Mining Junior, Major Political Risks

Abstract

Within the discipline of international business, institution-based theories on strategic management concentrate on how foreign firms conform to their local operating environment. One of the leading theories extending from such research is the idea that a foreign firm’s success in a given country rests on the firm’s ability to “bridge” the institutional (or structural) distance between the firm’s home country and host country, whether that distance be cultural, regulatory, political, cognitive or any given number of possible structural measures. The greater the gap between home and host country, proponents of institutional distance claim, the more challenging it will be for the firm to be successful in the host environment. In this article, we develop the concept of institutional distance through a single qualitative case study of a junior mining firm, Frontier Mining, initially headquartered in the United States and listed on the London Stock Exchange, but with the vast majority of its operations located in Kazakhstan. We approach Frontier and the concept of institutional distance less through the lens of international business and more through the interdisciplinary lens typical of regional studies: how Frontier conforms to the local Kazakh environment is equally telling for those interested in strategic management as it is for those concerned with the intersection of the international political economy and the domestic political economy of a post-Soviet state in transition.