Fig 1 - uploaded by Christopher Hartwell
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Expropriations in the Oil Sector, 1905-2005. Source: Mahdavi (2014). The figures use a sample of 61 countries to show the founding of a "state oil company" created via nationalization of existing private companies in that year. Used by permission.
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The examination of political risk, political uncertainty, and political institutions in the international business literature has, not unexpectedly, been shaped by the prevailing issues faced by firms at their time of writing. While these three separate angles together have provided an iteratively more comprehensive view of the politics and busines...
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... Commission of Foreign Investments, 1962, political risk was "loss of control over ownership or loss of benefits of enterprise by government actions." High-profile nationalization and expropriation occurred throughout developing countries in the 1960s and 1970s (Burton & Inoue, 1984), chiefly connected with natural resource industries (see Fig. 1) -as in Iran and Egypt (Guriev, Kolotilin, & Sonin, 2011) -or industries perceived as "critical" (Kobrin, 1984), as governments tried to "localize" production and keep local subsidiaries supporting national policies (Kobrin, 1980). This state of affairs subsequently became a fertile area of IB research Table 1 The Evolution of ...
Citations
... Furthermore, Polish companies remain poorly researched in terms of the Digital Revolution. Firms in post-transition countries such as Poland are exposed to harsh competition from firms all around the globe and faced with a globalization-deglobalization narrative (Witt, 2019), 'wicked problems' (Rašković, 2022) new types of risks, such as populism, nationalism, and xenophobia (Lonergan & Blyth, 2020;Hartwell & Devinney, 2021), or technonationalism (Luo, 2022) and they need to swiftly adapt and adjust to standard and general patterns which govern international business activities. Nevertheless, their legacy of representing previously a communist regime and the fact they exemplify the country seen as a unique research laboratory (magnitude of changes, cultural heritage) make them quite atypical -suffering liability of latecomers, being less advanced and endangered by middle-income trap -all this requires a special attention. ...
... Although common in the developing countries, populism has recently come to the shores of established democracies (Hartwell and Devinney, 2021), and varieties of populism have taken root in authoritarian states (e.g., China and Russia), coordinated market economies (e.g., Germany and Sweden), and liberal market economies (e.g., U.K. and U.S.) (Devinney and Hartwell, 2020). ...
... Under such circumstances, accelerated "regime uncertainty" will be perceived by entrepreneurs and investors due to the increased level of unpredictability in the regulatory environment (Bennett et al., 2023). The rise in populism may also increase institutional volatility (Hartwell and Devinney, 2021) and all categories of political risk (Blake et al., 2024;Wei et al., 2022) for entrepreneurs, such as transactional risk, operational risk, and ownership risk (Devinney and Hartwell, 2020). ...
... Our findings echo previous research that the change in political environment presents both risk (e.g., instability and direct constraints for business operations) and uncertainty (i.e., political influence beyond discrete policies that could encompass regime shifts) (Kobrin, 1979) for entrepreneurs. Our findings thus complement research suggesting that perceived institutional stability matters for entrepreneurship (Bennett et al., 2023) and that political stability should be disentangled as distinct influence on entrepreneurship (Hartwell and Devinney, 2021). By examining populist discourse made by the nation's political leaders, we respond to research calling for more scholarly attention to the "content" of populism, that is, the critical role that political leaders play in the influence of institutions on entrepreneurship (Devinney and Hartwell, 2020). ...
This research addresses the impact of the remarkable rise in populism on innovative new ventures. Integrating institutional theory with gender role congruity theory, we reason that the surge of populist discourse by a nation's top political leaders decreases the innovativeness of new ventures, and this negative relationship is more pronounced for women entrepreneurs. We also consider two critical yet overlooked institutions, gender inequality and grammatical gender marking in the dominant languages that entrepreneurs speak, and propose that they reinforce this negative relationship. Data from 69,406 observations of entrepreneurs across 40 countries during the period of 2005–2018, analyzed with a difference-in-differences (DiD) design, support our hypotheses. Theoretical and policy implications are discussed for the challenges of promoting innovation among women entrepreneurs, in countries with greater gender inequality and where the dominant language exhibits greater intensity of grammatical gender marking, with populism on the rise worldwide.
... However, this doesn't necessarily translate into advantages for companies. In other words, populism may make developed countries more akin to emerging markets, but this diminished distance does not guarantee that business operations will become easier or that organisations will enjoy any rewards (Hartwell & Devinney, 2021). ...
