Dark Side of Political Ties: Failure Case of Russian MNE Rusal in Montenegro

Lyubov A. Ermolaeva and Bojan Pantic

No 8619, Conference Papers from Graduate School of Management, St. Petersburg State University

Abstract: It is widely recognized that corporate political ties (CPT) in general lead to better organizational performance and higher firm value (Fisman, 2001; Frynas, Mellahi and Pigman, 2006; Goldman, Rocholl and So, 2009) however there are empirical evidence that the presence of CPT under certain circumstances causes negative effects on firm value (e.g. Aggarwal, Meshke & Wang, 2012; Hersh, Netter & Pope, 2008). The investigated case of Rusal's investments in Montenegrin aluminum plant demonstrates that CPT did not improve the organizational performance but even result in Rusal escaping from Montenegro. The aim of the study is to reveal/uncover the process through which corporate political ties (CPT) transform from valuable asset to a costly liability by unswerving following research questions: why corporate political ties change over time? And how this change impacts the MNE strategy in the foreign market?

Keywords: political ties; EMNEs; multinational companies; entreprises; Balkans (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cis, nep-int and nep-pol
References: Add references at CitEc
Citations:

Downloads: (external link)
https://dspace.spbu.ru/handle/11701/8619

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sps:cpaper:8619

Access Statistics for this paper

More papers in Conference Papers from Graduate School of Management, St. Petersburg State University Contact information at EDIRC.
Bibliographic data for series maintained by Lena Manaeva ( this e-mail address is bad, please contact ).