Doing Business in a Transitional Society: Economic Environment and Relational Political Strategy for Multinationals

Yadong Luo, Hongxin Zhao

Research output: Contribution to journalArticle

19 Citations (Scopus)

Abstract

This article addresses how foreign subsidiaries formulate their relational political strategy by responding to the unique parameters of the economic and institutional environment in an emerging market in an attempt to improve their performance. To this end, the authors have developed a model that assesses economic environment antecedents characterizing an emerging market (regulatory distance, industry accessibility, environmental uncertainty, and economic development) as well as the performance consequence of the subsidiaries' relational political strategy. A possible moderating effect of the firm's reputation in the host country and length of operations on the relationship between political strategy and local performance is also examined in the model. Our analysis of primary and secondary data concerning 358 foreign-invested enterprises in China generally supports this model.

Original languageEnglish (US)
Pages (from-to)515-549
Number of pages35
JournalBusiness and Society
Volume52
Issue number3
DOIs
StatePublished - Sep 2013

Fingerprint

transitional society
political strategy
performance
economics
market
reputation
uncertainty
firm
China
industry
Political strategy
Economic environment
Multinationals
Emerging markets

Keywords

  • China
  • economic environment
  • multinationals
  • political strategy
  • transition economies

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Business, Management and Accounting (miscellaneous)

Cite this

Doing Business in a Transitional Society : Economic Environment and Relational Political Strategy for Multinationals. / Luo, Yadong; Zhao, Hongxin.

In: Business and Society, Vol. 52, No. 3, 09.2013, p. 515-549.

Research output: Contribution to journalArticle

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