... Furthermore, Polish companies remain poorly researched in terms of the Digital Revolution. Firms in post-transition countries such as Poland are exposed to harsh competition from firms all around the globe and faced with a globalization-deglobalization narrative (Witt, 2019), 'wicked problems' (Rašković, 2022) new types of risks, such as populism, nationalism, and xenophobia (Lonergan & Blyth, 2020;Hartwell & Devinney, 2021), or technonationalism (Luo, 2022) and they need to swiftly adapt and adjust to standard and general patterns which govern international business activities. Nevertheless, their legacy of representing previously a communist regime and the fact they exemplify the country seen as a unique research laboratory (magnitude of changes, cultural heritage) make them quite atypical -suffering liability of latecomers, being less advanced and endangered by middle-income trap -all this requires a special attention. ...
Objective: The objective of the article is to assess the firms’ digital maturity and examine how the adoption of Industry 4.0 solutions affects global value chain (GVC) relationships. Research Design & Methods: The study combined a critical literature review with quantitative empirical research. We collected the primary data during computer-assisted telephone interviews (CATI) among 400 industrial manufacturing firms in Poland. Findings: The study demonstrates that I4.0 technologies adoption modifies the awareness of partners’ progress in digital transformation, affects integration among partners, and leads to changes in GVCs’ diversification, geographic scope, and governance. Thanks to the study on the digital maturity of firms from a post-transition country, we demonstrated that I4.0 still requires conceptual development and that the emerging theory of the Fourth Industrial Revolution is interdependent with the theory of GVCs. Implications & Recommendations: We focused on the disruption caused by the advancement of digital transformation in companies that operate in a constellation of relationships and are interdependent in the same GVC. The study recognizes the relationships within the GVC as channels of transmission of challenges, risks, and opportunities that emerge from the disruption. We referred to the case of a post-transition, post-communist country in Central and Eastern Europe under digital transformation, which is highly specific yet offers valuable findings transferable to other economies on the eve of the Fourth Industrial Revolution. Contribution & Value Added: The novelty of the study lies in the integration of research on digital technology adoption as diagnosed among manufacturing companies in a post-transition country with the inquiry regarding their participation and role in GVCs. Thanks to this approach, we identified how firms’ digital maturity reshapes their buyer-supplier relations and, thus, their position in value chains.
... Secondly, elections are considered a manifestation of popular sovereignty, where the highest power is in the hands of citizens, and they are the key elements in shaping the structure of the state (Hartwell & Devinney, 2021). Elections are one of the various means used to realize people's sovereignty. ...
Hoaxes are often the dominant element in every electoral process, whether in regional or presidential elections. The spread of fake news or false information through hoaxes can be done for a variety of purposes, ranging from jokes to serious political purposes. Incomprehension of political education and misuse of social media have become fertile fields for spreading hoaxes, especially in every election. In maintaining vigilance and facing the wave of hoaxes in the 2024 presidential election, research methods that can be used are content analysis and social network analysis. The purpose of this study is to detail the causes and consequences of the spread of hoaxes in the General Election, as well as present recommendations related to effective political education strategies to prevent and overcome the spread of hoaxes in the context of elections. This research is expected to contribute conceptually and practically to minimize the negative impact of spreading hoaxes on elections and increase public understanding of elections through the application of political education. To achieve this goal, this research will involve literature analysis and case studies of the spread of hoaxes in elections.
... Firms' performance is highly dependent on the political environment, which has been established for stable institutional contexts (Hartwell & Devinney, 2021) while scholars have paid less attention to how heterogeneous and dynamic political environments across diverse contexts affect firms' performance (Lukoianove et al., 2022). In countries with less stable and more dynamic institutions, political uncertainty in host markets impose transaction costs on firms due to lost opportunities and costs of managing risks, complicating firms' investments and therefore motivating non-market activities . ...
... In response to environmental uncertainty, in their home country MNEs develop capabilities needed to acquire political knowledge and access political capital (Barry & DiGiuseppe, 2019). This enables businesses to recognize and address changes in their environment by increasing their political knowledge and thus reducing political uncertainty (Hartwell & Devinney, 2021). Firms accumulate political capabilities over time to manage and mitigate political risks abroad. ...
... Popper's paradox is more than clever storytelling, as many countries are currently living it-the resurgence in populist electoral successes since the Global Financial Crisis of [2007][2008][2009] have shown the ability of anti-elite, anti-globalization politicians to utilize domestic institutions for their own ends. In fact, this co-optation of institutional mechanisms has been the hallmark of the resurgence of populist politics across the world (Hartwell & Devinney, 2021). Moreover, the latest successes of populism have been distinct from earlier waves, which were centered in developing countries, particularly across Latin America, as the latest resurgence of populist ideas and-crucially-populist electoral successes has occurred in developed economies. ...
