Lori Yue, Columbia Business School

When do Multinational Corporations Concede to Nationalistic Activism: A Natural Experiment
Lori Yue

Description

Semester: 
Winter 2022
Lecture Time: 
Friday, January 14, 2022 - 1:30pm to 3:00pm
Lecture Location: 

R0220, Ross building

Introduced By: 
Brenda Myung

Abstract

We extend the corporate political-mediation model, which is developed in a domestic context and attributes corporate concessions to social movement activists to contextual pressures, to the international market in order to explain concessions made by multinational corporations (MNC) to nationalist activists in their host countries. We argue that in the international market, the pressures that firms face include not only declines in performance but also those that arise from a more complex set of stakeholders. Whereas in a domestic context, all of a corporation’s stakeholders are embedded within the same cultural, political, and social environment and are therefore more likely to have a shared understanding of what is good, right, and desirable in society, in the international context of MNCs, stakeholders are located in countries with different national values and sometimes even opposing beliefs. Nationalism can be perceived as undermining the right of a nation’s individual members and minority groups. Thus, a firm is less likely to concede to a host country’s nationalism if it faces pressure from stakeholders located in countries that value equality, individualism, democracy, and diversity. We find support for our theory in a natural experiment on Fortune Global 500 firms that were targeted by Chinese nationalists for violating the “One China” protocol in regional indications.

Recording & Additional Notes