Abstract
This article investigates how firm ownership influences nonmarket strategies in emerging economies. This study demonstrates that institutional constraints on “foreignness” shapes a firm’s lobbying efforts, a popular nonmarket instrument. This study also explores how foreign firms’ lobbying decisions are affected by a political structure of a country. In so doing this study deepens our understanding of the determinants of nonmarket strategy. Using a novel cross-country data set and nonparametric matching method this study finds that foreign firms are more likely to lobby compared to domestic firms as lobbying is a legal instrument to influence policy outcomes. The results also suggest that political constraints discourage firm’s to get involved in lobbying efforts.
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