The antecedents of MNC political risk and uncertainty under right-wing populist governments

Sallai, Dorottya ORCID: 0000-0003-3411-4818, Schnyder, Gerhard, Kinderman, Daniel and Nölke, Andreas (2023) The antecedents of MNC political risk and uncertainty under right-wing populist governments. Journal of International Business Policy, 7 (1). 41 - 63. ISSN 2522-0691

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Abstract

Right-wing populist parties who obtain governmental power rely on ethno-nationalist mobilization for domestic legitimacy. They may therefore adopt policies that explicitly seek to disadvantage foreign multinational corporations (MNCs). Understanding what factors increase a foreign MNC’s exposure to adverse action by right-wing populists is an understudied question in the field of international business policy. We investigate this question in post-socialist member states of the European Union, which constitute extreme cases of right-wing populist government power. As such, they constitute a fertile ground to further our theoretical understanding of the distinction between calculable political risk and incalculable political uncertainty. Through a case study-based theory-building approach, which draws on existing literature and interview data, we derive a series of propositions and develop a research agenda. We identify factors at the country-, sector-, and firm-level that influence exposure to adverse policy action by host-country governments. We explore when political risk may turn into political uncertainty and provide suggestions to foreign MNCs operating in right-wing populist contexts on how to reduce this uncertainty. Our study provides insights for policy makers too, who should be aware of the impact political shifts towards right-wing populist governments have on political uncertainty for foreign companies.

Item Type:	Article
Additional Information:	© 2023, The Author(s).
Divisions:	Management
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management J Political Science
Date Deposited:	19 Apr 2023 08:21
Last Modified:	22 Jul 2024 04:09
URI:	http://eprints.lse.ac.uk/id/eprint/118668

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