Political activity and firm performance within nonmarket research: A review and international comparative assessment

Tazeeb Rajwani, Tahiru Azaaviele Liedong

Research output: Contribution to journalArticle

64 Citations (Scopus)

Abstract

There is a widely held view that the performance of firms depends not only on the ability of managers to exploit economic markets but also on their ability to succeed in political markets. To test the value of political activism, recent scholarship has probed the impact of corporate political activity (CPA) on firm performance. However, mixed findings and the fragmented nature of the field raise more questions than answers as to the nature of this relationship. This systematic review examines scholarly articles for evidence of the impact of CPA on firm value. The findings suggest that CPA is more valuable in emerging countries and that relational CPA strategies are more common in emerging (versus developed) countries where social capital underlies political and economic exchange. We also document the paucity of research on informational CPA strategies and policy outcomes in the emerging country context. We consider the implications of these findings and others for local and multinational enterprises, and offer suggestions for further research.

Original languageEnglish
Pages (from-to)273-283
Number of pages11
JournalJournal of World Business
Volume50
Issue number2
Early online date27 Oct 2014
DOIs
Publication statusPublished - 1 Apr 2015

Keywords

  • CIMO-logic
  • Corporate political activity
  • Firm performance
  • Institutional entrepreneurship
  • Systematic review

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