FDI inflow activities in Ghana promote economic growth and development, also, boosts capital formation, and enhance the quality of capital stock in the country. Studies show FDI inflow activities into Ghana predominantly come from China, the USA, India, and South Africa which contributes more to the Agriculture, Manufacturing, Building/Construction, and Service sectors of Ghana [22]. All this diverse inflow of funds impacts different sectors of the economy but in the long run, creates jobs and contributes to economic growth. In the agriculture sector, for instance, FDI involvement has reduced unemployment and augmented the production of primary products for local consumption as well as exports which have positively influenced the economic growth of Ghana [21]. The financial sector also received a lot of improvement in services by the influx of foreign banks and this created a platform for local Banks to mimic, at the end, FDI positively influenced the profitability of commercial banks in Ghana [23]. Literature attests to the fact that FDI impacts the nation Ghana positively and adds to the economic growth and social well-being of its populist. The question, therefore, is what influences FDI inflow activities into Ghana? Most research points to variables like tax incentives, exchange rates, labor cost, and political stability among others.

The factors motivating massive investment (FDI) in countries might not necessarily differ in entirety as one move from one region to the other and especially when countries are in the same economic zone. In support, factors influencing FDI in Bangladesh and Malaysia are similar to those in Ethiopia. FDI inflow activities in Bangladesh from 2000 to 2014 had a positive correlation with the GDP, Inflation, Infrastructure, Labor cost productivity, Trade openness, and Trade performance [24]. And on the other hand, Ali [25] investigates the significant motives of inward FDI to Ethiopia from 1992-2015 and concludes there is a positive and significant relationship between FDI and market size, trade openness, exchange rate, and financial freedom. Again, in Malaysia exchange rates, gross domestic product, broadest money supply, and trade openness had a positive impact on FDI inflow activities [26]. In Ghana, however, the regulatory framework for FDI operations and other government policies are believed to play a significant role in FDI inflow activities [27]. Studies also show both long and short-run existence of significant negative effects of inflation rate, exchange rate and interest rate on FDI operations in Ghana, however gross domestic product (GDP), electricity production, and telephone usage had a positive effect on FDI [5].

Other findings suggest infrastructural development and natural resources as key drivers or indicators of FDI inflow activities in Ghana, other variables like the lending interest rate, market size, and GDP growth rate also significantly influence FDI inflow activities in Ghana [28]. Corporate tax was also found to have a significant negative impact on FDI inflow activities in Ghana in the short-run but it turns to positively influence FDI inflow activities in the long-run [9]. Population health, a factor neglected by most researchers to ascertain whether it significantly influence FDI inflow activities. The study is the first to employ infant mortality rate, under-five mortality rate, and death rate in examining the effect of population health on FDI inflow activities. It however documents that population health significantly influences FDI inflow activities to Ghana [29]. In summary, factors influencing FDI inflow activities in Ghana include market size, government regulations, natural resources, population health, infrastructure, exchange and interest rates, etc.

It is documented, the role SMEs play in the various countries they situated by reducing unemployment and adding to Gross Domestic Product (GDP) [30] [31]. In most countries, SMEs are believed to contribute about 50% of GDP [32]. The operations of these SMEs are however always under pressure either from internal or external factors like FDI. Because most SMEs might not be able to compete with these MNCs, our argument is for them to foster a link or collaboration through which knowledge and technical know-how could be easily transferred. This is one way or the other will help to employ new technology and way of doing things that will be more profitable as well as environmentally friendly. Sustainability-oriented innovation, which shows an objective to cultivate a product or service that bestows social, economic, and environmental sustainability, has gained growing institutional and academic attention, for the reason that innovation is an indispensable part of accomplishing sustainability [33]. For this reason, governments across the globe have been dedicated to sustainable or maintainable development as a policy goal. This has been buttressed by a lot of new ideas and policies extending from international agreements to national policy frameworks, environmental laws, regional programs, and local strategies [34]. In light of this, Sarkodie and Strezov [35] suggest that FDI inflow activities with modernized clean technological transfer and enhancement in labor and environmental management practices could assist emerging economies to realize sustainable development goals. The question then, is, do FDI inflow activities contribute positively or negatively to the sustainability of these SMEs operations as well as the environment in which they operate?

