Search results

The purpose of this study is to apply the institution-based view and resource dependence theory in arguing that perceived deficiencies in a legal service sector where a foreign subsidiary operates will influence the intensity of its political ties with actors in both the regulatory and legal arenas. The authors further theorized that these relationships will vary across governance environments.

The research context for this study was multinational enterprises (MNE) wholly owned foreign subsidiaries and international joint ventures (IJVs) operating in the Philippines and Thailand. Data for most variables in this study came from primary survey data collected in 2018 from senior managers of MNE WOSs and IJVs operating in the Philippines and Thailand.

The authors’ analysis of 352 foreign subsidiaries operating in the Philippines and Thailand show that, in a flawed democracy, perceived deficient legal services enhance the intensity of foreign subsidiary political ties with government actors in both the regulatory and legal arena. However, in a hybrid regime, perceived deficient legal services enhance only the intensity of foreign subsidiary political ties with government actors in the regulatory arena. The authors’ findings also suggest that the relationship between perceived deficiencies in legal service sector and the intensity of political ties is stronger for foreign subsidiaries that operate in heavily regulated industries across both a flawed democracy and hybrid regime. Conversely, the authors do not find the market orientation of these foreign subsidiaries to play a role in this process.

The authors’ study was unable to control for whether managerial perceptions of deficient legal services were well informed at the local or federal level. This issue raises the question of will the presence of an in-house legal department influence managerial perceptions with regard to deficiencies within a legal service sector? Based on these limitations, the authors suggest that future research can further extend political ties research by using a fine-grained analysis in investigating the antecedents of managerial perceptions of legal services within different legal jurisdictions.

The political ties literature has largely argued that political ties are more prevalent in environmental contexts comprising institutional voids as MNEs attempt to mitigate volatility associated with the lack of developed institutional infrastructure (e.g. Blumentritt & Nigh, 2002; Bucheli et al., 2018). However, the concept of institutional voids is very broad and still rather abstract in nature. Hence, scholars have yet to fully understand what types of institutional voids may drive MNE foreign subsidiary political tie intensity in varying governance contextsThe authors’ study attempts to contribute to this important line of research by investigating how one type of institutional void, namely, perceived deficiencies in the legal service sector, can influence the intensity of political ties in varying governance environments.

Managerial ties (i.e. business ties and political ties) could help manufacturers conduct learning ambidexterity by providing external resources. However, the resource management perspective claims that merely accessing external resources does not guarantee learning ambidexterity. As manufacturers utilize their resources by implementing services, this study aims to investigate how the impact of managerial ties on learning ambidexterity depends on human resource service practices (i.e. manager service support and employee service rewards).

This study collected data from 150 high-tech manufacturing firms through a survey-based questionnaire, which was completed by two managers in one firm. The ordinary least squares regression was employed to test the research model and hypotheses.

Business ties hurt learning ambidexterity when manager service support is high, whereas business ties benefit learning ambidexterity when employee service rewards are high. Similar findings are not applied to political ties.

The authors did not examine the mechanism underlying the effect of managerial ties on learning ambidexterity. The non-significant findings on political ties suggest potential mediators for future research. Another limitation is that the study’s data are only from China. Manager ties are also important in other developing countries like Turkey. More data from other countries are needed to test the generalization of the authors’ findings.

First, managers should focus on business ties more than political ties when learning ambidexterity is important to their firms. Second, managers should reward service-oriented employees.

The study enriches the literature on investigating the impact of managerial ties on learning ambidexterity. The authors also contribute to the literature by examining servitization as a service context. Prior studies mainly examine servitization as a driver of firm performance. The findings suggest that servitization as a business context can affect other business activities.

The purpose of this study is to investigate the effect of international expansion of emerging markets multinationals (EMNEs) on the home country nonmarket political strategy and why some EMNEs intensify this political tie more than others.

