviors to the host country based on reciprocity principle because positive reciprocity encourages loyalty (tegambwage & kasoga, 2022b, 2022c). in summary, despite the fact that a number of previous studies have examined the relationship between economic business environment and performance, none of these studies examined tnc loyalty toward the host country from the perspective of the host country’s economic business environment. also, considering the reciprocity benefits, tnc loyalty is crucial to the objectives of both tnc and the host country, as tnc must become more profitable and accumulate wealth, and the host country must nurture and sustain its economy. therefore, the objective of the current investigation is to fill the gap by examining the influence of the host country’s economic business environment on tnc loyalty to the host country. this investigation is one of the first to explore tnc loyalty towards the host country from the viewpoint of the economic business environment of a country where tncs operate. the present study aims to make a number of contributions to the tnc loyalty literature. First, it strengthens the theoretical concept of loyalty by proposing and testing a model of tnc loyalty towards the host country, mostly in the context of the host country economic business environment. second, the study employs combinations of theories, including social exchange theory (set) and international production theory (iPt) to a proposed and tested model of tnc loyalty to the host country. third, this study fills the literature gap by linking the host country’s economic business environment and tnc loyalty towards the host country. Fourth, from a real-world perspective, the study will benefit host countries, mainly policymakers in low-income countries, by providing them with an understanding of the crucial differential contributions of the individual dimensions of the economic business environment on tnc loyalty. this will enable them to improve government policies and programs that capitalize on key economic business environment dimensions to attract tncs, stimulate, elevate, and sustain tnc loyalty for economic growth and development. Finally, the findings on tnc industry sector type and experience help practitioners (tncs and their investors) become familiar with the importance of the industry sector type to invest in and the duration of tnc years of operations in order to realize sufficient gain. in order to accomplish the objective of the current study, this investigation attempts to answer the following questions: 1. Does the economic business environment in which tncs operate affect tnc loyalty to the host country? 2. What are the differential effects of individual dimension(s) of the economic business environment on tnc loyalty to the host country? 3. What impact do the tnc internal specific advantageous factors exert on tnc loyalty through the host country economic business environment dimensions? 4. Do tnc internal-specific advantageous factors have a significant influence on tnc loyalty towards the host country? this study is organized into five sections: first, the introduction; second, the theoretical and literature review; third, the methodology; fourth, the results and discussion of findings; and lastly, the conclusion, recommendations, research limitations, and future study direction. 2. Literature review 2.1. Theoretical review 2.1.1. The international production theory the international production theory (iPt) of Dunning (1977) is engaged to enlighten tncs and their related facts regarding the location conditions of the host country, including the economic business cOgent BUsiness & ManageMent 5 environment, among others (Dunning & rugman, 1985; kimiagari et al., 2023). it explicitly explain three advantages, commonly known as ‘Oli’ for tncs to operate successful in foreign country, namely ownership advantage (O), location advantage (l) and internalization (i) (Dunning, 2001). according to Dunning (1977, 2001), these three advantages must be fulfilled for tnc to prosper in the host country. thus, iPt explains the driving force behind tncs involvement in cross-border business operations. it suggests that the foreign firm’s, tncs included, operations in the host country will be successful given that the economic business environment of the country where the foreign firm operates is favorable. the theory also informs the advantages of economic business environment factors that enhance the tnc’s performance, and access to restricted markets and investment incentives such as tax relief, easy raw material and other resource acquisition, and low economic and financial risk. Moreover, the iPt reveals the effects of macroeconomic policies such as monetary policy in facilitating tncs performance in terms of revenues, return on investments, return on assets, and profitability. With regard to this, iPt additionally informs this study by providing the dimensions of the economic business environment such as interest rate, income, saving rates, consumer confidence level, employment rate, labor costs, and taxes that influence tnc profitability and eventually tnc business continuity in tanzania (Dunning & rugman, 1985), which equates to tnc loyalty in a host country. in this perspective, foreign firms, including tncs, conduct business in countries where they feel they will achieve their set strategic financial and economic goals (Medioli etal., 2023) and hence business continuity (kimiagari et al., 2023; Magai, 2022), leading to loyalty toward the host country. Moreover, the iPt provides an explanation of the foreign firm’s internal advantageous factors, such as size, industry type, and experience of tncs in the host country. according to the iPt, these internal factors also play a significant role in influencing tncs performance. therefore, in this study, these factors are controlled in order to realize the effect of only the economic business environment on tnc loyalty. however, iPt does not demonstrate a clear link between economic business environment factors and tnc loyalty in a reciprocity duty. thus, the social exchange theory was beneficial in order to explain the link between economic business environment and tnc loyalty through reciprocity obligations. 