As stated earlier, a way out of the friction between SMEs and FDIs concerning market space and sustainable economic, social and environmental well-being is through collaborations, mergers. Havierniková and Kordoš [36] argues that one form of contemporary entrepreneurship that could assist SMEs’ sustainability in the environment in which they operate is cluster cooperation. This type of entrepreneurship brings many positive effects. The power of collaborations influences not just the operations of both businesses but it gives room for best practices to be learned and shared among participants. In Nigeria for instance, Babatunde et al. [37] found improvement in labor quality as a result of FDI inflow activities to the nation which in the long-run positively influenced GDP. It is also important to note that, technology transfer between FDI firms and young SMEs, direct linkages, and the interactions between them cause SMEs to conduct R&D strategies in the supply chain which is obtained through direct transfer of technology between connected firms [38]. Knowledge transfer is an important component to factor into the link between FDI and host SMEs. However, in many cases, there are hindrances to the effective transfer of technology and knowledge. Pham and Dinh [32] analyzed the linkage with FDI and SME operations in Vietnam and how effective knowledge is being transferred from the collaborations.

Findings point to the fact that three factors had a significant impact on the effectiveness of knowledge transfer, including the Language ability of foreign managers, Cultural openness, and Communication distance. These factors when managed well positively impact the transfer of knowledge. In Macao, the emergence of investments by MNCs brought favorable and unfavorable effects to local SMEs. Host SMEs were challenged in terms of employing and retaining human resources, given the eye-catching salaries and benefits, and training offered by MNCs. The solution adopted for SMEs sustainability, however, was collaborating with MNCs as it serves as important partners in networking [39]. This re-affirms the point that the internationalization process and enterprise networks are positively related to refining corporate sustainability, which promotes labor productivity [40]. Does an increase in FDI significantly mean an increase in economic or social sustainability? Bokpin [41] researches foreign direct investment and environmental sustainability in Africa and concludes that an increase in FDI inflow activities significantly increases environmental degradation and recommends governments in African to develop tighter policies and measures to curb the problem. The decline of carbon dioxide emissions in developed countries can be attributed to a paradigm shift and structural change from high-energy intensive and carbon-intensive industries to services and information-intensive industries.

The increasing levels of carbon dioxide emissions in developing and least developing countries can be attributed to the economy driven by agriculture, transport, and services [35]. It has also been documented that an increase in FDI operations and industrialization had a positive and significant effect on CO₂ emissions in the host country [42]. In Ghana, for instance, the operations of FDI have been increasing for the last decade but its effect on energy consumption is nothing to write home about. Results from research by Amoako and Insaidoo [43] suggest that energy-saving benefits from FDI operations are yet to be realized in Ghana as an increase in FDI increases the energy consumption of the nation. With all this being said, FDI has been documented to positively impact clean water infrastructure, sanitation, and renewable energy [44]. In India, a 1% increase in FDI results in a 0.013% reduction in energy use. The adoption of energy-efficient techniques through FDI has been essential for reducing carbon emissions in India [45]. These are not realized yet in most African countries, it is like that such collaborations are underway if not already in inception.

Value co-creation is a deliberate act to create value in terms of products, services, or processes by engaging actors within a specific ecosystem [19]. It is a manner of business strategy which focuses on the generation and ongoing realization of mutual organization-customer value [46]. This is closely related to supply chain integration because in both cases a firm needs to open up to external collaborators [47]. While these two strategies have varying end-products, we expect SMEs engaged in supply chain integration to participate in interfirm value co-creation. This is supply chain integration creates a platform for interfirm value co-creation to thrive without extra cost [48]. Nonetheless, these strategic decisions could be driven by stakeholder pressure or the innovative capabilities of the firm [49] [50]. In a typical value co-creation ecosystem, members can take different forms; the idea generator, the designer, and or an intermediary to create value for all parties involved [51]. Similar to supply chain integration, the issue of transparency is coming up and members within the partnership are required to clearly define their roles, their identity as well as their potential contribution to the partnership [52]. Value co-creation comes in two main categories; business-to-customer platforms where co-creation activities mainly involve the business and both existing and potential customers, a business-to-to business where business within the same industry or different industry co-create value for their mutual gains [47]. Early studies paid much attention to business-to-customer platforms making studies on business-to-business value co-creation under-studied [52]. Previously organizations competed for resources, customers, and market share with little concern for collaboration. However, the current trend favors healthy competition and collaboration within an ecosystem with the aim of sustainable growth [19]. Organizations need to align promptly in a value co-creation partnership to take advantage of the integration of the resources to benefit from the partnership [51]. Value co-creation is proven to affect organizations’ performance in areas such as cost savings, efficient use of resources, and efficient marketing in terms of compliment-complementary and services.

