Proceedings of Paris Economics, Finance and Business Conference
13 - 15 April 2015, Crowne Plaza Hotel Republique, Paris, France, ISBN: 978-1-922069-73-3
Understanding the Impact of Target Country Risk and
Institutional Structure on International Market Selection of
NPOs
Buddhika Sa
Despite the growth and importance of NPOs as international business actors,
internationalization of the nonprofit sector has been rarely studied. Therefore the
objective of the study is to expand the current knowledge by examining the impact of
target Country Risk and Institutional Structure on international market selection of NPOs.
The study examined 6624 decisions, taken by 32 non-profit MF organizations in
international context. Logistic regression was used to analyze data. Country risk and
institutional strength were used as indicators, each indicator was measured using two
different indices to increase the validity. Results revealed that NPO country selections are
influenced by the governance levels prevailing in target countries. Further it was identified
that NPOs select countries with higher risk profiles as well as countries with weaker
institutions. The study being one of the first covering large number of countries in a non
profit context, provides evidence that target country governance related factors affect
differently to the non-profit business model, thus emphasizing further, the need for more
studies in the area.
Key words: International Market Selection, Location Strategy, NPOs, Microfinance
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Buddhika SA, PhD Research Fellow, School of Business and Law, University of Agder, Norway,
Email: amila.b.sirisena@uia.no