2.1.2. The social exchange theory the social exchange theory (set) by Blau (1964) comprises economic and social relationships that happen when each party has something that the other party values. set explains social existence in economic and social terms when partners perceive the ‘rules of exchange’, which integrate the dual components of reciprocity and repayment (cropanzano & Mitchell, 2005). according to set, social exchange relationships arise from a sequence of reciprocal transactions between parties that produce a pattern of obligations toward one another (Blau, 1964). accordingly, the degree of commitment to the existing relationship is determined by the ongoing comparison of social and economic outcomes between a series of contacts between parties and alternatives (Blau, 1964). in other words, partners keep relationships because they expect benefits, which contain a sequence of exchanges that create commitments through reciprocal obligations. this suggests that any benefits gained create debts that can be comforted only by reciprocation. thus, parties continue being loyal to each other through the principle of reciprocity as long as they obtain both adequate economic and social incentives (tegambwage & kasoga, 2023). in agreement with set, if the host country make available conducive economic business environment for the tnc, the tnc is more likely to behave favorably by being loyal to the host countries (Blau, 1964; tegambwage & kasoga, 2022b). specifically, when tncs perceive that the host country has having their best interests at heart, by offering them a conducive economic business environment in all areas, including consistent and attractive economic policy that promote favorable bank interest rates, friendly excise duty, better income, and low labor costs, as well as, high saving rates, consumer confidence level, and sufficient employment opportunities. When economic business environment is favorable, tncs become successful (kahyarara, 2021; Oboreh & arukaroha, 2021), and hence demonstrate loyal behaviors to the host country through reciprocity principle. this is because positive reciprocity encourages loyalty (tegambwage & kasoga, 2022b, 2022c). therefore, the set is used in illuminating the proposed positive effect of economic business environment on tnc loyalty. 6 M. a. rWaMUhUrU anD P. s. Magai 2.2. Economic business environment according to khornen (2005) and Mwadime (2020), the economic business environment refers to external economic business environment operating factors that have an influence on the buying behaviors of consumers and businesses. these economic business factors were taxes, fees and charges, exchange rates, interest rates, income, saving rates, consumer confidence level, unemployment rate, labor costs, and excise duty. the economic business environment also comprises external business operating factors that describe economic variables and offer extensive opportunities for tnc businesses in the host country (kim et al., 2018). these factors have an impact on the tnc’s operations outcomes since they have cost implications on production, prices of supply, exports, and imports of goods (kahyarara, 2021). this implies that poor economic business environments result in higher costs of production, which lead to low profitability and eventually may lead to disloyal behaviors. in the tanzanian context, according to ngowi (2018) and kahyarara (2021), seven dimensions of the economic business environment affect the performance of tncs, namely, bank interest rates, excise duty, income, saving rates, consumer confidence level, employment rate, and labor costs. consequently, studies have described the tanzanian economic business environment as characterized by the risk of high bank interest rates, labor costs, and a low employment rate, as well as difficulty in accessing financial assistance, including bank credits [World Bank (WB), 2019; ngowi, 2018; toloui, 2023]. these authors have also attributed tanzania to having the highest costs of trading across borders in the region, unstable income, low savings rates, and a low consumer confidence level, among others. nevertheless, different regimes have been implementing varying measures to address the aforesaid challenges that lead to difficult management decisions and unsatisfactory performance of tncs in terms of sales, revenues, profitability, market share, and corporate image, among others (ngowi, 2018). this, in turn, might be the reason for the limited loyalty challenges among tncs in tanzania. however, there is no empirical evidence that performance failure of tncs in tanzania lead to tnc disloyalty. nevertheless, as said earlier, no prior research have attempted to examine the relationship between dimensions of economic business environment and tnc loyalty to the host country. thus, the current study aims at exploring the link between economic business environment and tnc loyalty to the host country in reciprocity obligations. 2.3. Hypothesis development Based on the literature arguments reviewed above, it is impetus to hypothesize that the host country’s economic business environment factors significantly affect tnc loyalty to the host country. however, as mentioned earlier, seven individual economic business environment factors influence tncs performance in tanzania, namely interest rate, excise duty, income level, saving rates, consumer confidence level, employment rate, and labor costs (kahyarara, 2021; ngowi, 2018). accordingly, these dimensions of the economic business environment are expected to influence tnc loyalty in tanzania. in addition, both coefficients and significance level of the hypotheses testing results for each dimension (p-value, p < 0.05) was used to confirm the hypotheses (cohen et al., 2018). in this regard, the research questions are answered, and hence, the present study objectives are achieved. thus, hypotheses of this study are stated as follow: 2.3.1. Interest rate according