Essays on Multinational Nonmarket Strategy
Abstract
Multinationals face growing demands from nonmarket forces, making them increasingly vulnerable to social and political disruptions. This thesis investigates two sets of relationships that are at the core of multinational nonmarket strategy: firm-government and firm-society relationships, and in so doing advances our understanding of global strategies employed to tackle challenges. It comprises three essays. Essay 1 investigates the influence of the liability of stateness (LoS) on cross-border acquisitions, and I find that state-owned enterprises (SOEs) are 9% more likely to face regulatory scrutiny and that this effect is mitigated if the acquisition is indirect and when SOEs venture into host regions with high unemployment or with prior experience with state-owned employers. Essay 2 compares corporate social responsibility (CSR) performance between SOEs and private firms. I find that SOEs perform two standard deviations above private counterparts in CSR practices and that both home country CSR regulatory pressures and host country CSR regulatory pressures strengthen SOEs’ public value creation. Essay 3 focuses on corporate social responsibility (CSR) performance in the context of value chain partner misbehavior, and I find that CSR performance increases after misbehavior and that the effects vary depending on the type of partner and the presence of stricter home country CSR regulatory pressures. In summary, this dissertation outlines nonmarket challenges and strategies for multinationals to succeed globally.