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Democracy, Institutionalization, and Corporate Alliances

Author

Listed:
  • John Conybeare

    (Department of Political Science, University of Iowa, Iowa City, john-conybeare@uiowa.edu)

  • Dong-Hun Kim

    (Department of Political Science and International Relations, Korea University, Seoul, South Korea)

Abstract

The authors bring together and extend three strands of existing research: the propensity of democracies to ally with each other, the effects of alliances being institutionalized, and the causal impact of democracy in promoting investment. This literature is applied to corporate alliances, predicting the probability that announced alliance contracts will be completed by the participants. The authors find that democratic political regimes generate rules that create corporate shareholder democracy and that the latter promotes the institutionalization of corporate alliances. Corporate democracy and alliance institutionalization will both, controlling for transaction costs, increase the probability that corporate alliances will be completed. The findings suggest a positive association among democratic corporate governance, the willingness of corporate alliance partners to accept institutionalized ties, and the creation of an environment conducive to commercial investment commitments through alliances. Overall, corporations appear to respond to some of the same alliance incentives as sovereign states.

Suggested Citation

  • John Conybeare & Dong-Hun Kim, 2010. "Democracy, Institutionalization, and Corporate Alliances," Journal of Conflict Resolution, Peace Science Society (International), vol. 54(5), pages 715-744, October.
    • Handle: RePEc:sae:jocore:v:54:y:2010:i:5:p:715-744
    DOI: 10.1177/0022002710364127
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    References listed on IDEAS

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