... This "anti" bias in populism often finds its way towards MNEs, who present too attractive a target to pass up in the implementation of more protectionist international polices and more interventionist domestic policies. Indeed, MNEs check all the characteristic boxes and fit all of the definitional dimensions to be targeted by populists (Hartwell & Devinney, 2021). Foreign MNEs have a well-established "liability of foreignness," but this liability is heightened in a populist political environment where there are fewer institutional constraints (Chen et al., 2023). ...
... Additionally, however, MNEs might be targeted also by home-country populist governments (Hartwell & Devinney, 2021). IB research typically assumes that home-country governments are inclined to support internationalization efforts. ...
In this editorial introduction to the Special Issue on populism, we discuss different approaches to defining populism in ways relevant to multinational enterprise (MNE) strategy and organization. In addition, we demonstrate how populist host-country government policies often target MNEs in ways that give rise to distinctly new forms of discriminatory treatment. This theoretical background sets the stage for the papers of this Special Issue, explaining the origins of these populist host-country government policies and the impact of such policies on FDI and international trade. We conclude with various suggestions for advancing IB policy research on populism, including building a better model of where populism comes from, how various conceptions of populism operate, and how they affect MNEs.
... In another branch of the literature, scholars posit that democratic backsliding increases political risks and makes the business environment uncertain and unpredictable Schneider 2021, Hartwell &Devinney, 2021;Kinderman et al., 2022). However, there are some limitations of these concepts. ...
The aim of the article is to show how modern autocracies can distort traditional institutions' principles of functioning and form state-business relations for their own benefit. Our case study is Hungary, an autocratic system within a democratic union, where the economic conditions have worsened in the past couple of years. Based on documentary evidence, data and interviews, we demonstrate how the regime's longevity depends on three main factors: alternative institutional arrangements, perceived individual economic welfare and support of business actors. The tools to handle foreign investors and control domestic business are different but creative and effective and can result in a long-term conciliation of different players and the stabilisation of the ruling power even in case of economic difficulties. ARTICLE HISTORY
... Elitist tendencies in making decisions in urgent conditions such as the COVID-19 pandemic cause pressure that must be faced by a country's leaders (Montiel et al. 2021). So, they are forced to immediately make decisions based on their idiosyncrasies to demonstrate their role as heads of state with integrity (Hartwell and Devinney 2021). Elites also shape society's perspective regarding society's seriousness in facing extraordinary situations (Moniz 2020). ...
The unequal distribution of the COVID-19 vaccine worldwide is one of humanity’s global challenges due to political factors entering and influencing the distribution of vaccines to countries worldwide. Vaccine-producing countries are fragmented into two sides: democratic and non-democratic countries. This article aims to answer how political factors can influence the distribution of the COVID-19 vaccine globally and which vaccine is the global favorite. This article uses vaccine politics theory as its basis and uses descriptive-comparative methods in the data analysis process. The results of this research found that there were indications that illiberal democratic practices were widespread during the COVID-19 pandemic, followed by the decision of the head of state to regulate the distribution of vaccines in their country, which tended to be authoritarian during the pandemic. Apart from that, vaccines produced by democratic countries are the favorite of the global community compared to vaccines produced by non-democratic countries. The transparency factor in the production process is the primary benchmark in assessing product quality in addition to the country of origin.
... A notable limitation of our research might be the volatile and evolving landscape of global trade policies in the aftermath of the global financial crisis. The rise of populist leaders in both developed and emerging-market economies, as highlighted by Verner and Gyöngyösi [94]; Heydarian [95]; Hartwell and Devinney [96]; Hartwell [97]; and Gyöngyösi and Verner [98], triggered a wave of protectionism and the termination of multilateral agreements, as pointed out by Paiva et al. [99] and Campello et al. [100]. This political and economic backdrop significantly complicates the analysis of trade agreements' impact on bilateral trade between India and Sri Lanka. ...
This article examines bilateral trade relations between the two important countries of South Asia, India and Sri Lanka, in light of the South Asian Free Trade Area (SAFTA) and the India–Sri Lanka Free Trade Agreement (ISFTA). The analysis period spans the years 1995 to 2020. The primary analysis found that bilateral trade has been sluggish and that the SAFTA and ISFTA agreements have had no discernible effect on these two countries’ bilateral trade performance. The causes of lackluster trade performance were investigated using the “revealed comparative advantage” and the “trade complementarity” indices. Clear evidence was found demonstrating that the reason for the bilateral trade’s consistent lackluster performance is due to both countries’ lack of revealed comparative advantage in the majority of product groups, followed by export similarity in the product groups where they do have a comparative advantage. The findings also confirm the suspicion of many observers that they are competitors rather than natural trading partners. Although any substantial future increase in their bilateral trade is improbable and fanciful, the paper reflects on methods of strengthening bilateral trade.
