What Materials Will This Workshop Cover?
PAPER 1: Interdisciplinary methodological framework for socio-political risk analysis: mixed-methods research of businesses, public, and local governments in emerging markets
Authors: Tatiana Vashchilko (presenter), Andreea Mihalache—O’Keef, Ekrem Karakoc, Anne Kleffner, and Martin Halek
Abstract: This paper introduces an interdisciplinary four-pronged, mixed-methods tool for multi-stakeholder evaluations of socio-political risk. The tool includes: (1) semi-structured interviews with local and foreign companies; (2) semi-structured interviews with public officials; (3) surveys of companies; and (4) public surveys. The simultaneous deployment of location-matched research tools (e.g., surveys and interviews) targeting businesses, policymakers, and the public in twelve cities across Turkey and Tunisia, captures the reactions to socio-political risk and the interactions of societal, political, and economic actors. This new methodology provides theoretically grounded and sufficiently nuanced data at the city level, making it possible to connect foreign investor, local firm and local government behaviours to public attitudes toward businesses. It also allows for identifying main types of socio-political risks in emerging countries and comparing risk management strategies of local and foreign companies, their effectiveness, public attitudes toward them, and local government perspectives on business. Therefore, this new interdisciplinary tool can be applied to address multiple research questions within and across International Relations, Comparative Politics, International Business, and Risk Management.
PAPER 2: Reality or perception? Regulatory contingencies and the political tie intensity—performance link
Authors: George O. White III (presenter), Tazeeb S. Rajwani, Thomas A. Hemphill, Jean J. Boddewyn, & Thomas C. Lawton
Abstract: How does the intensification of political ties with government actors in a host country affect foreign subsidiary performance? We apply the attention-based view of the firm and resource dependence theory in analyzing 159 foreign subsidiaries operating in the Philippines. Our theory and results show that political tie intensity is positively related to foreign subsidiary performance. However, we find that this positive relationship only holds up to an inflection point and then declines if political ties continue to intensify beyond this point particularly when foreign subsidiaries consider themselves excessively regulated. Moreover, these results substantially vary between objective and perceptual performance indicators, meaning that these results are inconclusive when considering a manager’s (perceived) satisfaction with performance. In other words, there is a potential “halo effect” associated with the intensification of political ties with government actors by executives that do not always hold true when considering excessive regulation and objective performance outcomes. Implications for managers and avenues for future research are discussed.
PAPER 3: Modeling a country’s political environment using dynamic factor analysis
Authors: Tatiana Vashchilko, James Agarwal (presenter), & Oleksiy Osiyevskyy
Abstract: Political uncertainty generates additional costs for international business (IB) resulting in less optimal decision-making. Recent political risk and IB scholarship established that “accurate” knowledge of a country’s political environment decreases political uncertainty, and thereby improves investment outcomes. However, attaining greater accuracy about the potential of a country’s political environment to generate business risk remains a challenge. Our research fills this gap in the following ways. (1) re-directing scholarly attention from the questions of what and why to how political uncertainty can be assessed; (2) offering a process-based conceptual framework explaining the dynamic structure of a country’s political environment; and (3) proposing a new methodological framework with a novel application of dynamic factor analysis (DFA) to estimate a dynamic structure of a country’s political environment. We use ICRG political risk index monthly data for Brazil for the period 1984-2018 to demonstrate the application of our frameworks by identifying the underlying latent sources of political risks within its changing political environment.