To Choose Informational and Financial Political Access or Not? The Influence of Access Political Strategies on Subsidiary Performance of Emerging Market Multinationals

Abstract

Doing business in sub-Saharan Africa is characterized by high levels of political uncertainty. More so for MNEs internationalizing across borders in the region, institutional environments are perceived as relatively different from developed economies and may be strongly argued as weak. However, research to interrogate corporate political activities within this politically uncertain context is limited. This paper uses the dynamic capability perspective to examine the role of access political activities on the subsidiary performance of South African MNEs in sub-Saharan Africa. The study argues that contrary to the literature on access political activities, within a context of weak formal institutions and high political risk, political capabilities like information and financial political strategies negatively influence the subsidiary performance of MNEs; and host-country political risk levels moderate the relationship. We find support from a survey of senior executives of South African MNEs in cross-border businesses across sub-Saharan Africa