Dealing with high-risk environments: Institutional-based tools to reduce political risk costs

IF 5.9 2区 管理学 Q1 MANAGEMENT
Gilbert Kofi Adarkwah , Gabriel R.G. Benito
{"title":"Dealing with high-risk environments: Institutional-based tools to reduce political risk costs","authors":"Gilbert Kofi Adarkwah ,&nbsp;Gabriel R.G. Benito","doi":"10.1016/j.intman.2023.101033","DOIUrl":null,"url":null,"abstract":"<div><p>The international business (IB) literature on political risk mitigation has assigned explanatory preeminence to the organizational capabilities of multinational corporations (MNCs). The literature has assumed that political risk is avoidable for MNCs with specific political capabilities. We argue that political risk is inevitable. We posit that even if MNCs have political capabilities, host countries' political risk and its associated costs will not simply disappear. Extending the literature on political risk mitigation, we highlight the role of institutional-based tools in curbing political risk costs. Specifically, we posit that MNCs can reduce political risk costs through (i) international investment agreements, (ii) investment contracts with host governments, (iii) political risk insurance, and (iv) guarantees with binding enforcement mechanisms in unison with relying on political capabilities, thereby dampening the negative effect of uncontrollable host country political risk. We leverage the political-institutional approach to political risk and draw on relevant literature from law and IB to develop a framework to describe the conditions under which MNCs may use these institutional-based tools.</p></div>","PeriodicalId":47937,"journal":{"name":"Journal of International Management","volume":"29 4","pages":"Article 101033"},"PeriodicalIF":5.9000,"publicationDate":"2023-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of International Management","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1075425323000303","RegionNum":2,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0

Abstract

The international business (IB) literature on political risk mitigation has assigned explanatory preeminence to the organizational capabilities of multinational corporations (MNCs). The literature has assumed that political risk is avoidable for MNCs with specific political capabilities. We argue that political risk is inevitable. We posit that even if MNCs have political capabilities, host countries' political risk and its associated costs will not simply disappear. Extending the literature on political risk mitigation, we highlight the role of institutional-based tools in curbing political risk costs. Specifically, we posit that MNCs can reduce political risk costs through (i) international investment agreements, (ii) investment contracts with host governments, (iii) political risk insurance, and (iv) guarantees with binding enforcement mechanisms in unison with relying on political capabilities, thereby dampening the negative effect of uncontrollable host country political risk. We leverage the political-institutional approach to political risk and draw on relevant literature from law and IB to develop a framework to describe the conditions under which MNCs may use these institutional-based tools.

应对高风险环境:降低政治风险成本的基于制度的工具
国际商业(IB)关于政治风险缓解的文献对跨国公司的组织能力给予了解释性的优先地位。文献认为,对于具有特定政治能力的跨国公司来说,政治风险是可以避免的。我们认为政治风险是不可避免的。我们假设,即使跨国公司有政治能力,东道国的政治风险及其相关成本也不会简单地消失。扩展关于政治风险缓释的文献,我们强调了基于制度的工具在遏制政治风险成本方面的作用。具体而言,我们假设跨国公司可以通过(i)国际投资协议,(ii)与东道国政府的投资合同,(iii)政治风险保险,以及(iv)与依赖政治能力相一致的具有约束力的执行机制的担保来降低政治风险成本,从而抑制不可控的东道国政治风险的负面影响。我们利用政治制度方法来应对政治风险,并借鉴法律和IB的相关文献,制定一个框架来描述跨国公司可能使用这些基于制度的工具的条件。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 求助全文
来源期刊
自引率
9.80%
发文量
67
审稿时长
81 days
期刊介绍: The Journal of International Management is devoted to advancing an understanding of issues in the management of global enterprises, global management theory, and practice; and providing theoretical and managerial implications useful for the further development of research. It is designed to serve an audience of academic researchers and educators, as well as business professionals, by publishing both theoretical and empirical research relating to international management and strategy issues. JIM publishes theoretical and empirical research addressing international business strategy, comparative and cross-cultural management, risk management, organizational behavior, and human resource management, among others.
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信