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Article
Legal System Contingencies as Determinants of Political Tie Intensity by Wholly Owned Foreign Subsidiaries: Insights from the Philippines
Journal of World Business (2015)
  • George White, III, Old Dominion University
  • Jean J Boddewyn
  • Roberto Martin N. Galang
Abstract
How will managerial perceptions concerning specific dimensions of legal system uncertainty affect wholly owned foreign subsidiary (WOFS) political tie intensity? This study employs the institution-based view of international business strategy to explore how managerial perceptions of specific dimensions of legal system uncertainty – ex-ante commercial law inadequacy and ex-post judicial arbitrariness – will act as determinants of WOFS political tie intensity. Our analysis of 181 WOFSs in the Philippines suggests that managerial perceptions of ex-ante commercial law inadequacy and ex-post judicial arbitrariness, being two distinct dimensions of legal system uncertainty, are determinants of political tie intensity. We also find that the positive association between managerial perceptions of ex-ante commercial law inadequacy and the intensification of political ties grows stronger when a WOFS is committed to organizational adaptation of capabilities to the local context, while the positive association between managerial perceptions of ex-post judicial arbitrariness and the intensification of political ties grows stronger when a WOFS is engaged in strategically positioning operations in an emerging market environment.
Disciplines
Publication Date
Spring April 1, 2015
Citation Information
George White, Jean J Boddewyn and Roberto Martin N. Galang. "Legal System Contingencies as Determinants of Political Tie Intensity by Wholly Owned Foreign Subsidiaries: Insights from the Philippines" Journal of World Business (2015)
Available at: http://works.bepress.com/robertogalang/22/