Democracy and International Business

Democracy and International Business open_in_new

Special Guest Editors:

 

Submission window: January 2 - February 29, 2024

Submission deadline: February 29, 2024

Tentative publication date: Spring 2026

Related tracks: International Business; CSR and Business Ethics

 

Motivation for the Special Issue

This Special Issue focuses on the importance of political institutions, such as democratic and autocratic beliefs, and examines their impact on international business (IB). The traditional definition of democracy refers to a political system characterized by “free and fair elections, adult suffrage, protection of civil liberties, and few non-elected tutelary authorities (e.g., militaries, monarchies, religious bodies)” (Filippaios, Annan-Diab, Hermidas, & Theodoraki, 2019: 1104). Under democratic governance, political governance risks can be reduced, and multinational corporations (MNCs) can benefit from democracy. In this sense, because “a true democracy” can strongly protect political rights and civil liberties (Levitsky & Way, 2010), politically transparent and democratic host countries can attract MNCs from democratic home countries (Filippaios et al., 2019).

 

However, the intersection of the phenomenon of democracy and international business (IB) remains a conceptual, theoretical, and empirical research gap in the IB field except for a few papers (e.g., Arregle, Miller, Hitt, & Beamish, 2013; Filippaios et al., 2019). In leading management and IB journals, few studies have dealt with democracy in the business/management context from an IB perspective (c.f., Stratu-Strelet et al., 2023). Furthermore, among these few studies, only two papers have dealt with democracy and IB directly (Arregle et al., 2013; Filippaios et al., 2019). Within the broader fields of political science and economics, the relationship between democracy, political risk, and international trade has been examined, but few discussions have pertained to the level of international firms, such as MNCs or small international firms (e.g., global firms), and managerial decision-making. However, democratization plays a vital role for companies when deciding on the modus operandi for their foreign investment (As-Saber et al., 2001). In addition, democratization can leverage prosperity and free trade, which rely on the institutional determinants of both international and local micro- and macroeconomic mechanisms and interest group rivalry (Henisz & Mansfield, 2006). This research gap implies interesting avenues for further research, including examining firms in the context of less-developed, emerging markets and transition economies where “low intensity” democratic or autocratic political regimes prevail, which influences MNCs’ operations and globalization (Youngs, 2004).

 

To address this gap, this Special Issue aims to contribute to an interdisciplinary and heterogenous understanding of the role of democracy in the IB. Democracy is a socially important and relevant topic through which the IB can offer novel contributions with the broader goal of progress towards a better and socially more equitable world. For example, the literature on international political economy has examined the association between democratic governance and the degree of democracy in host countries (Asiedu & Lien, 2011; Greider, 1998; Ursprung & Harms, 2001), with conflicting results. Some studies have found that MNCs undertake FDI more in host countries where democratic governance prevails (McGuire & Olson, 1996; Ursprung & Harms, 2001). On the other hand, previous studies have revealed a negative association between MNCs’ FDI and democracies in host countries (Greider, 1998; Wintrobe, 1998) or even a non-linear association between them (Adam & Filippaios, 2007; Asiedu & Lien, 2011). Hence, all these studies are predominantly based on an international political economy perspective, and there is no clear conclusion. In addition, there has been limited exchange between the fields of international political economy and IB in translating the findings to the level of specific critical decisions for international firm managers. There is a need to bring interdisciplinary theorizing (from economics, political science, public administrative science, sociology, and psychology) to the field of IB in an integrative manner, with a focus on different types of international firms, their managers, employees, and stakeholders. Moreover, we encourage research that pursues creative or innovative ways of operationalizing democracy and democratic governance to capture its multiple dimensions.

 

Submissions should offer explicit and new theoretical contributions(s) but can build on relevant theoretical perspectives. It is crucial to employ a theoretical framework to link democracy—as a broader, cross-disciplinary field of interest—and IB to develop novel theoretical insights and contributions that can benefit decision-making in international firms.