We test our theoretical framework using longitudinal data, with 16 years of observations, in Multilatinas and state loans from Brazil, one of the main outward foreign direct investment (OFDI) players in the world and the OFDI leader in Latin America.

Theoretically grounded on the institution-based view of strategy, it can be postulated that international expansion is a driver of home country nonmarket political strategy. It can also be hypothesized that political tie intensity is affected by the capacity of EMNEs to deal with international expansion issues without having to depend on relationship with homes country nonmarket political actors. The results provide support for the hypotheses presented.

This paper contributes to the EMNE internationalization literature by extending the understanding of the underlying motivations and forces shaping the home country nonmarket political strategy of multinationals from emerging markets and, thus, helping understand why some EMNEs tend to be more politically active than others. Likewise, the study contributes to advancing understanding regarding the home country strategic responses adopted by Multilatinas and the forces behind the nonmarket political strategies they employ in their international expansions, especially during turbulent times.

This paper identifies the development of and gaps in knowledge in various management disciplines, including international marketing in relation to political ties in emerging markets, based on a systematic review of the related literature. The paper develops a synthesized integrative framework and provides a research agenda and pathways for future research.

The study adopts the systematic literature review protocol to investigate the ways in which political ties have been examined in the management literature in various disciplines, such as international business, marketing, entrepreneurship, strategy, innovation, and organization. In total, 114 articles published in peer-reviewed journals from 2000 to 2022 were analyzed.

The authors believe that studying the impact of political ties on firm outcomes is timely and important as interest in this area of research is growing rapidly. The review reveals that the diverse conceptual and methodological approaches adopted in different management disciplines have resulted in inconclusive and mixed findings on the relationship between political ties and performance.

This is one of the few systematic literature reviews of political ties and firm performance in emerging markets. The authors clarify some of the ambiguities around the subject and offer a path forward for developing current understanding and insights. The study also highlights the major perspectives in management and clarify the similarities and differences in the conceptualization of political ties. In addition, the authors develop an integrative framework of the political ties–performance link in emerging markets.

Grounded in strategic choice and resource-based views, this study aims to investigate the antecedents and consequences of relational strategic emphasis of foreign subsidiaries operating in Thailand. Four types of relational strategies were identified with associated differential performance outcomes.

Data collected via self-administered surveys from a diverse sample of 168 foreign subsidiaries were analyzed in two stages. First, multinomial logistic regression was used to test whether resource-bridging capability, nonmarket-based assets and market-based assets were significant predictors of relational strategy type. Then, multivariate analysis of variance was used to determine whether the four relational strategy types differed in their strategic performance and financial performance.

The three resource-based motives are significant predictors of relational strategy. Firms adopting the “dual-relational” strategy tend to have the highest level of resource-bridging capability and nonmarket-based assets while firms pursuing the “business-oriented” strategy are likely to possess a higher level of market-based assets. Extensive reliance on relational ties enables foreign subsidiaries to achieve a much higher level of strategic and financial performance than those that chose to only rely on transactional or contractual relations.

Foreign subsidiaries operating in emerging markets characterized by an unstable market environment have to establish good relationships with buyers, suppliers and distributors, as well as government agents.

Using a juxtaposition of political and business ties, a typology of the relational strategy was conceptualized. This study extends non-market strategy research by investigating the relationship between resource and capability in the choice of relational strategy. Diverse degrees of political and business ties show different impacts on strategic and financial performances.

This study aims to investigate the role of network in affecting private firms’ internationalization decision. Specifically, it investigates the way that business ties, political ties and status influence an internationalization decision.

On the basis of the survey data collected from Chinese private firms, this study distinguishes business ties from political ties and introduces network status. Binary logistic regression is used to test the hypotheses.

Results show that private firms that have business ties are more likely to internationalize, whereas private firms that have political ties are less likely to internationalize. High-status private firms are more likely to internationalize. Political ties negatively moderate the relationship between business ties and internationalization. High-status firms with political ties are more likely to internationalize.

