How Much Do Political Connections Matter for Firm Internationalisation? A Meta-Analytic Review

Abstract

Prior empirical studies provide indefinite conclusions to the political connection (PC) - internationalization link and the boundary conditions. In this paper, we conduct a meta-analytic review of the relationship between PCs and firm internationalization, and boundary conditions influencing their relationship. Based on a dataset from 59 papers encompassing 25,197 observations, our findings endorse the argument that PCs have a positive impact on firm internationalization. Specifically, our results demonstrate that PCs facilitate a firm’s various international commitment modes, but not international diversification. PCs embedded in host countries have a stronger impact on firm internationalization than PCs originating from home countries. Furthermore, PCs promote firm internationalization more strongly in a late stage than in an early stage. PCs are perceived to play a much larger role in firm internationalization by managers than the effect sizes observed from objective data. Surprisingly, we do not find support for the effect size difference between developing and developed host countries. We point out the implications and directions for future research of PCs based on the findings and characteristics of the meta-analysed dataset.