Have a Go or Lay Low? Predicting Firms’ Rhetorical Commitment versus Avoidance in Response to Polylithic Governmental Pressures

Jing Li, Jun Xia, Edward J. Zajac and Zhouyu Lin

Journal of Management Studies, 2024, vol. 61, issue 2, 307-335

Abstract: This study extends prior research on corporate political behaviour (CPB) and firms’ pursuit of political legitimacy in response to monolithic government pressures by developing and testing a framework for analysis of CPB in response to polylithic pressures. We suggest that traditional forms of CPB may be ill‐suited to polylithic governmental pressures, such as when firms need to navigate between conflicting home‐ and host‐country political worldviews and policies. We posit that in such complex political situations, firms will turn to a more subtle form of CPB (i.e., rhetorical commitment versus avoidance) as a hoped‐for solution to their international political legitimacy challenge. Our contingency perspective also highlights how geopolitical factors (i.e., whether governments of home and host countries are clearly aligned versus misaligned) will influence whether firms express their support for a home government’s foreign policy or avoid any such expression of support. We empirically test the predictive power of our framework by analysing how these political factors led Chinese firms to opt for rhetorical commitment versus rhetorical avoidance vis‐à‐vis the Chinese government’s Belt and Road Initiative (BRI). We conclude with a discussion of how our framework for analysis and our supportive findings can inform and extend research on CPB and political legitimacy.

Date: 2024
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