Political Institutional Change, Obsolescing Legitimacy, and Multinational Corporations

  title={Political Institutional Change, Obsolescing Legitimacy, and Multinational Corporations},
  author={Marcelo Bucheli and Min Young Kim},
  journal={Management International Review},
This paper studies the practice of integration of influential host country actors to a multinational corporation as a strategy to decrease problems of legitimacy to the foreign firm before the host country’s society.By developing the concept of obsolescing legitimacy, we argue that this strategy provides legitimacy to the foreign firm only in the absence of institutional changes at the macro-political level in the host country. Once these changes take place, an alliance by the multinational to… 
Reputation and Political Legitimacy: ITT in Chile, 1927–1972
The literature on multinational corporations argues that a foreign firm can legitimize its activities, improve its reputation in a host country, and reduce the risk of hostile actions by the host
Multinational Corporations, Property Rights, and Legitimization Strategies: US Investors in the Argentine and Peruvian Oil Industries in the Twentieth Century
type="main"> Multinational corporations in the extractive sector have historically faced challenges to their property rights, particularly in oil. International business scholars argue that firms can
Subnational institutional environment, scale competition and MNEs’ ownership levels in transition economy: evidence from China
Abstract This paper shows that the effect of market scale competition on the ownership levels of foreign-funded enterprises is conditioned on sub-national institutional environment in China. Analysis
Attacked from Both Sides: A Dynamic Model of Multinational Corporations' Strategies for Protection of Their Property Rights
Multinationals operating in site-specific industries face two types of opportunistic behavior. If they vertically integrate, host governments have incentives to change existing legislation
Varieties in state capitalism: Outward FDI strategies of central and local state-owned enterprises from emerging economy countries
Institutional diversity characterizing state-owned enterprises (SOEs) from emerging economies holds critical but under-examined implications for their internationalization activities. Different types
Uncovering the complex relationships between political risk and MNE firm legitimacy: Insights from Libya
Using the before–after natural experiment occasioned by the Arab Spring in Libya, we explore how market and non-market activity affect foreign firm legitimacy in times of political turmoil. Although
Geopolitical jockeying: Economic nationalism and multinational strategy in historical perspective
Research summary: We explore multinational strategy formation in the context of rising economic nationalism. Specifically, we examine how firms develop strategies to capitalize on the historical and
Good friends in high places: Politico-economic determinants of the expropriation and taxation of multinational firms
Scholars explaining the conditions that lead governments to expropriate local operations of foreign multinational firms largely focus on how large sunk costs decrease the multinationals’ bargaining
External factors and outward foreign direct investment by Chinese firms
Drawing on the institutional lens and the global political economy (GPE) perspective, the thesis firstly examines the role of home-government support and interstate relational factors in shaping
MNE post‐entry institutional strategies in emerging markets: An organizational field position perspective
In this paper, we leverage the concept of organizational field, currently under-explored in international business literature, to understand how Multinational Enterprises (MNEs) from developed


The determinants of MNE subsidiaries' political strategies: evidence of institutional duality
In this study, we develop and test a model of the determinants of political strategies used by foreign subsidiaries of multinational enterprises (MNEs). Using recent theoretical advances in
Institutional Theory in the Study of Multinational Corporations: A Critique and New Directions
This paper was motivated by the growing interest of scholars of multinational corporations (MNCs) in the institutional perspective. Our review of the literature suggests that international management
Multinational corporations, totalitarian regimes and economic nationalism: United Fruit Company in Central America, 1899–1975
The US multinational United Fruit Company has been considered the quintessential representative of American imperialism in Central America. Not only did the company enjoy enormous privileges in that
Organizational Legitimacy Under Conditions of Complexity: The Case of the Multinational Enterprise
We examine organizational legitimacy in the context of the multinational enterprise (MNE). After discussing three types of complexity (of the legitimating environment, the organization, and the
The Institutional Environment for Multinational Investment
This article posits that the effect of political hazards on the choice of market entry mode varies across multinational firms based on the extent to which they face expropriation hazards from their
Overcoming the Liability of Foreignness
This study addressed the question of whether firms in a competitive, globally integrated environment face a “liability of foreignness” and to what extent either importing home-country organizational
The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development
Thriving markets require not only an appropriately designed economic system, but a secure political foundation that limits the ability of the state to confiscate wealth. This requires a form of
International-Business Political Behavior: New Theoretical Directions
Alternative assumptions are advanced regarding the political nature of international business and the role of government as a factor of production, which firms must manage in their international
A Multidimensional Model of Organizational Legitimacy: Hospital Survival in Changing Institutional Environments
Using data on 143 hospital organizations, this article examines the antecedents and effects of two forms of organizational legitimacy (managerial and technical) over a 46-year period. Results show
Outward foreign direct investment as escape response to home country institutional constraints
In this perspective paper we argue that outward foreign direct investment (OFDI) undertaken as escape response to perceived misalignment between firm needs and home country institutional conditions