We examine the relationship between the geographic concentration of a firm's sales and the firm's vulnerability to expropriation hazards. Although expanding outside the home location can initially increase a firm's exposure to government expropriation, we find that this effect reverses when a...

In this article, I argue that in emerging markets firms' market capabilities are positively related to the political strategies that they employ to reduce the risks of expropriation by public and private entities. I focus specifically on the moderating conditions, including institutional...

Economic transitions from state planning and redistribution to market exchange create many businesses opportunities. But such transitions also create great uncertainty because many interdependent factors – modes of exchange, types of products, and forms of organizations – are in flux....

This paper uses biform games to examine the endogenous decision to invest in relationship-specific assets. It addresses the questions of how competition affects suppliers' decisions to produce a general-purpose product or a relationship-specific product for a buyer and under what circumstances a...

Innovation activities create substantial firm value, but they are difficult to manage owing to agency risk which is commonly thought to result in shirking, hence underinvestment in innovation. However, agency risk can also create inefficient allocation of resources among innovation activities,...

Using novel transaction-level data on Chinese business groups, this study provides the first direct evidence of the coinsurance theory of business groups, by investigating when different types of internal resources are transferred within a business group. We find that in Chinese business groups,...

Law-abiding firms often attempt to conceal their corporate political activity (CPA), yet the concealment of CPA has not been matched by our understanding of the phenomenon. We develop a theoretical framework consisting of three components to analyze firms’ strategy of CPA concealment. First,...

This paper examines political lobbying and investigates firms' decisions regarding whether to employ internal functionalities (i.e., to “make” or insource), to contract with external professionals (i.e., to “buy” or outsource), or to do both (i.e., to “make and buy” or plural...

Protecting minority shareholders is a central issue in corporate governance. A common tool of empowering minority shareholders is to curb controlling shareholders’ power of expropriating firm value, but this approach was rarely successful because of the resistance from powerful controlling...