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Indirect corporate political strategy in cross-border acquisitions: influence of political affinity on target-dependent firm lobbying

Dinesh Hasija (James M. Hull College of Business, Augusta University, Augusta, Georgia, USA)
Mirzokhidjon Abdurakhmonov (Department of Management, University of Nebraska-Lincoln, Lincoln, Nebraska, USA)
Lee Warren Brown (College of Business, Texas Woman's University, Denton, Texas, USA)
Ru-Shiun Liou (Department of Management, University of Tampa, Tampa, Florida, USA)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 2 October 2024

52

Abstract

Purpose

To mitigate the impact of legitimacy concerns, firms often depend on strategic partnerships that enable them to navigate both complex political landscapes and regulatory environments. In this paper, the authors expand research into the dynamics of indirect and collective forms of corporate political activities (CPA), particularly focusing on multinational enterprises (MNEs) originating from countries with low political affinity with the host country and its allies.

Design/methodology/approach

Using a sample consisting of 2,173 friendly acquisitions in the USA made by 1,612 foreign acquirers originating from 66 countries, the authors used Tobit regression analysis to test the direct and moderating hypotheses.

Findings

The empirical evidence shows that acquiring MNEs grappling with heightened legitimacy issues due to low political affinity between the involved countries are more inclined to leverage target firms for effective lobbying resources. This tendency is amplified when the multilateral political affinity between the home and the host country's allies is also considered.

Originality/value

The evolving nature of global politics and the increasing scrutiny of corporate-political interactions necessitate a deeper understanding of indirect CPA strategies. The findings of this research shed light on how bilateral and multilateral political relations affect MNEs’ corporate political activities, specifically in the form of indirect, collective lobbying.

Keywords

Citation

Hasija, D., Abdurakhmonov, M., Brown, L.W. and Liou, R.-S. (2024), "Indirect corporate political strategy in cross-border acquisitions: influence of political affinity on target-dependent firm lobbying", Multinational Business Review, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MBR-01-2024-0016

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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