Subsidiary political embeddedness: mechanisms for leveraging local competences

Abstract

Purpose This study aims to investigate the drivers of political embeddedness and the possible outcome in terms of autonomy and subsidiary unique competences. Design/methodology/approach This study draws on resource dependence theory and applies structural equation modeling on a sample of 193 subsidiaries. Findings Political embeddedness is confirmed as a source of potential autonomy and the development of competences and is usually boosted by previous existing networks at the internal and external levels. Originality/value The authors investigate and discuss how multinational corporations can leverage political resources in host-country political arenas, extending their understanding of the interplay between political activities and market strategies.