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A ‘core‐periphery’ framework to navigate emerging market governments—qualitative evidence from a biotechnology multinational
Author(s) -
Prithwiraj Choudhury,
James A. Geraghty,
Tarun Khanna
Publication year - 2012
Publication title -
global strategy journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.814
H-Index - 24
eISSN - 2042-5805
pISSN - 2042-5791
DOI - 10.1002/gsj.1021
Subject(s) - multinational corporation , subsidiary , emerging markets , core (optical fiber) , incentive , business , china , state (computer science) , economic system , industrial organization , market economy , economic geography , international trade , political science , economics , finance , materials science , algorithm , computer science , law , composite material
We build on the emerging literature of influence‐based models to study how multinational firms can navigate host governments. Our ‘core‐periphery’ framework posits that the actions that an MNC takes with actors in what we call the ‘periphery’—comprised of state, quasi‐state, and civil society actors—can lead to positive or negative influence with interconnected state actors in a ‘core.’ There are two mechanisms by which this can happen: engaging the periphery may either change the information set of the core or help align incentives of multiple core actors. Engaging the periphery might be particularly relevant in settings where the institutional framework is still emerging. We build a case study of a multinational firm in the biotechnology sector to illustrate how the core‐periphery framework works in multiple emerging markets across institutional differences. The analysis is based on 32 interviews conducted with the CEO and other executives of Genzyme at the corporate headquarters in Cambridge, Massachusetts, and in subsidiaries in Brazil, China, Costa Rica, France, India, and the United States.