NGOs Activism Against Firms in Varying Institutional Contexts: Is the Picture Portrayed by Vachani and Associates Complete?

Muhamamd Naeem; Anjeela Khurram*

Abstract:

Vachani and Associates (2009) examined the effect of NGOs activism on firms’ transaction costs in varying institutional contexts. These authors proposed that regions with higher institutional development level—e.g., North America, will have a higher number and efficacy of advocacy NGOs, leading to higher transaction costs for firms resulting from NGO pressures. Our work revisits and extends the theoretical framework as proposed by these authors by a) precisely specifying the types of NGO actors involved in activism against firms b) explaining the process through which NGOs increase transaction costs of the firms in North American region, for this we draw on mandatory adaptations perspective c) explaining why firms internationalize from North America region to South Asia region which is characterized by low institutional development level d) predicting that firms’ location decision in turn affect institutional development of the countries in the region.

research from:

• Foundation University - Faculty of Management Sciences

Year:

2019

Type of Publication:

Article

Journal:

Global Regional Review

Volume:

4

Number:

4

Pages:

336-349

Month:

9

DOI:

http://dx.doi.org/10.31703/grr.2019(IV-IV).37