Corporate Political Ties in Emerging Markets

Abstract

Development and exploitation of personal and organizational ties to the constituent parts of public authorities constitute a crucial strategy of emerging market firms. While studies of corporate political ties have generated a large body of literature, a systematic overview of this topic in the emerging market context is surprisingly lacking. This chapter identifies and highlights the latest research endeavors by management scholars to better understand how political ties influence firm outcomes. First, the chapter examines the mechanisms through which political actors and focal firms generate and appropriate relational rents. It then focuses on two key interrelationships between political ties and firm-level contingencies, respectively: (1) firms’ market-based capabilities and strategies, and (2) strategic corporate social responsibility activities. Finally, the chapter investigates how the interplay of sociopolitical institutions and political ties shapes corporate outcomes. It concludes by offering suggestions for future research agendas.