Premium
THE POLITICAL INFLUENCE OF FOREIGN FIRMS IN DEVELOPING COUNTRIES
Author(s) -
DESBORDES RODOLPHE,
VAUDAY JULIEN
Publication year - 2007
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.2007.00317.x
Subject(s) - politics , negotiation , profitability index , developing country , business , foreign direct investment , government (linguistics) , business environment , international economics , international trade , economics , economic growth , finance , political science , business administration , macroeconomics , linguistics , philosophy , law
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.