Figure 1 depicts the expected relationships between the variables. Considering the topic under discussion, the research conceptual model was constructed following relevant literature which is illustrated in Figure 1. The figure depicts the expected affiliations between FDI inflow activities, environmental sustainability, economic sustainability, and social sustainability.

FDI inflow activities are evidenced to promote economic development, human capital development, and technology import [10] [11]. However, foreign-businesses seeking to operate in other economies must follow specific guidelines. Consequently, studies find a positive relationship between FDI inflow activities and environmental sustainability [26]. This is because these businesses are mandated to adopt sustainable resource usage. Therefore, we theorize that FDI inflow activities in Ghana would influence the decisions of domestic SMEs to follow the best environmental sustainability guidelines. Further, studies confirm a positive relationship between FDI inflow activities and economic sustainability [40]. This is because of the use of modern methods, processes, and equipment. Therefore, we posit that the increase in FDI inflow activities in Ghana would promote the economic sustainability of Ghanaian SMEs. This is because domestic SMEs are expected to learn from the best practices of these firms. Again, per literature, FDI inflow activities promote social sustainability [36]. Therefore, we propose that the increase in FDI inflow activities in Ghana would promote social sustainability decisions in Ghanaian SMEs. This is because foreign companies are expected to have the best human resource practices which intend would influence domestic businesses.

H1a: FDI inflow activities positively affect Ghanaian SMEs’ environmental sustainability decisions.

H1b: FDI inflow activities positively increases the economic sustainability decision of Ghanaian SMEs.

H1c: FDI inflow activities positively increases the social sustainability decision of Ghanaian SMEs.

Interfirm value co-creation is a conscious effort by two or more businesses to create products or services via innovation to increase profitability [50]. Literature suggests that an increase in FDI inflow activities promotes interfirm value co-creation between foreign-owned businesses and domestic businesses [38]. Consequently, we expect an increase in FDI inflow activities in Ghana to promote interfirm value co-creation decisions of the Ghanaian SMEs. Further, interfirm value co-creation is theorized to increase firm performance [49]. Therefore, we expect the interfirm value co-creation decisions to increase environmental sustainability, economic sustainability, and social sustainability decisions in Ghanaian SMEs.

H2a: FDI inflow activities positively affect interfirm-value co-creation decision in Ghanaian SMEs

H2b: Interfirm value co-creation positively increases Ghanaian SMEs environmental sustainability decision

H2c: Interfirm value co-creation positively increases the economic sustainability decision of Ghanaian SMEs

H2d: Interfirm value co-creation positively increases the social sustainability decision of Ghanaian SMEs

Given the established relationships between FDI inflow activities and interfirm value co-creation decisions [38] and FDI inflow activities and firm performance [39], theorize that the expected relationship between FDI inflow activities and firm performance would be improved when domestic firms engage in interfirm value co-creation with foreign-owned companies. Consequently, we propose that interfirm value co-creation decisions mediate the positive relationship between FDI inflow activities and environmental sustainability, economic sustainability, and social sustainability decisions in Ghanaian SMEs.

H3a: Interfirm value co-creation decision mediates the positive relationship between FDI inflow activities and SMEs’ environmental sustainability decision.

H3b: Interfirm value co-creation decision mediates the positive relationship between FDI inflow activities and SMEs’ economic sustainability decision.

H3c: Interfirm value co-creation decision mediates the positive relationship between FDI inflow activities and SMEs’ social sustainability decision.