to Mwadime (2020), an interest rate is the entire amount an individual borrower is charged for borrowing money from a financial institution. it shows how much the cost of borrowing is (Mehar, 2022). according to Mehar (2022), a low interest rate improves tncs investments, significantly determines the performance of foreign firms, and boosts gross domestic product (gDP). empirical studies (for example, egbunike & Okerekeoti, 2018; Medioli et al., 2023), provide evidence that bank interest rates in a host country affect productive private sectors via the cost of debt and credit accessibility. Medioli et al. (2023) indicated that through monetary policy, among other things, credit issues such as interest rates and charges affect productivity, and thus the interest rates could affect tnc loyalty to the host country. Furthermore, Mehar (2018, 2022) and githaiga (2021) observed that commercial banks interests on the borrowed capital cOgent BUsiness & ManageMent 7 requirements of tncs are included in the production costs. Based on set, this implies that lower commercial banks interest rates improves the performance of tncs in countries where they operate, which in turn boost tnc loyalty level through reciprocity obligations. thus, the study hypothesizes that: h1: the interest rate has a positive and significant influence on tnc loyalty to the host country. 2.3.2. Excise duty according to the tanzania revenue authority (tra, 2023), excise duty is a tax charged on specific imports or locally manufactured goods and services. it is charged at varying rates based on the production within the country or sale of a good (Munyoro et al., 2016). in fact, excise duty seems to be a government mechanism for generating revenues from imports or exports of merchandise, and it significantly contributes to total revenues (Munyoro et al., 2016). however, sometimes, such excise duties can be higher, making the tnc-produced goods more costly (Mugano, 2015), causing low profitability. Weak excise duty practices in low-income host countries have a delicate and worsening domestic tax base that affects tnc performance (Brenton etal., 2011; hamilton, 2009). however, Munyoro etal. (2016) indicated that if excise duties are fair and simple, they play an important role in intra-trade transfers and cross-border trade since they discourage corruption and the smuggling of goods. Other studies (e.g. Mugano, 2015; Wilson etal., 2021) have demonstrated that fairness, clarity, and simple excise taxes save time and costs, enhance cross-border trade and intraregional transfers. in regard to reciprocity principle, friendly excise duty facilitate effectiveness in serving overseas and regional markets, and boost tnc profitability that is likely to elevate tnc loyalty level. thus, based on set, the current study assumes that: h2: excise duty has a positive and significant influence on tnc loyalty towards the host country 2.3.3. Income level according to githaiga (2021), income is referred to as an amount of money received by an individual, an entity, or any other business, generated especially on a regular basis for work or through investment. it is a sum of money, property, or other transfers of value received over a certain period of time in exchange for goods or services (egbunike & Okerekeoti, 2018). in income economies, Mehar (2022) established that strong economic countries have higher income levels. Mehar indicated that income economies are associated with levels of income for people and corporate income that can be retained and reinvested. this may suggest that an income level determines the continued investment level of foreign firms, including tncs, in the host country. With poor country economic situations, tncs corporate income may be adversely affected, which can affect tncs loyalty to the host country (githaiga, 2021). therefore, based on set, countries with favorable economic business environment in terms of high income levels are expected to enhance the performance of tncs (kahyarara, 2021; Oboreh & arukaroha, 2021), which in turn will lead to tnc loyalty through reciprocal obligations. thus, this study proposes that: h3: income level has a positive and significant influence on tnc loyalty to the host country 2.3.4. Saving rate the saving rate is described by Mehar (2022) as a share of disposable income that is not consumed in the final consumption expenditure. it can also be defined as household savings divided by disposable income (egbunike & Okerekeoti, 2018). Mehar (2022) also argued that improved income in the host country plays an important role in saving. nevertheless, egbunike and Okerekeoti (2018) reported a negative and significant effect of the saving rate on tncs profitability. however, Medioli et al. (2023) indicated that high-income economies boost saving rates, corporate retained earnings, investable funds in financial institutions, and inflows of foreign investment. this is to say, based on set, countries with high saving rate are expected to lead to better performance of tncs (Medioli etal., 2023), which in turn may lead to tnc loyalty through reciprocal obligations. thus, it can be hypothesized that: h4: saving rate has a positive and significant influence on tnc loyalty to the host country 14 M. a. rWaMUhUrU anD P. s. Magai business environment have a significant influence on tnc loyalty. specifically, the four dimensions of income level, saving rate, consumer confidence level, and employment rate exert a positive and significant influence on tnc loyalty based on set. Meanwhile, the findings suggest that high income levels, savings rates, consumer confidence levels, and employment rates boost tnc loyalty towards the host country. results indicated that labor costs have a negative and significant influence on tnc loyalty through reciprocal obligations. this implies that the higher the labor costs, the less loyalty tncs have. this can be attributable to the increase in the cost of production, hence the reduced profit. Meanwhile, these findings are consistent with those of ersin and karakeçe (2023), issah and antwi (2017) and Mwangi and