Managing Around Populism

Timothy M. Devinney, Christopher A. Hartwell

Research output: Chapter in Book/Conference proceedingChapterpeer-review

Abstract

This chapter reviews the key obstacles to understanding the effects of populism on international business (IB) by focusing on one particular and well-studied facet of IB, firm market entry strategies. While populism has already had and potentially can have future serious repercussions for macroeconomic stability, talent sourcing, and value chain integration, a much more immediate effect of the current strain of anti-globalization populism can be to alter the incentives that a multinational enterprise (MNE) faces in its internationalization approaches and in the decision on where to invest. In practical terms, populist political environments may lead to outright restrictions on some modes of entry but are more likely to incentivize firms top utilize “safer” modes of market entry, which includes outright delays in foreign investment. The constrained space that populism may offer for entry modes may also ratchet up transaction costs to a point that firms will need to re-think their internationalization – not necessarily the strategy, but the planned location for foreign direct investment. In this sense, populists may get what they want, with a reduction of foreign business, and hence foreign influence, within their borders.
Original languageEnglish
Title of host publicationThe Multiple Dimensions of Institutional Complexity in International Business Research
EditorsAlain Verbeke, Rob van Tulder, Elizabeth L. Rose, Yingqi Wei
Place of PublicationBingley
PublisherEmerald Publishing Limited
Pages95-105
Number of pages11
ISBN (Electronic)9781800432444
ISBN (Print)9781800432451
DOIs
Publication statusPublished - 4 Mar 2021

Publication series

NameProgress in International Business Research
PublisherEmerald Insight
Volume15
ISSN (Print)1745-8862

Keywords

  • Foreign market entry
  • Institutional agents
  • Institutions
  • Political risk
  • Political uncertainty
  • Populism

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