Engaging informal institutions through corporate political activity: Capabilities for subnational embeddedness in emerging economies

Charles Mbalyohere and Thomas C. Lawton

International Business Review, 2022, vol. 31, issue 2

Abstract: This study examines how multinational enterprises (MNEs) organize internally to enhance subnational institutional fit in new frontier developing economies. We consider how corporate political activity (CPA) can facilitate local embeddedness by engaging informal institutions and nonmarket stakeholders at local community level. We apply an exploratory, qualitative, multi-case study approach to six MNEs in Uganda’s electricity generation sector. The findings suggest that in markets like Uganda, MNEs depend on being bridged with subnational informal institutions such as tribal, social, and religious norms and grassroots political networks. Such bridging in turn positions these MNEs to contribute to developmental processes by integrating recognizable informal institutions into grassroots projects.

Keywords: MNE nonmarket strategy; Corporate political activity; Local embeddedness; Bridging capabilities; Informal institutions; Emerging markets (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:31:y:2022:i:2:s0969593121001451

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DOI: 10.1016/j.ibusrev.2021.101927

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