The multinational firm and geopolitics: Europe, Russian energy, and power

Multinational firms unavoidably exert influence over politics through power that is generated by both structure and process. While both political economy and management scholars address international firms, neither field has an adequate understanding of the reciprocal relationship between multinational firms and geopolitical systems. The links between multinational firms form a distinct type of international system for the private sector – one that is simultaneously enmeshed in geopolitics and international markets even as it is also autonomous from them. The scholarly literature on the power of business in politics has demonstrated how influence derives from instrumental agency as well as structural influence, but it has taken an unnecessarily restrictive view of politics and an overly materialist theory of power. Politics are about much more than government policies. In this paper I propose an analytical framework for understanding the multinational firm as a set of relationships. I then apply one key element of that approach – the relationships among firms as a direct source of geopolitical outcomes – to the natural gas trade of Eurasia in three eras that span nearly 40 years. I conclude that the influence of business on a broader understanding of politics – and not just policies – should be central to the study of international and comparative political economy.