Wekesa (2017), who found significant impacts of interest rates and employment rates on investment and firm performance in the host country. Besides, the differential influence of different dimensions of the economic business environment on tnc loyalty can be credited to the complex interplay of number of business environment factors such as host country regulatory conditions, stability of host national or regional markets, prospects of economic growth, as well as, alignment or not alignment of tnc goals and strategies (ersin & karakeçe, 2023). this implies that some dimensions of economic business environment are less relevant while others offer opportunities or challenges. Moreover, decisions of tncs about loyalty to the host country may further pivot on the capability to adapt to specific host country economic business environment conditions, which may lead to variations in the significance of these dimensions. likewise, these results suggest that the host country’s economic business environment significantly affects tncs strategies and decisions, which power tncs operations continuity in the host country (ersin & karakeçe, 2023; issah & antwi, 2017). Moreover, these findings are consistent with iPt theory, which argues that the host country’s economic business environment determines the prosperity of tncs, which is crucial for continued investments, reinvesting of earnings, and helpful recommendations in favor of the host country. Moreover, the results in table 4 disclose that employment rate is the super predictor of tnc loyalty in tanzania, followed by consumer confidence level, income level, and savings rate. this suggests that a high level of employment rate, consumer confidence level, income level, and saving rate are crucial for improving, maintaining, and sustaining tnc loyalty in tanzania under the reciprocity principle. in the same way, drawing on set, the better the host country’s economic business environment, the more profitable tncs are, and therefore, they continue operations, which equates to tnc loyalty to the host country through reciprocal obligations. hence, the study underlines the prominence of a relatively better economic business environment as a necessary component to sustain tnc loyalty. Furthermore, the results that tnc experience and industry type positively and significantly influence tnc loyalty (table 4), mean that many years of operation in a given host country of tnc and continuous improvement in specific industry sector policies, regulations, and guidelines boost tnc loyalty to the host country through reciprocity duties. tnc size has a positive and insignificant impact on tnc loyalty. this means that the size of the tncs influences tnc loyalty with minimal significance. however, narula Table 4. Direct effect on tnC loyalty. Model 1 Model 2 Measurement factors Coefficient std. err t-Value Coefficient std. err t-Value eBe1: interest Rate 0.028 0.112 0.25 0.072 0.111 0.65 eBe2: excise Duty 0.125 0.118 1.05 0.081 0.120 2.17 eBe3: income Level 0.208 0.147 1.41** 0.163 0.144 1.13** eBe4: saving Rate 0.195 0.137 1.42*** 0.129 0.136 0.95*** eBe5: Consumer Confidence Level 0.198 0.119 1.66*** 0.220 0.118 1.86** eBe6: employment Rate 0.252 0.116 2.18*** 0.270 0.113 1.27** eBe7: Labor Costs −0.233 0.084 −2.77*** −0.223 0.082 −2.76*** Years of operations (experience) 0.205 0.072 2.85*** industry sector type (tnC industry) 0.037 0.032 1.16** number of employees (tnC size) 0.081 0.090 0.9 R20.166 0.232 adjusted R20.118 0.168 F-statistics 5.1*** 6.9*** **p-value <0.05. ***p-value <0.001. cOgent BUsiness & ManageMent 15 and Pineli’s (2019) study established that some foreign firms maintain businesses in the country where they have subsidiaries because of high switching costs linked to the nature of the assets invested, e.g., high-value or physically large industrial equipment and buildings, and the risk of losing business licenses, trademarks, and other intangible assets acquired over a period of time to local firms. this implies that foreign firms, including tncs, may be loyal to the host country not because of favorable conditions in the host country’s economic business environment but because they lack other options other than continuing to operate in the already-destined country. 5. Conclusion and implications the study empirically explored the influence of the economic business environment on tnc loyalty to the host country. the results indicate that the economic business environment exerts a positive and significant influence on tnc loyalty through income level, saving rate, consumer confidence level, and employment rate. the labor cost has a negative and significant impact on tnc loyalty. however, the interest rate and excise duty have an insignificant influence on tnc loyalty. among all this study’s dimensions, the employment rate is the highest predictor of tnc loyalty, followed by the host country’s consumer confidence level, income level, and saving rate. this means that a high level of employment rate, consumer confidence level, income level, and saving rate are crucial for stimulating, building, and sustaining tnc loyalty to the host country, tanzania. hence, the achievement of sustainable economic growth. the current study’s results have important implications for academics as well as practitioners. For academics, the study builds up the theoretical concept of loyalty by proposing and testing a model of tnc loyalty to the host country by integrating set and iPt, specifically from the perspective of the economic business environment. no prior study has connected the host country’s economic business environment and tnc loyalty to the host country. Meanwhile, the findings of the current study have significant practical implications, as follows: First, tanzanian income levels can affect the pricing of products and the market segmentation strategies used by tncs. For example, luxury products may be more profitable for those with higher average incomes, while lower incomes may necessitate more cost-sensitive pricing. second, investment decisions can be impacted by the saving rate; a higher rate could