Political strategies, entrepreneurial overconfidence and foreign direct investment in developing countries

Heidenreich, Stefan; Mohr, Alexander T.; Puck, Jonas F.

doi:10.1016/j.jwb.2015.03.002

Cited by 36 publications

(31 citation statements)

References 86 publications

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“…Recent studies show that MNEs' political strategies help realize first‐mover advantages (Frynas et al, ) and reduce their exposure to host country risks, especially in institutionally fragile, emerging economies (Ma & Delios, ; Puck, Rogers, & Mohr, ). However, as highlighted by Heidenreich, Mohr, and Puck (), political strategies can also lead to overconfidence of foreign investors and compromise their survival. Especially in politically instable or nontransparent environments, managing CPC locally is likely a major challenge for subsidiary managers.…”

Section: Cpc and Global Strategymentioning

confidence: 99%

Corporate political connections in global strategy

Cui

et al. 2018

Global Strategy Journal

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Research Summary: The role of corporate political connections (CPC) in global strategy has been examined in a variety of institutional contexts and analyzed from different theoretical perspectives. This literature, along with the articles in this special issue, demonstrate the importance of contextualization in understanding the motivations, processes, and outcomes of firms developing and utilizing CPC in global strategy. We argue that context‐specific aspects of CPC, such as the political system in which the firm is operating, need to be incorporated more systematically to advance theory development globally. Future studies on CPC can advance this agenda through cross‐country comparative research, deeper engagement with political science literature, linking CPC with other nonmarket strategies, and configurational analysis of the multidimensional context of CPC. Managerial Summary: Multinational companies not only compete in a market environment, they engage with political actors in both their home and host societies. This special issue brings together research that explores how companies use their corporate political connections (CPC) to achieve firm objectives. Each study takes a different approach to studying the phenomenon, informed by the national context of their empirical data. Together, these studies highlight the importance of CPC around the world. However, the variation in research approaches also highlights that the “how and why” of companies' development and utilization of CPC vary across cultures and political systems. In consequence, the development of managerial recommendations always needs to carefully consider the pertinent political context of the available empirical evidence.

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Section: Cpc and Global Strategymentioning

confidence: 99%

Corporate political connections in global strategy

Cui

et al. 2018

Global Strategy Journal

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“…Indeed, studies using this theory tend to argue that firms do CPA to address their exposure to environmental uncertainty (Mellahi et al 2016;Hillman et al 2000;Wei 2006). Emerging countries have risky environments (Puck et al 2013;Liedong et al 2017;White et al 2015), which makes business failures highly likely (Heidenreich et al 2015;Nell et al 2015). Firms, in the quest to mitigate their risk exposure, develop political connections (Liedong and Frynas 2018).…”

Section: Cpa In Emerging Countries: Concept Drivers and Strategiesmentioning

confidence: 99%

Corporate Political Strategies in Weak Institutional Environments: A Break from Conventions

2019

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There is a lack of research about the political strategies used by firms in emerging countries, mainly because the literature often assumes that Western-oriented corporate political activity (CPA) has universal application. Drawing on resourcedependency logics, we explore why and how firms orchestrate CPA in the institutionally challenging context of Nigeria. Our findings show that firms deploy four context-fitting but ethically suspect political strategies: affective, financial, pseudoattribution and kinship strategies. We leverage this understanding to contribute to CPA in emerging countries by arguing that corporate political strategies are shaped by the reciprocity and duality of dependency relationships between firms and politicians, and also by advancing that these strategies reflect institutional weaknesses and unique industry-level opportunities. Importantly, we shed light on the muttered dark side of CPA. We develop a CPA framework and discuss the research, practical and policy implications of our findings.

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“…Prior work in this research stream has, for instance, examined the political strategy behavior of subsidiaries of MNCs (Blumentritt and Nigh, 2002), the relationship between corporate political strategy and the performance of mergers and acquisitions (Brockman, Rui, & Zou, 2013), the link between first mover advantages and political resources (Frynas, Mellahi, & Pigman, 2006), corporate campaign contributions to candidates for the U.S. House of Representatives (Hersch & McDougall, 2000), and different types of political strategies deployed by firms (Keim & Zeithaml, 1986). Other studies have examined the impact of corporate political strategy on legislative decision making (Lord, 2000), the integration of market and nonmarket strategies (Holburn and Vanden Bergh, 2008), and how firms deploy political strategies in emerging economies (De Villa & Lawton, 2015;Heidenreich, Mohr, & Puck, 2015;Puck, Rogers, & Mohr, 2013;Shirodkar & Mohr, 2015). Additional work has investigated how firm characteristics such as size, age, corporate ownership, managerial and organizational characteristics, and resource dependence, affect corporate political activity (Cook & Fox, 2000;Getz, 1997), how the structure of an industry can influence the ability of its members to engage in collective action (Bhuyan, 2000), what the performance effects of political strategies are (Hadani & Schuler, 2013), and how prevalent institutional factors shape firm-level political strategies (Hillman, 2003;Lawton, McGuire, & Rajwani, 2013a;Hillman & Wan, 2005;Wan & Hillman, 2006).…”

Section: Corporate Political Strategy By Interest Groupsmentioning

confidence: 99%

A cross-country study of collective political strategy: Greenhouse gas regulations in the European Union

Patnaik

2019

J Int Bus Stud

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This study examines the outcome of collective political strategy across countries, within the context of new greenhouse gas regulations in the European Union. Drawing on the economic theory of regulation, I argue that collective political strategy can result in varied distortions of environmental policies, depending on the ideology of government actors, the electoral cycle and the type of prevalent bureaucratic regulatory system. An interesting finding in this regard is that left-leaning governments react more favorably to political strategies by industries. The study highlights the important role crosscountry heterogeneity of political systems plays in influencing the outcomes of collective political strategies.

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Political strategies, entrepreneurial overconfidence and foreign direct investment in developing countries

Cited by 36 publications

References 86 publications

Corporate political connections in global strategy

Corporate political connections in global strategy

Corporate Political Strategies in Weak Institutional Environments: A Break from Conventions

A cross-country study of collective political strategy: Greenhouse gas regulations in the European Union

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