Navigating Politically Unstable Environments: A Review of Multinationals’ Internationalization Strategy Research

Abstract This study reviews the current state of research on the relations between the political environment and firms’ internationalization strategies (IS). We systematically analyze 95 relevant articles from fifteen top journals in the fields of international business and management over the past 31 years (1990–2021) and develop an integrative framework that discusses the impact of multilevel political factors affecting firms’ IS via diverse theoretical mechanisms. Specifically, we categorize the political environment into five levels: supranational and international, national, sub-national, industry, and firm levels, and identify five main theoretical frameworks: institutional theory, resource-based view (RBV), agency theory, resource dependency theory, and transaction cost economics (TCE). These categories allow us to contextualize the political environment in which four main themes (entry mode, location choice, scope, and performance) related to IS research are explored. Based on this review, we provide a full picture of political impact on firms’ IS and identify the inconsistent findings, research gaps, and debates in the literature, highlighting value-adding avenues for future research.