Which Types of Political Capital Matter for Internationalizing Firm and Where Do They Matter? Evidence from Russia FDI and Exports

We distinguish between two types of political capital and hypothesize that their value for firms varies at home and overseas. Hence they support different modes of international activity. Empirical testing of Russian firms shows that relational political capital is of high value in the home country and therefore encourages exports and diminish FDI. Knowledge political capital creates a firm-specific capability that can be exploited overseas, thus facilitating FDI and reducing exports. The relationships are contingent upon ownership and industry affiliation. These findings call for a nuanced conceptualization of political capital as a multi-dimensional construct whose impact varies across geographies.