Host Country Politics and Internationalization: A Meta‐Analytic Review

• Published in: Journal of management studies Vol. 60; no. 1; pp. 204 - 241
• Main Authors: Cuervo‐Cazurra, Alvaro, Duran, Patricio, Arregle, Jean‐Luc, Essen, Marc
• Format: Journal Article
• Language: English
• Published: Oxford Blackwell Publishing Ltd 01-01-2023; Wiley
• Subjects: Business administration; Economics and Finance; Globalization; Host country; Humanities and Social Sciences; internationalization; Meta-analysis; multinational enterprises; political administration; political decision‐making; Political risk; political strategy; Politics; Uncertainty; meta-analysis; internationalization; political administration; political risk; multinational enterprises; political decision-making
• ISSN: 0022-2380; 1467-6486
• DOI: 10.1111/joms.12853

We study how host country politics influence internationalization. Our meta‐analysis clarifies which ideas receive support across the empirical literature and reveals new theoretical insights in three areas: the conceptualization of host country politics, the impact of host country politics on internationalization steps, and the moderating influence of home‐country conditions on the previous relation. First, regarding the concept of host country politics, we propose analysing host country politics rather than political risk, and separating political decision‐making, i.e., regulation creation, from political administration, i.e., regulation implementation. Second, on the effect of host country politics on internationalization steps, we suggest a dynamic management across the internationalization process, with managers shifting from avoiding harm through country selection to pre‐empting harm through entry mode selection, to adapting to harm to ensure survival. Third, studying how home‐country conditions modify the impact of host country politics on internationalization, we propose that multinationals build political and uncertainty management capabilities from their exposure to home country conditions that help them manage host country politics better.