point to a developing domestic financial services sector, while a lower rate might call for different tactics like credit-based sales. third, decisions about manufacturing and outsourcing can be influenced by labor costs, since lower labor costs could make tanzania a desirable place to produce, while higher labor costs might force tncs to automate processes or look into alternative markets. Fourth, product demand, marketing tactics, and the launch of new products can all be impacted by consumer confidence levels. While lower confidence may result in more cautious marketing and product development, higher confidence may stimulate spending and the launch of new items. lastly, a high employment rate may result in a competitive labor market, necessitating greater compensation packages to attract top talent. conversely, a low employment rate may offer a larger pool of possible employees. these factors might have an impact on recruitment and human resource tactics. in view of the practical implications, tncs can influence the economic business environment as a vital source of information to sharpen their strategies and shape decisions by, among other things: One is having close monitoring of economic business factors such as consumer confidence level, income level, labor costs, and employment rate, among others. two, fine-tune the pricing strategy and assess the feasibility of expanding into new market projects and ventures. three, be aware of the conditions of the host country’s local market, such as consumer behaviors, regulatory frameworks, and labor, among others. this provides an opportunity for tncs to modify goods, services, and distribution networks. lastly, utilize economic data to make investment risk and opportunity assessments that enable tncs make informed decisions on various business areas and optimize resource allocation. in actual fact, economic business environment serves as a compass that guides tncs in steering the complex global setting and making decisions that align long term objectives Overall, from a practical viewpoint, the study will benefit host countries, mainly policymakers in low-income countries, by providing them with knowledge of the differential contributions of individual dimensions of the economic business environment on tnc loyalty, enabling them to make policies 16 M. a. rWaMUhUrU anD P. s. Magai that concentrate on the main economic business dimensions to attract, retain, and sustain tncs for achieving economic development. More specifically, policymakers should ensure consistent policy addressing income-generating issues, strengthening savings habits, and a higher level of consumer confidence and employment in order to boost and sustain tnc loyalty. Moreover, based on the findings the government of tanzania may consider to collaborate with financial institutions to offer savings programs or credit facilities for encouraging consumers to save and invest; invest in quality local workforce development programs to improve labor skills and productivity and make a more skilled and competitive workforce that reduce labor costs for tncs in the long term; implement tnc satisfaction surveys and loyalty programs to gauge and improve tnc loyalty as well give incentives for new investments, reinvestments of earning, repeat business and positive recommendations in favor of a host country; encourage formation of strategic partnerships with local businesses and governments to gain support and insights into tnc operations and tnc preferences; maintain a close eye on tncs and tnc loyalty programs as the government identify successful approaches from other host countries and adapt them in tanzania. 5.1. Limitations and directions for future studies this study concentrated on the influence of the economic business environment on tnc loyalty. therefore, future research should examine the influence of other business environment dimensions (technological, social-cultural, and political) on tnc loyalty. this study was also restricted to seven economic business environment dimensions; future studies should focus on other dimensions such as taxes and fees, inflation rate, exchange rates, and unemployment rate, among others (islam, 2023). Moreover, the economic business environment is contextual in nature (Farole et al., 2018); hence, future research should confirm the proposed model in other countries, specifically low-income ones. in addition, the present study focused on the single host country economic business environment, neglecting the dual embeddedness effect of the home country’s economic business environment (Duan et al., 2022). Future research may attempt to examine tnc loyalty from a host-and-home economic business environment perspective based on reciprocity obligations in terms of dual entrepreneurial ecosystems (Duan etal., 2022). Finally, the bibliographic review, which could broaden insights and possibly introduce other variables to the model that previous works have not considered, was not conducted due to financial and time constraints. therefore, this study suggests future research consider a bibliographic review and the inclusion of other variables. Acknowledgements not applicable. Authors’ contributions Mar: conceptualization, writing, data analysis, and interpretation; PsM: editing and reviewing the manuscript. Disclosure statement no potential conflict of interest was reported by the author(s). About the authors Mshindi Andrew Rwamuhuru is PhD candidate at the University of Dodoma, Department of Business administration and Management, Dodoma, tanzania, his areas of expertise include international business, foreign direct investments (FDis) and international trade. Petro Sauti Magai is a senior lecturer in international trade and economics, University of Dar es salaam Business school, Department of general Management, Dar es salaam – tanzania. he is highly interested in the areas of trade and economics, business management, project management and foreign direct investments (FDis). cOgent BUsiness & ManageMent 17 ORCID Mshindi andrew rwamuhuru http://orcid.org/0009-0000-8995-3024 Petro sauti Magai