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Explaining foreign firms' approaches to corporate political activity in emerging economies: the effects of resource criticality, product diversification, inter-subsidiary integration, and business ties
journal contribution
posted on 2023-06-08, 22:10 authored by Vikrant ShirodkarVikrant Shirodkar, Alexander T MohrDespite the increasing scope for transactional approaches to corporate political activity (CPA) in emerging markets and rising concerns about the use of relational approaches, foreign firms in emerging economies appear to be reluctant to adopt transactional approaches to CPA. Using Resource Dependence theory we argue that criticality of resources, product diversification, integration with other foreign subsidiaries, and business ties may explain why foreign firms adopt a transactional or a relational approach to CPA. We test our hypotheses using a sample of 105 subsidiaries of foreign firms in India. We find that unrelated diversification and close integration with other subsidiaries of their parent firm makes subsidiaries more likely to adopt a transactional approach, whereas local resource criticality and ties to local businesses makes subsidiaries less likely to use a transactional approach to CPA. Our findings enhance our understanding of the factors that determine foreign firms’ choice of approaches to CPA in emerging economies.
History
Publication status
- Published
File Version
- Published version
Journal
International Business ReviewISSN
0969-5931Publisher
ElsevierExternal DOI
Issue
4Volume
24Page range
567-579Department affiliated with
- Business and Management Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2015-08-20First Open Access (FOA) Date
2017-03-01First Compliant Deposit (FCD) Date
2015-08-20Usage metrics
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