Domestic political connections and international expansion: It's not only ‘who you know’ that matters

Former politicians on the board of directors bring to the firm domestic political connections and political knowledge. Previous research has mainly highlighted the role of contacts, without fully recognizing the role of political knowledge accumulated at home. By focusing on the effect of domestic p...

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Bibliographic Details
Published inJournal of world business : JWB Vol. 53; no. 5; pp. 695 - 711
Main Authors Fernández-Méndez, Laura, García-Canal, Esteban, Guillén, Mauro F.
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.11.2018
Subjects
Board of directors
FDI
Home country
International expansion
Location choice
Political connections
International expansion
FDI
Political connections
Home country
Board of directors
Location choice
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Summary:Former politicians on the board of directors bring to the firm domestic political connections and political knowledge. Previous research has mainly highlighted the role of contacts, without fully recognizing the role of political knowledge accumulated at home. By focusing on the effect of domestic political connections on foreign direct investment, we show that domestic political knowledge also shapes foreign expansion. We argue that contacts provided by former politicians may not be useful for foreign expansion whilst their political knowledge can be of help in countries with discretionary governments and with similar institutional environments to the one of the home country.
ISSN:1090-9516
DOI:10.1016/j.jwb.2018.03.006