http://orcid.org/0000-0002-5782-7063 References akpoviroro, k. s., & Owotutu, s. O. (2018). impact of external business environment on organizational performance. International Journal of Advance Research and Innovative Ideas in Education, 4(3), 1–21. alarcon, D., sanchez, J. a., & De Olavide, U. (2015). assessing convergent and discriminant validity in the aDhD-r iV rating scale: User-written commands for average Variance extracted (aVe), composite reliability (cr), and heterotrait-Monotrait ratio of correlations (htMt) in. Spanish STATA Meeting, 39, 1–39. Beladi, h., cheng, c., hu, M., & Yuan, Y. (2020). Unemployment governance, labour cost and earnings management: evidence from china. The World Economy, 43(10), 2526–2548. https://doi.org/10.1111/twec.12923 Blau, P. M. (1964). Exchange and power in social life. John Wiley and sons. Bontempo, P. c. (2022). countries’ governance and competitiveness: Business environment mediating effect. RAUSP Management Journal, 57(1), 49–64. https://doi.org/10.1108/raUsP-11-2020-0253 Brenton, P., saborowski, c., staritz, c., & Uexkull, V. e. (2011). Assessing the adjustment implications of trade policy changes using Trist (tariff reform impact simulation Tool). World Bank. https://doi.org/10.1017/s1474745610000509 Brzozowski, J., cucculelli, M., & surdej, a. (2017). the determinants of transnational entrepreneurship and transnational ties’ dynamics among immigrant entrepreneurs in ict sector in italy. International Migration, 55(3), 105–125. https://doi.org/10.1111/imig.12335 cameron, l. a. (1999). raising the stakes in the ultimatum game: experimental evidence from indonesia. Economic Inquiry, 37(1), 47–59. https://doi.org/10.1111/j.1465-7295.1999.tb01415.x cohen, l., Mannion, l., & Morrison, k. (2018). Research methods in education (8th ed.). routledge. colic-Peisker, V., & Deng, l. (2019). chinese business migrants in australia: Middle-class transnationalism and ‘dual embeddedness. Journal of Sociology, 55(2), 234–251. https://doi.org/10.1177/1440783319836281 commander, s., & svejnar, J. (2011). Business environment, exports, ownership, and firm performance. Review of Economics and Statistics, 93(1), 309–337. https://doi.org/10.1162/rest_a_00135 cooper, D. r., emory, c. W., & irwin, r. D. (1995). Business research methods. inc., chicago. cropanzano, r., & Mitchell, M. s. (2005). social exchange theory: an interdisciplinary review. Journal of Management, 31(6), 874–900. https://doi.org/10.1177/0149206305279602 Duan, c., kotey, B., & sandhu, k. (2021). the effects of cross-border e-commerce platforms on transnational digital entrepreneurship: case studies in the chinese immigrant community. Journal of Global Information Management,), 30(2), 1–19. https://doi.org/10.4018/JgiM.20220301.oa2 Duan, c., kotey, B., & sandhu, k. (2022). towards an analytical framework of dual entrepreneurial ecosystems and research agenda for transnational immigrant entrepreneurship. Int. Journal of International Migration and Integration, 23(2), 473–497. https://doi.org/10.1007/s12134-021-00847-9 Dunning, J. h. (1977). trade, location of economic activity and the Mne: a search for an eclectic approach. in The international allocation of economic activity: Proceedings of a Nobel symposium held at Stockholm. (pp. 395–418). Palgrave Macmillan Uk. Dunning, J. h. (2001). the eclectic (Oli) paradigm of international production: Past, present and future. International Journal of the Economics of Business, 8(2), 173–190. https://doi.org/10.1080/13571510110051441 Dunning, J. h., & rugman, a. M. (1985). the influence of hymer’s dissertation on the theory of foreign direct investment. The American Economic Review, 75(2), 228–232. https://www.jstor.org/stable/1805601 egbunike, c. F., & Okerekeoti, c. U. (2018). Macroeconomic factors, firm characteristics and financial performance: a study of selected quoted manufacturing firms in nigeria. Asian Journal of Accounting Research, 3(2), 142–168. https://ssrn.com/abstract=3090767 https://doi.org/10.1108/aJar-09-2018-0029 ersin, İ., & karakeçe, e. (2023). analysis of the effects of macroeconomic factors on entrepreneurship: an application on e7 countries. IGI Global, 643–659. https://doi.org/10.4018/978-1-6684-7460-0.ch035 Farole, t., hallak, i., harasztosi, P., & tan, s. W. (2018). Business Environment and Firm Performance in European Lagging Regions (December 18, 2017). World Bank Policy research Working Paper no. 8281, available at ssrn: https://ssrn. com/abstract=3090767 Finger, M., & svarin, D. (2018). Transnational corporations and the global environment. https://doi.org/10.1093/acrefore/9780190846626.013.489 Fornell, c., & larcker, D. F. (1981). evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104 giroud, a., & azémar, c. (2023). World investment report 2022: international tax reforms and sustainable investment: United nations conference on trade and Development. Geneva and New York, 219. isBn: 978-9211130492. https:// doi.org/10.1057/s42214-023-00148-1 githaiga, P. n. (2021). human capital, income diversification and bank performance: an empirical study of east african banks. Asian Journal of Accounting Research, 6(1), 95–108. https://doi.org/10.1108/aJar-06-2020-0041 18 M. a. rWaMUhUrU anD P. s. Magai hair, J. F., risher, J. J., sarstedt, M., & ringle, c. M. (2019). When to use and how to report the results of Pls-seM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/eBr-11-2018-0203 hamilton, a. (2009). Discussing Existing TRIST Tools for Twelve Developing Countries: Bolivia, Burundi, Ethiopia, Jordan, Kenya, Madagascar, Malawi, Mozambique, Nigeria, Seychelles. World Bank. houreld, k., Blair, e., & char, P. (2016). exclusive: Foreign firms hit by tax demands rethink tanzanian expansion, routers. available at: relocationafrica.com/foreign-firms-hit-tax-demands-rethink-tanzanian-expansion/ huang, X., & tarkom, a. (2022). labor investment efficiency and cash flow volatility. Finance Research Letters, 50, 103227. https://doi.org/10.1016/j.frl.2022.103227 hurley, a. e., scandura, t. a., schriesheim, c. a., Brannick, M. t., seers, a., Vandenberg, r. J., & Williams, l. J. (1997). exploratory