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Domestic political connections and international expansion: It's not only ‘who you know’ that matters |
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| Affiliation: | 1. Universidad Pontificia Comillas, ICAI-ICADE, Dep. Gestión Empresarial, C/Alberto Aguilera, 23, E-28015 Madrid, Spain;2. Universidad de Oviedo, Facultad de Economía y Empresa, Dep. Admón. de Empresas, Avda. del Cristo S/N, E-33071 Oviedo, Spain;3. The Wharton School, University of Pennsylvania, 2016 Steinberg-Dietrich Hall, Philadelphia, PA 19104-6370, USA;1. School of Management, University of Michigan-Flint, United States;2. Department of Management and International Business, College of Business, Florida International University, Miami, FL 33174, United States;3. Essex Business School, University of Essex, United Kingdom;1. Kozminski University, Department of Banking and Insurance, Ul. Jagiellońska 57/59, 03-301 Warsaw, Poland;2. BG? SA, Ul. Kasprzaka 10/16, 01-211 Warsaw, Poland;3. Kozminski University, Department of Finance, Ul. Jagiellońska 57/59, 03-301 Warsaw, Poland |
| Abstract: | Former politicians on the board of directors bring to the firm domestic political connections and political knowledge. Previous research has mainly highlighted the role of contacts, without fully recognizing the role of political knowledge accumulated at home. By focusing on the effect of domestic political connections on foreign direct investment, we show that domestic political knowledge also shapes foreign expansion. We argue that contacts provided by former politicians may not be useful for foreign expansion whilst their political knowledge can be of help in countries with discretionary governments and with similar institutional environments to the one of the home country. |
| Keywords: | Political connections Home country International expansion FDI Board of directors Location choice |
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