In recent years, a number of significant and unprecedented occurrences have happened on the global stage. For example, in the developed world, these can relate to the events relating to the election of Mr Donald Trump as the 45th President of the United States and to the decision of the British public to pursue an independence from the European Union, following the Brexit referendum in 2016. However, in the developing world, these can be linked to the plight of the Rohingya refugees, the actions of the NicolĆ”s Maduro Morosās presidency and the prevailing economic war in Venezuela as well as the controversy surrounding Zimbabweās recent presidential elections.
All of these events highlight widespread challenges that political actors, institutions and firms face when embarking on international business activities. Therefore, by including three chapters, the aim of the first chapter of this book is to offer a reader a lens to look at those challenges and their possible solutions.
The first chapter (Chap. 1), titled āLegitimacy and Institutional Governance Infrastructure: Understanding Political Risk from a Chinese MNE Perspectiveā by Xia Han and Xiaohui Liu, seeks to determine how legitimacy affects the international expansion of Chinese multinationals. Using the institutional theory to understand how social acceptance influences perceptions of host-country political risk, the authors draw upon 148 observations to propose that home-country biases affect the legitimacy afforded to Chinese multinationals in host-country environments. They advocate that acceptance from particular host-country stakeholders can act as an alternative mechanism for gaining legitimacy .
Chapter 2, titled āApplying Theory to Understand How Multinational Firms Address Brexit ā by Saad Laraqui and Bert J. Jarreau, adopts Dunningās eclectic paradigm, alongside other frameworks, to understand a competitive advantage in order to examine and discuss the implications of the UK referendum on leaving the European Union. According to the authors, the economic disintegration of Brexit presents a challenge for economic rationality; hence, in order to overcome this they propose recommendations designed to minimize the damage and to hasten a recovery.
The final chapter (Chap. 3), titled āBureaucrats in International Business: A Review of Five Decades of Research on State-Owned MNEsā by Asmund Rygh, provides a holistic review of state-owned multinational firms. By examining 137 studies, the author suggests that despite a common domestic bias ascribed to a business model, state-owned enterprises in emerging economies are internationalizing more and have a greater tolerance to political risk. Nevertheless, despite an increasing interest in these types of firms, this paper propagates the need for more empirical work, particularly with regard to multi-country investigations and in contexts other than China, to develop a much deeper understanding.
