State-level Social Capital and MNCs’ Competitive Political Resources
Previous studies have focused on the effects of dyadic intergovernmental relationships on firm behavior and performance. This study presents a network approach to intergovernmental relationships and examines two moderating effects at the state and firm levels. This study argues that firm-level competitive political resources are a function of the state-level social capital derived from the structural position in intergovernmental networks, the political institutions of home governments, and foreign experiences of multinational corporations (MNCs). State-level social capital arises from home governments’ positions in intergovernmental networks and offers information and control benefits to MNCs. This study hypothesizes that structural position in intergovernmental networks positively impacts MNC behavior. Moreover, it predicts that political institutions facilitate home governments to leverage their social capital for domestic MNCs. Furthermore, it indicates that MNCs with greater foreign experience utilize political resources more effectively. This study employs data on state-level trade networks and MNC asset procurements in the global mining industry to test these predictions and find support for the model.