, Volume 52, Issue 6, pp 847-877

Political Institutional Change, Obsolescing Legitimacy, and Multinational Corporations

Purchase on Springer.com

$39.95 / €34.95 / £29.95*

Rent the article at a discount

Rent now

* Final gross prices may vary according to local VAT.

Get Access

Abstract

  • This paper studies the practice of integration of influential host country actors to a multinational corporation as a strategy to decrease problems of legitimacy to the foreign firm before the host country’s society.

  • By developing the concept of obsolescing legitimacy, we argue that this strategy provides legitimacy to the foreign firm only in the absence of institutional changes at the macro-political level in the host country. Once these changes take place, an alliance by the multinational to an elite or a political system no longer ruling the host country will become a liability and will generate problems of legitimacy for the multinational.

  • We illustrate our argument with the case of the US multinational United Fruit Company in Central America.