Managing socio-political risk at the subnational level: Lessons from MNE subsidiaries in Indonesia

Christiaan Röell, Ellis Osabutey, Peter Rodgers, Felix Arndt, Zaheer Khan and Shlomo Tarba

Journal of World Business, 2022, vol. 57, issue 3

Abstract: Within emerging markets, institutional conditions vary significantly at both the country and subnational levels. Although the extant literature recognises the types of risk faced by multinational enterprises (MNEs) in emerging markets, it has hitherto paid scarce attention to explaining how MNEs manage such risk at the subnational level. Reporting on four case studies from Indonesia, we outline how MNEs ensure their success by maintaining active relationships with a variety of non-market actors—including opinion leaders, government officials, and communities at the subnational level. In our study, we developed a conceptual framework, showcasing how MNEs can manage socio-political risk within heterogeneous institutional settings.

Keywords: Risk mitigation strategies; Socio-political risk; Subnational differences; MNEs, Emerging markets; Indonesia (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

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DOI: 10.1016/j.jwb.2022.101312

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