 

We encourage multidisciplinary approaches and multilevel research designs. Researchers can study democracy in the IB context based on various data sources. For example, to investigate the impact of the political democracy of host countries and geographic regions on MNCs’ location selection, Arregle et al. (2013) used a composite index based on factor analysis on datasets from multiple data sources, such as Freedom House’s annual survey of political rights and civil liberties and the Political Constraint Index (POLCON) dataset (Henisz, 2000). To explore the impact of a host country’s political governance (democratic vs. autocratic regimes) on its attractiveness to MNCs, Filippaios et al. (2019) measured political governance (a composite index on the spectrum of democratic and autocratic regimes) based on Polity IV and civil liberties suppression based on Freedom House. In addition, research can utilize content analysis based on Internet searches, newspapers, magazines, academic journals, and surveys. Furthermore, qualitative research based on field research and interviews can offer unique insights into these phenomena.

 

Specific Focus of the Special Issue

Given the understudied research gap on the effects of democracy on IB and vice versa, as well as the related organizational outcomes and interaction effects, the themes of this call for papers are purposefully very wide. We offer the following areas and research questions as illustrative examples rather than an exhaustive list:

 

1. Democratic vs. autocratic political governance and organizations  

  • What are the effects of different dimensions of democracy on organizational processes across borders (e.g., international corporate social responsibility, international knowledge flows and spillovers, internationalization process and entry mode decisions, location selections, and so on) (Ursprung & Harms, 2001)?
  • What are the relationships between institutions, political rights, civil liberties, and FDI outflows and inflows?
  • How does human capital moderate the relationship between civil liberties and FDI motives?
  • What is the relationship between global CSR practices and democracy? What are their implications on the behaviors of MNCs (Wettstein, Giuliani, Santangelo, & Stahl, 2019)? How do institutional voids in home countries of emerging market MNCs allow them to decouple CSR from their implementations (Tashman, Marano, & Kostova, 2018)?

 

2. Democracy vs. autocracy and global value chains, digitalization, environmental disruptions, institutions, and non-market strategy

  • How do democracy and autocracy affect global value chains? What are their implications for the regionalization and localization of global value chains currently? What are the implications of this agenda for globalization/de-globalization and IB?
  • How do digitalization and the fourth industrial revolution affect the relationship between democracy and MNCs’ FDI?
  • How does democracy vs. autocracy affect the non-market strategies of MNCs? How do lobbying, bribery, corruption, and political connections affect MNCs’ FDI decisions and entry modes, as well as globalization/de-globalization?
  • How do formal institutions and societal trust relate to democracy and IB (Gaur, Pattnaik, Singh, & Lee, 2022)?

 

3. Research across levels of analysis

Democracy can be conceptualized at various levels, such as the supranational, regional, national, corporate, subsidiary, functional area, team, or individual levels of analysis, as well. The examples are as follows:

  • From the push-and-pull forces perspective, how does the home country’s political democracy influence the internationalization of an MNC in a host country (Arregle et al., 2013)? How does the host country’s “region-relative” political democracy influence the internationalization of an MNC (Arregle et al., 2013)?
  • How can organizations maintain democratic rules across their overseas subsidiaries or operational locations to obtain social outcomes or create global efficiency and outcomes?
  • How do advanced vs. emerging economies-based business groups differ in their emphasis on human rights or labor rights, and what are the implications for IB? How do different types of business groups (i.e., widely held, state-owned, and family owned) (Cuervo-Cazurra, 2006) affect MNCs’ human or labor rights orientation?
  • How do organizations deal with human rights or labor rights across their global units (headquarters, regional headquarters, and subsidiaries), functions, or teams?
  • How do entrepreneurs maintain the rule of human rights or labor rights when they expand their start-ups to the global markets? How do MNC CEOs or senior managers maintain human rights or labor rights for their employees in local subsidiaries, especially in the context of weak institutions?

 

Paper Development Workshop Conference and Symposium

To help authors further improve their papers, we will organize a paper development workshop conference during the summer of 2024. We invite the authors of papers that receive the decision to revise and resubmit their papers, but participation in the workshop is not a condition for the acceptance of a paper for the Special Issue. This opportunity allows these authors to receive constructive feedback from well-reputed journal editors, discussants, and conference participants, and can support these authors in strengthening and improving their manuscripts.

 

In addition, we plan to hold a symposium at a major academic conference in 2026 for papers selected for acceptance in our special issue to increase their visibility and impact.

 

Submission Process and Deadlines

All manuscripts will be reviewed as cohorts in this Special Issue.  Manuscripts must be submitted between January 2 – February 29, 2024, at https://www.editorialmanager.com/jobr. All submissions will go through the JBR regular double-blind review process and follow the standard norms and processes.

For more information on this call for a paper, please contact the Special Issue Editors.