and confirmatory factor analysis: guidelines, issues, and alternatives. Journal of Organizational Behavior, 18(6), 667–683. https://www.jstor.org/stable/3100253 https://doi.org/10.1002/(sici)1099-1379(199711)18:6<667: :aiD-JOB874>3.0.cO;2-t iršová, Z., & havránek, t. (2013). Determinants of horizontal spillovers from FDi: evidence from a large meta-analysis. Determinants of Horizontal Spillovers from FDI: Evidence from a Large Meta-Analysis’, 42, 1–15. https://doi.org/10.1016/j. worlddev.2012.07.001 islam, r. (2023). the impact of macroeconomic factors on profitability of commercial Bank in the Uk Md rakibul islam. International Journal for Multidisciplinary Research, 5(1), 1–19. issah, M., & antwi, s. (2017). role of macroeconomic variables on firms’ performance: evidence from the Uk. Cogent Economics & Finance, 5(1), 1–18. https://doi.org/10.1080/23322039.2017.1405581 Jozef, e., kumar, k. M., iranmanesh, M., & Foroughi, B. (2019). the effect of green shipping practices on multinational companies’ loyalty in Malaysia. The International Journal of Logistics Management, 30(4), 974–993. https://doi. org/10.1108/iJlM-01-2019-0005 kagochi, J., & Durmaz, n. (2018). assessing rtas inter-regional trade enhancement in sub-saharan africa. Cogent Economics & Finance, 6(1), 1482662. https://doi.org/10.1080/23322039.2018.1482662 kahyarara, g. (2021). Macroeconomic environment and firm level performance in tanzania. African Journal of Economic Review, 9(2), 223–237. khornen, k. (2005). Foreign direct investment in a changing political environment: Finnish investment decisions in South Korea, Doctoral thesis, acta University. http://urn.fi/Urn:isBn:951-791-973-5 kim, J., Zheng, t., & schrier, t. (2018). examining the relationship between the economic environment and restaurant merger and acquisition activities. International Journal of Contemporary Hospitality Management, 30(2), 1054–1071. https://doi.org/10.1108/iJchM-07-2016-0346 kimiagari, s., Mahbobi, M., & toolsee, t. (2023). attracting and retaining FDi: africa gas and oil sector. Resources Policy, 80, 103219. https://doi.org/10.1016/j.resourpol.2022.103219 lai, s., Wang, Q. s., Pi, s., & anderson, h. (2022). Does directors’ and officers’ liability insurance induce empire building? evidence from corporate labor investment. Pacific-Basin Finance Journal, 73(1), 101753. https://doi.org/10.1016/j. pacfin.2022.101753 Magai, P. s. (2022). trade and foreign direct investment in tanzania: Do they matter for economic growth? Tanzanian Economic Review, 11(2), 22–40. https://doi.org/10.56279/ter.v11i2.82 Medioli, a., azzali, s., & Mazza, t. (2023). high ownership concentration and income shifting in multinational groups. Management Research Review, 46(1), 82–99. https://doi.org/10.1108/Mrr-02-2021-0141 Mehar, M. a. (2022). role of monetary policy in economic growth and development: From theory to empirical evidences. Asian Journal of Economics and Banking, 7(1), 99–120. https://doi.org/10.1108/aJeB-12-2021-0148 Mehar, M. r. (2018). analysis of the capital structure and banks performance: evidence from Pakistan. Journal of Business & Financial Affairs, 7(2), 1–5. https://doi.org/10.4172/2167-0234.1000343 Mei, Y., liu, W., Wang, J., & Bentley, Y. (2022). shale gas development and regional economic growth: evidence from Fuling china. Energy, 239, 122254. https://doi.org/10.1016/j.energy.2021.122254 Mugano, g. (2015). The Impact of trade liberalisation on Zimbabwe Nelson Mandela. Metropolitan University, 27(2), 1–29. isBn 978-0-620-66504-9. Munyoro, g., chiinze, B., & Munyoro Dzapasi, Y. (2016). the role of customs and excise duties on small enterprises: a case study of women cross border traders. Africa Development and Resources Research Institute Journal, 25(103), 25–48. https://doi.org/10.55058/adrrij.v25i10.299 Mwadime, g. s. (2020). Macro environmental Factors and Performance of Multinational corporations in kenya. University of Nairobi. Doctoral dissertation. http://erepository.uonbi.ac.ke/handle/11295/153322 Mwangi, e. n., & Wekesa, s. (2017). influence of economic factors on organizational performance of airlines: a case study of kenya airways ltd. IOSR Journal of Humanities and Social Science, 22(05), 08–14. https://doi.org/10.9790/0837-2205050814 nazzal, a., sánchez-rebull, M. V., & niñerola, a. (2023). Foreign direct investment by multinational corporations in emerging economies: a comprehensive bibliometric analysis. International Journal of Emerging Markets, 1746–8809. https://doi.org/10.1108/iJOeM-12-2021-1878 ng’wanakilala, F. (2017). tanzania’s economic growth slowed by policy uncertainty, credit squeeze-World Bank, reuters, available at: https://www.reuters.com/article/tanzania-economy-idUsl3n1hJ3Pn ngowi, P. (2018). selected industrialization challenges in tanzania. https://www.thecitizen.co.tz/tanzania/news/- selected-industrialisation-challenges-in-tanzania-2657734 cOgent BUsiness & ManageMent 19 nowzohour, l., & stracca, l. (2020). More than a feeling: confidence, uncertainty, and macroeconomic fluctuations. Journal of Economic Surveys, 34(4), 691–726. https://doi.org/10.1111/joes.12354 Oboreh, l. e., & arukaroha, J. (2021). host country characteristics and performance of multinational companies. International Journal of Innovative Finance and Economics, 9(2), 117–128. OecD. (2023). Employment Rate (Indicator), https://doi.org/10.1787/1de68a9b-en(accessed on 31 January 2023). Oh, h., & Park, s. (2022). Does corporate governance affect labor investment efficiency? Sustainability, 14(8), 4599. https://doi.org/10.3390/su14084599 Okechukwu, e. U., & Okoronkwo, B. O. (2018). evaluation of technological environment on organizational performance among selected medium scale enterprise in enugu state. International Journal of Academic Research in Economics and Management Sciences, 7(3), 267–280. https://doi.org/10.6007/iJareMs/v7-i3/4754 Pandya, s. s. (2016). Political economy of foreign direct investment: globalized production in the twenty-first century. Annual Review of Political Science, 19(1), 455–475. https://doi.org/10.1146/annurev-polisci-051214-101237 Podsakoff, P. M., Mackenzie, s. B., lee, J.