Political Capital as a Spatially-Bounded Asset Location-specificity, Mobility and Firms’ International Strategies

26 Pages Posted: 28 Oct 2018 Last revised: 28 Nov 2018

See all articles by Lilac Nachum

Lilac Nachum

City University of New York - Allen G. Aaronson Department of Marketing & International Business

Rajeev J. Sawant

Florida Atlantic University - Department of Management

Andrei Panibratov

Saint Petersburg State University - Graduate School of Management

Date Written: October 4, 2018

Abstract

We articulate the spatial dimension of political capital and the geographic scale of its impact on firms. We conceptualize political capital as a construct whose location-specificity and mobility over distance vary across different types, being of value for different internationalization strategies. Empirical testing of Russian firms shows that relationship-based political capital, whom firms know, loses value outside the home country, reducing international investment, whereas knowledge-based capital, what firms know, encourages international investment. The relationships are firm-specific and contingent upon firms’ industrial affiliation, their proprietary assets and country portfolios, turning the configuration of firms’ political capital into a potentially important competitive asset. Our theory offers a means to conceptualize the distinctive nature of political capital in the context of internationalizing firms.

Keywords: mobility, firms’ international strategies, whom you know and what you know, relational and knowledge political capital, Russian firms

JEL Classification: F21, F23, M16

Suggested Citation

Nachum, Lilac and Sawant, Rajeev J. and Panibratov, Andrei, Political Capital as a Spatially-Bounded Asset Location-specificity, Mobility and Firms’ International Strategies (October 4, 2018). Baruch College Zicklin School of Business Research Paper No. 2018-10-01. Available at SSRN: https://ssrn.com/abstract=3260615 or http://dx.doi.org/10.2139/ssrn.3260615

Lilac Nachum (Contact Author)

City University of New York - Allen G. Aaronson Department of Marketing & International Business ( email )

One Bernard Baruch Way, B12-240
New York, NY 10010-5585
United States

Rajeev J. Sawant

Florida Atlantic University - Department of Management ( email )

777 Glades Road
Boca Raton, FL 33433
United States

Andrei Panibratov

Saint Petersburg State University - Graduate School of Management ( email )

Volkhovsky Per. 3
St. Petersburg, 199004
Russia

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