The study explores the relationship between foreign direct investment and SMEs’ strategic decisions in Ghana as well as the mediating role of interfirm value co-creation decisions. The study is quantitative with supporting world development index (WDI) and survey data from SMEs in Ghana. Currently, Ghana is home to numerous SMEs [1]. Therefore, we employ two sampling techniques: purposive non-probability sampling and simple random probability sampling. Using the purposive sampling technique, we include only SMEs documented with the association of Ghanaian Industries (AGI). This group of SMEs is appropriate for the study because they have frequent training on best managerial practices. Per AGI, there are 1600 plus active members scattered across the country. Consequently, we are unable to include all these SMEs in the study. Therefore, we sample further using the simple random probability technique. This provides equal inclusion opportunities for SMEs without bias. However, SMEs with invalid e-mails and unreachable telephone numbers are replaced in the process. Following, a total of 1010 SMEs with valid emails and reachable telephone numbers are included as the final sample of the study. Per the one-third sampling rule, the final sample of 1010 is way above 337 and thus representative of the study population. Thus, this provides substantiation for the generalization of our research findings. To collect data, a structured five-part closed-ended survey instrument covering demographics, FDI, EVS, ECS, SSS, and ITC is employed. Specifically, the questionnaire design is rooted in existing literature. The target respondents are the chief strategist of SMEs. Usually, the owners of SMEs in Ghana are the same as the chief strategist. Thus, strategic decisions like the engagement in interfirm value co-creation rest with CEOs or the owners. To ensure the suitability of the survey instrument, we employ the split-half by sending a sample of the instrument to 75 of the selected SMEs. Afterward, changes were made to the instrument to provide clarity and ensure internal consistency. To draft the final questionnaire, the improved instrument is further sent to 45 of the selected SMEs. This process produced a refined instrument free from ambiguity. The approved questionnaire was then sent to the 1010 SMEs via email. The entire data collection period lasted between March 2020-September 2020. The final response generated yielded 856 (1010). This difference is accounted for by the fact that some SMEs did not attend to their emails or answer our follow-up telephone calls. Nonetheless, the response rate is great and thus reduces the probability of non-response rate bias. Table 1 shows the data descriptiong and sources.

Investment (FDI) and environmental sustainability decisions (EVS), economic sustainability decisions (ECS), and social sustainability decisions (SSS). We also estimate the mediating role of interfirm value co-creation decisions (ITC) in the relationships. This model allows complex relationships between one or more independent variables as well as one or more dependent variables. This statistical technique allows the estimation of multilevel regression models and is applied to testing research hypotheses that contain direct and indirect observations of one or more dependent and independent variables respectively. The main reason behind adopting the SEM technique in this study is to examine and as well validate the proposed casual model illustrated in Figure 1. Considering a structural model that contains four (5) variables; FDI, EVC, ECS, ESS, and ITC, where firm FDI is the response variable (Y) or the endogenous variable while EVS, ECS, and SSS are exogenous variables (Xs) with ITC as a dependent (endogenous) on both aforementioned and independent variables and at the same as an explanatory variable (X) on the FDI within the entire model. The model can therefore be presented theoretically in a matrix form as:

[ y 1 ⋯ y p ] = ( 0 ⋯ β 1 p ⋮ ⋱ ⋮ β p 1 ⋯ 0 ) [ y 1 ⋯ y p ] + ( δ 11 ⋯ δ 1 q ⋮ ⋱ ⋮ δ p 1 ⋯ δ p q ) [ x 1 ⋯ x q ] + [ ε 1 ⋯ ε p ] (1)

Summarily the matrix equation in Equation (1) can be reformulated as:

Y = B Y + Γ X + ε (2)

where p represents the number of regression equations to be estimated simultaneously, p by p B square matrix contains the parameter coefficients of the regressors of Y variables on the other Y variables with the 0 diagonal values implying that a variable cannot cause itself. Also, the p by q Γ matrix contains coefficients of the Y’s on X’s whereas ε is a p by 1 vector consisting of residual terms. Based on the theoretical model specification, a deduction can be made that series of regression equations are to be estimated to assess the causal effects amid the variables employed in the study which can found in the structural model as Figure 1 depicts. Thus, regarding the theoretical model formulated in Equation (1) and the structural model from Figure 1, the series of regression equations to be estimated as specified as follows;

FDI i = β 0 + β a EVS + ε i (3a)

FDI i = β 0 + β b ECS + ε i (3b)

FDI i = β 0 + β c SSS + ε i (3c)

FDI i = β 0 + β d ITC + ε i (3d)

EVS i = β 0 + β d ITC + ε i (3e)

ECS i = β 0 + β d ITC + ε i (3f)

SSS i = β 0 + β d ITC + ε i (3g)

FDI i = β 0 + β d ITC ∗ + β a EVS + ε i (3h)

FDI i = β 0 + β d ITC ∗ + β a ECS + ε i (3i)

FDI i = β 0 + β d ITC ∗ + β a SSS + ε i (3j)

where FDI, EVS, ECS, SSS, and ITC, represent foreign direct investment, environmental sustainability, economic sustainability decisions, social sustainability decisions, and interfirm value co-creation decisions respectively. Equations (3i) and (3j) estimate the mediating effect of ITC in the relationship between FDI and EVS, ECS, SSS respectively.

This section presents the results of the descriptive analysis, reliability test, validity test, and test of hypotheses.