Configuring political relationships to navigate host-country institutional complexity: Insights from Anglophone sub-Saharan Africa

We examine how ties with multiple host-country political institutions contribute to MNE subsidiary performance in countries with weak formal institutions. We suggest that forging relationships between subsidiaries and host-country government actors, local chieftains, and religious leaders generates regulative, normative, and cultural-cognitive political resources. We integrate institutional and configuration theories to argue that similarity to an ideal configuration of the three political resources contributes to MNE subsidiary performance, and that the more dysfunctional host-country institutions, the greater the impact on performance. We test our hypotheses using primary and archival data from 604 MNE subsidiaries in 23 Anglophone sub-Saharan African countries and find support for our hypotheses. In our conclusion, we discuss the wider theoretical, managerial, and public-policy implications of our findings.

Corporate philanthropy and bribery as distinctive responses to economic policy uncertainty: Do state-owned and private firms differ?

Frequent changes in economic policy pose challenges to normal business production and operations. However, little is known about the non-market strategies adopted by firms in emerging economies, such as China, in response to economic policy uncertainty. This study proposes that firms in China respond to high levels of economic policy uncertainty by increasing philanthropic donations and bribery. In addition, this study argues that private firms and state-owned firms implement different strategies to cope with economic policy uncertainty. Specifically, the study suggests that state-owned enterprises (SOEs) are more likely, than non-SOEs, to respond to economic policy uncertainty by increasing corporate philanthropy, and less likely to respond by increasing expenditure on bribes. This study obtained empirical evidence to support these views, based on an analysis of a dataset of 2,904 listed Chinese firms from 2008 to 2019.

When Dragon Meets Elephant in Africa: The Rivalry on Distinctive Competitiveness

The increasing FDI in Africa from China and India in recent years has drawn the attention of scholars, policy makers, and the media. Africa is an arena where the two emerging giants compete on different bases. Indian firms have the advantage of institutional proximity and large diaspora communities in Africa, while Chinese firms rely on government-to-government relationship-building. The rivalry between India's soft power and Chinese hard power in Africa will continue for the foreseeable future.

Strategic Responses to Institutional Voids (Rationalization, Aggression, and Defensiveness): Institutional Complementarity and Why the Home Country Matters

We seek to understand how the strategic responses of firms to institutional voids are affected by their home countries’ institutional contexts. It adopts an exploratory, multiple case studies approach examining the responses of advanced and emerging multinational enterprises, and local firms in two African countries which are characterized by such voids, namely the Democratic Republic of the Congo and Zimbabwe. Our research suggests that firms’ strategic responses to institutional voids in emerging or developing markets are affected by the home country’s institutional environment and firms’ experiences and advantages arising from that home context. Firms adopt strategic responses which reflect their respective advantages and this results in diverse approaches based on the interplay between capitalizing upon internal resources and institutional know-how. For some firms this may result in a defensive strategic response, whilst for others opportunistic and aggressive agility, or rationalization and reconciliation may manifest. We demonstrate differences between advanced and emerging multinational enterprises and domestic firms covering the spectrum between institutional outsiders and insiders. We emphasize the contextual nature of these strategic responses and argue that this requires integrating both a resource and institution-based analysis of firms’ underlying advantages and how they are able to leverage off these advantages in institutionally voided environments. Practical implications arise for doing business in emerging and developing markets.