-Y., & Podsakoff, n. P. (2003). common method biases in behavioral research: a critical review of the literature and recommended remedies. The Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879 rani, D. M., & Zergaw, l. n. (2017). Bank specific, industry specific and macroeconomic determinants of bank profitability in ethiopia. International Journal of Advanced Research in Management and Social Sciences, 6(3), 74–96. roche, g. a. g. (2015). taxation and its negative impact on business investment activities. Economic History Year Book, 8(1), 1–10. saittakari, i., ritval, t., & Beugelsdijk, s. (2023). a review of location, politics, and the multinational corporation: Bringing political geography into international business. Journal of International Business Studies, (2023), 1–27. https://doi.org/10.1057/s41267-023-00601-6 saridakis, g., idris, B., hansen, J. M., & Dana, l. P. (2019). sMes’ internationalisation: When does innovation matter? Journal of Business Research, 96(1), 250–263. https://doi.org/10.1016/j.jbusres.2018.11.001 saunders, M., lewis, P., & thornhill, a. (2019). research Methods for Business students, 8th ed. Qualitative Market Research: An International Journal. seleman, M. (2019). Policy Brief: how to reduce youth unemployment in tanzania. snijders, t., & Bosker, r. (2012). Multilevel analysis. An Introduction to basic and advanced multilevel model. sage Publications asia-Pacific Pte ltd. isBn 978-1-84920-200-8 strauss, t. h., koenig, c., Mikic, M., Proksch, m., & Duval, Y. (2021). asia-Pacific trade and investment: Foreign direct investments trends and outlook. Un. Published by Economic and Social Commission for Asia and the Pacific (ESCAP), 21(1), 1–36. sumarlinah, Y., sukesi, s., & sugiyanto, s. (2022). The role of digital marketing, service quality, product quality on purchasing power through the satisfaction of Probolinggo followers during the Covid-19, https://doi.org/10.32535/ijabim.v7i1.1444 swoboda, B., & hirschmann, J. (2016). Does being perceived as global pay off? an analysis of leading foreign and domestic Mncs in india, Japan, and the United states. american Marketing association. Journal of International Marketing. https://doi.org/10.1509/jim.15.00 ta, V. l., DO, a. D., Phan, t. U., nguyen, Q. h., nguyen, t. t. h., le, t. D., & nguyen, t. P. (2021). Factors affecting FDi intentions of investors: empirical evidence from provincial-level data in Vietnam. The Journal of Asian Finance, Economics and Business, 8(4), 125–134. tanzania revenue authority (tra). (2023). excise Duty. taxpayer Portal. https://www.tra.go.tz/index.php/excise-duty taylor, g., al-hadi, a., richardson, g., alfarhan, U., & al-Yahyaee, k. (2019). is there a relation between labor investment inefficiency and corporate tax avoidance? Economic Modelling, 82(1), 185–201. https://doi.org/10.1016/j.econmod.2019.01.006 tegambwage, a. g., & kasoga, P. s. (2022a). antecedents of customer loyalty in islamic banking: evidence from tanzania. Journal of Islamic Accounting and Business Research, 13(4), 701–713. https://doi.org/10.1108/JiaBr-10-2021-0288 tegambwage, a. g., & kasoga, P. s. (2022b). relationship quality and customer loyalty in the tanzanian microfinance sector. Journal of Financial Services Marketing, https://doi.org/10.1057/s41264-022-00191-8 tegambwage, a. g., & kasoga, P. s. (2022c). loan repayment among group borrowers in tanzania: the role of relationship quality. Future Business Journal, 8(1), 1–11. https://doi.org/10.1186/s43093-022-00151-7 tegambwage, a. g., & kasoga, P. s. (2023). Determinants of customer loyalty in islamic banking: the role of religiosity. Journal of Islamic Marketing, 14(12), 3150–3167. https://doi.org/10.1108/JiMa-12-2021-0396 thomas, J. J. (2023). employment growth and industrial Policy: the challenge for indian states. The Indian. The Indian Journal of Labour Economics, 66(1), 113–129. https://doi.org/10.1007/s41027-022-00423-4 tic. (2018). Tanzania investment report 2018: Foreign private investments, tanzania investment centre, tanzania, available at: https://www.bot.go.tz/Publications/Other/tanzania%20investment/en/020021122482283199.pdf tic. (2023). Tanzania investment report 2023: Foreign private investments, tanzania investment centre, tanzania, available at: https://www.nbs.go.tz/nbs/takwimu/tourism/tanzania_investment_report_2022.pdf toloui, r. (2023). tanzania investment climate: Openness to, and restrictions upon, foreign investment, U.s embassy in tanzania, available at: https://www.state.gov/reports/2023-investment-climate-statements/tanzania/ UnctaD. (2021). World investment report, 2021. investing in sustainable recovery. available at: https://investmentpolicy. unctad.org/publications/1249/world-investment-report-2021–investing-in-sustainable-recovery 20 M. a. rWaMUhUrU anD P. s. Magai Usmed, D. U., Yuliani, F., & hidayat, t. (2021). customer loyalty research: the cases of existing e-commerce platforms enrichment. Journal of Management, 12(1), 499–504. https://doi.org/10.35335/enrichment.v12i1.253 Wilson, l. B., Pryce, r., angus, c., hiscock, r., Brennan, a., & gillespie, D. (2021). the effect of alcohol tax changes on retail prices: how do on trade alcohol retailers pass through tax changes to consumers? The European Journal of Health Economics: HEPAC: Health Economics in Prevention and Care, 22(3), 381–392. https://doi.org/10.1007/ s10198-020-01261-1 World Bank. (2019). Doing Business Report 2019: Training for reform profile for East Community. World Bank. available at: https://www.doingbusiness.org/content/dam/doingBusiness/media/annualreports/english/DB2019-report_webversion.pdf Xiao, s., & tian, X. (2023). Performance feedback and location choice of foreign direct investment. International Business Review, 32(4), 102104. https://doi.org/10.1016/j.ibusrev.2023.102104 Zhu, Y., Bashir, s., & Marie, M. (2022). assessing the relationship between poverty and economic growth: Does sustainable development goal can be achieved? Environmental Science and Pollution Research International, 29(19), 27613–27623. https://doi.org/10.1007/s11356-021-18240-5