When Political Instability Devaluates Home-host Ties

Caroline Witte, Martijn J. Burger, Enrico Pennings

Research output: Contribution to journalJournal article

Abstract

This study aims to shed light on how the value of home-host ties is contingent on political instability (i.e., political conflict and major institutional transitions). We hypothesize that by increasing the risk within the institutional structure, small political conflict positively moderates the relationship between home-host ties and location attractiveness, whereas full-fledged wars, in which risk to the institutional structure dominates erode the value of ties. Examining location choice decisions in Sub-Saharan Africa, we find evidence that home-host ties are not affected by small political conflict, while wars and major institutional transitions devaluate home-host ties.
Original languageEnglish
Article number101077
JournalJournal of World Business
Volume55
Issue number4
Number of pages18
ISSN1090-9516
DOIs
Publication statusPublished - Jun 2020

Keywords

  • Foreign direct investment
  • Home-host ties
  • Political instability
  • Political conflict
  • Institutional change
  • Political risk

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