This study employs dynamic capabilities and the institution-based view of international business strategy to examine the determinants of wholly owned foreign subsidiary (WOFS) political ties, and whether or not specific dimensions of an emerging market’s legal system will moderate these relationships. Our analysis of 181 WOFSs in the Philippines suggests that managerial adaptation and strategic positioning are antecedents to political tie implementation. In addition, we find that the positive association of managerial adaptation on political ties grows stronger when WOFS perceptions of commercial law inadequacy are high, and the positive association of strategic positioning on political ties grows stronger when WOFS perceptions of commercial law inadequacy are high. Future research directions and managerial implication are offered.
- Political ties,
- dynamic capabilities,
- uncertain legal system,
- wholly owned foreign subsidiary,
- emerging market
Available at: http://works.bepress.com/robertogalang/18/