Coping with Autocracy: Corporate Political Activity, Institutional Duality, and MNE Local Firm Rivalry During 'Institutional Backsliding'

Abstract

This study contributes to the corporate political activities and the institutional duality literatures by investigating how MNE subsidiaries develop their political capabilities in an increasingly politicized environment in an emerging market (EM). Our study supports the view that institutional duality is not just a constraint but a resource for MNEs. Contrary to previous studies, we show that even firms from institutionally distant economies can successfully transfer political capabilities to the host context, providing them with competitive advantage over local firms. We contribute to the theory by showing that institutional duality needs to be understood as a time-dependent phenomenon.