This study provides theoretical and practical contributions. Results complement previous research on social networks in the context of Chinese private firms and have implications for managers who exert effort to internationalize their firms.

Based on social capital theory and the institutional theory, this paper aims to explain how a firm’s business ties and political ties affect contractual governance in an interfirm cooperation, and under which institutional conditions they can play a better role.

This study tests conceptual model using questionnaire survey data collected from 227 firms in China. Hierarchical regression analysis is used to test the hypotheses.

This study finds that business ties have significant effect on contract completeness, while political ties have significant effect on contract enforcement. Moreover, these effects are contingent on some institutional factors. Market information transparency strengthens the effect of business ties on contract completeness and weakens the effect of political ties on contract completeness. Legal system completeness weakens the effect of political ties on contract enforcement.

This study suggests that managers could actively and selectively use their managerial ties to enhance contractual governance in an interfirm cooperation.

This study adds to the current understanding of how an interfirm cooperation is shaped by the firm’s social capital derived from external network relationships and extends the research on what social antecedents affect contractual governance. Moreover, this study sheds new light on when managerial ties can play a more beneficial role in emerging economies.

Political ties are critical for multinational enterprises’ (MNE) survival and success. However, the effect of political ties is not monotonic. The purpose of this paper is to look into the contingent effect of political ties on MNEs’ post-entry performance.

Based on survey data collected from 416 foreign subsidiaries operating in China, which was combined with several secondary data sources, this study examined the three-way interaction of political ties, entry mode and industry restriction.

The findings support the hypotheses that the impact of political ties on firm performance is contingent on firms’ ownership-based entry modes and industry restriction. In particular, the impact of political ties is stronger for joint ventures (JV) in less restricted industries and wholly owned subsidiaries (WOS) in more restricted industries.

Political ties have different effects on WOS and JV. While in general political ties have a stronger impact for JV than for WOS, their impacts on both parties vary on industry restriction. Managers should consider ownership structure as well as industry restriction when making non-market strategies and decisions.

By analyzing the impacts of intra-organizational and market environmental factors, this study provides a fine-grained view of foreign firms’ non-market strategy in China from a post-entry performance perspective.

This study aims to investigate the drivers of political embeddedness and the possible outcome in terms of autonomy and subsidiary unique competences.

This study draws on resource dependence theory and applies structural equation modeling on a sample of 193 subsidiaries.

Political embeddedness is confirmed as a source of potential autonomy and the development of competences and is usually boosted by previous existing networks at the internal and external levels.

The authors investigate and discuss how multinational corporations can leverage political resources in host-country political arenas, extending their understanding of the interplay between political activities and market strategies.

This paper aims to explore the ideas that social legitimacy (acceptance by the public within a country) serves as a hedge against political risk and that the perceived social value of Multinational Enterprises (MNEs’) products or services improves firms’ social legitimacy and so resilience to political shock.

Drawing from a unique data concerning global construction activity and taking advantage of the Arab Spring as an exogenous, political shock, this paper teases out the relative effects of pre-shock experience and product/service emphasis.

The authors find that construction firms that worked on a higher proportion of socially beneficial projects – such as water infrastructure, transportation and telecommunications – recovered more quickly from political shock than did those that worked on projects primarily for manufacturing interests or the oil industry. The authors also find that deep experience in a country had no bearing on a firm’s ability to recover from political shock.

The findings suggest that market behaviors that enhance social legitimacy also enhance MNEs’ ability to survive in volatile political settings. These insights add to the political risk and nonmarket strategy literatures the idea that market strategies that are attentive to nonmarket strategic goals are an important addition to the toolkit for managing political risk. More specifically, when it comes to surviving political shock, pre-shock emphasis on socially beneficial products seems to create a social legitimacy buffer that enhances resilience more than do deep country experience and associated social and political ties with the political elite.