Legal system contingencies as determinants of political tie intensity by wholly owned foreign subsidiaries: Insights from the Philippines
How will managerial perceptions concerning specific dimensions of legal system uncertainty affect wholly owned foreign subsidiary (WOFS) political tie intensity? This study employs the institution-based view of international business strategy to explore how managerial perceptions of specific dimensions of legal system uncertainty – ex-ante commercial law inadequacy and ex-post judicial arbitrariness – will act as determinants of WOFS political tie intensity. Our analysis of 181 WOFSs in the Philippines suggests that managerial perceptions of ex-ante commercial law inadequacy and ex-post judicial arbitrariness, being two distinct dimensions of legal system uncertainty, are determinants of political tie intensity. We also find that the positive association between managerial perceptions of ex-ante commercial law inadequacy and the intensification of political ties grows stronger when a WOFS is committed to organizational adaptation of capabilities to the local context, while the positive association between managerial perceptions of ex-post judicial arbitrariness and the intensification of political ties grows stronger when a WOFS is engaged in strategically positioning operations in an emerging market environment.
Year of publication: |
2015
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Authors: | White, George O. ; Boddewyn, Jean J. ; Galang, Roberto Martin N. |
Published in: |
Journal of World Business. - Elsevier, ISSN 1090-9516. - Vol. 50.2015, 2, p. 342-356
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Publisher: |
Elsevier |
Subject: | Legal system uncertainty | Political tie intensity | Organizational capabilities | Nonmarket strategy | Institution-based view | Wholly owned foreign subsidiary | Emerging markets |
Saved in:
Online Resource