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The Political Influence Of Foreign Firms In Developing Countries

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  • RODOLPHE DESBORDES
  • JULIEN VAUDAY

Abstract

Foreign firms are likely to attempt to shape host government policies in their favour, as the profitability of MNE foreign affiliates largely depends on the business environment in which they operate. Based on data from the World Business Environment Survey, this paper investigates the political influence of foreign firms in 48 developing countries. It is found that foreign firms derive substantial fiscal and regulatory advantages from their political influence and from their ability to negotiate superior entry conditions.

Suggested Citation

  • Rodolphe Desbordes & Julien Vauday, 2007. "The Political Influence Of Foreign Firms In Developing Countries," Economics and Politics, Wiley Blackwell, vol. 19(3), pages 421-451, November.
    • Handle: RePEc:bla:ecopol:v:19:y:2007:i:3:p:421-451
    DOI: 10.1111/j.1468-0343.2007.00317.x
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