The fragmentation of political risk and MNCs' supply chain linkages

Political science research devotes considerable attention to the impact of political risk on multinational companies' (MNCs') behavior. However, this body of research suffers from two main oversights: (1) a disproportionate focus on MNCs' investment decisions, and (2) an assumption that political risk takes a common, centralized form across countries. In this dissertation, I redirect, attention to the political determinants of MNCs' supply chain linkages. I argue that these linkages represent a risk-mitigating strategy for MNCs, and one that is particularly well suited for dealing with environments where the sources of political risk are spread throughout the state apparatus -- which I refer to as fragmented political risk. To test this theory, I draw on both cross-sectional survey data of MNCs in Sub-Saharan Africa and firm-level panel data from Indonesia -- a country that experienced a profound fragmentation in the structure of political risk. The principal finding of this research is that fragmented political risk causes MNCs to increase their use of local suppliers, with particularly strong effects among those that are (1) more vulnerable to political risk, and (2) have a greater capacity to adopt linkages, in general. These findings qualify research on the political determinants of FDI by showing that MNCs, and not merely states, are capable of resolving political risk in the host country.

Name thesis:degree_name

Doctoral

Department dc:contributor.department

Massachusetts Institute of Technology. Department of Political Science

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2020

Author dc:creator

• Intscher, Nicholas.

Advisor dc:contributor.advisor

• David A. Singer.

• Political Science.

Statement dc:rights

• MIT theses may be protected by copyright. Please reuse MIT thesis content according to the MIT Libraries Permissions Policy, which is available through the URL provided.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

https://hdl.handle.net/1721.1/128635

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/128635