The Political Influence of Foreign Firms in Developing Countries

31 Pages Posted: 22 Oct 2007  

Rodolphe Desbordes

Catholic University of Louvain (UCL)

Julien Vauday

Université Paris I Panthéon-Sorbonne

Abstract

Foreign firms are likely to attempt to shape host government policies in their favour, as the profitability of MNE foreign affiliates largely depends on the business environment in which they operate. Based on data from the World Business Environment Survey, this paper investigates the political influence of foreign firms in 48 developing countries. It is found that foreign firms derive substantial fiscal and regulatory advantages from their political influence and from their ability to negotiate superior entry conditions.

Suggested Citation

Desbordes, Rodolphe and Vauday, Julien, The Political Influence of Foreign Firms in Developing Countries. Economics & Politics, Vol. 19, No. 3, pp. 421-451, November 2007. Available at SSRN: https://ssrn.com/abstract=1022736 or http://dx.doi.org/10.1111/j.1468-0343.2007.00317.x

Rodolphe Desbordes (Contact Author)

Catholic University of Louvain (UCL) ( email )

Place Montesquieu, 3
Louvain-la-Neuve, 1348
Belgium

Julien Vauday

Université Paris I Panthéon-Sorbonne ( email )

12, place du Panthéon
Paris, IL
France

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