Authors
Elvira Sojli, Wing Wah Tham
Publication date
2017/2
Journal
Journal of International Business Studies
Volume
48
Pages
244-266
Publisher
Palgrave Macmillan UK
Description
Liability of foreignness, a firm’s social and economic costs of operating in a foreign market, is a major concern for multinational corporations and firms trying to enter new markets. To reduce the liability of foreignness, a firm may engage in strategic international political management via foreign political connections and thus lower barriers to entry. Faccio (Am Econ Rev 96(1):369–386, 2006) suggests that political connections can be established by having large shareholders, who are politicians or are politically connected. This paper investigates the value of such foreign political connections for publicly listed firms. We find that foreign political connections create large firm value and improve access to foreign markets. One of the main channels of value creation is government contracts awarded to firms with direct foreign political connections. Our findings provide evidence of the effectiveness of having large …
Total citations
Scholar articles
E Sojli, WW Tham - Journal of International Business Studies, 2017
The impact of foreign government investments: Sovereign wealth fund investments in the United States*
E Sojli, W Wah Tham - Institutional investors in global capital markets, 2011
E Sojli, WW Tham - Paris December 2010 Finance Meeting EUROFIDAI …, 2010