Corporate political strategy and liability of foreignness: Similarities and differences between local and foreign firms in the South African Health Sector

Abstract

We investigate the differences between corporate political strategies (CPS) of local and foreign firms in the South African Health Sector. We expected to find significant differences in CPS due to MNE subsidiaries needs to overcome liability of foreignness (LOF) effects and MNEs possessing superior resources than local firms. We surveyed 103 firms and found considerable commonality in perceptions of uncertainty for both groups of firms, however foreign firms are more likely than local firms to adopt adaptation and avoidance strategies. We find that antecedent conditions such as turn over, age of the subsidiary and industry are more important than LOF in the selection of CPS.