State-level Social Capital and MNCs ’ Competitive Political Resources

Previous studies have focused on the effects of dyadic intergovernmental relationships on firm behavior and performance. This study presents a network approach to intergovernmental relationships and examines two moderating effects at the state and firm levels. This study argues that firm-level competitive political resources are a function of the state-level social capital derived from the structural position in intergovernmental networks, the political institutions of home governments, and foreign experiences of multinational corporations (MNCs). State-level social capital arises from home governments’ positions in intergovernmental networks and offers information and control benefits to MNCs. This study hypothesizes that structural position in intergovernmental networks positively impacts MNC behavior. Moreover, it predicts that political institutions facilitate home governments to leverage their social capital for domestic MNCs. Furthermore, it indicates that MNCs with greater foreign experience utilize political resources more effectively. This study employs data on state-level trade networks and MNC asset procurements in the global mining industry to test these predictions and find support for the model.


Introduction
It is now well known that the structural patterns of firm-level network ties considerably impact the strategic choices and organizational outcomes of multinational corporations (MNCs) (eg., Ahuja, Soda, & Zaheer, 2012).This structural embeddedness view has been widely accepted in previous studies; however, MNCs are also embedded within broader social and political systems (Zukin & DiMaggio, 1990).The idea of political embeddedness refers to the situation in which powerful actors, especially national governments, formulate policies that create opportunities for and constraints on profit-making behavior of firms, thereby considerably influencing firm performance (Dacin, Ventresca, & Beal, 1999;Shaffer, 1995).
Governments are not only policy providers but also economic actors that provide competitive political resources (eg., Pearce, Dibble, & Klein, 2009).MNCs are not only governed and controlled by governmental policies and regulations but also actively seek to direct governmental actions to acquire competitive political resources (eg., Lux, Crook, & Woehr, 2011).These resources are defined as "any firm attributes, assets, human resources, or any other resources that allow the firm to use the political process to improve its efficiency and profitability" (Frynas, Mellahi, & Pigman, 2006, p. 324).
Studies that have adopted this approach have examined the effects of state-level factors on firm-level behavior and performances.For example, Rangan and Sengul (2009), in their analysis of dyadic relations between home and host countries, found that the performance of MNCs from a home country improves in a host country if the two countries have more common memberships of intergovernmental organizations, such as the World Trade Organization.Alcacer and Ingram (2013) found that joint membership of the same intergovernmental organizations promotes global economic transactions and foreign direct investment (FDI).
Following these studies, this study extends the literature on firm-level competitive political resources in several distinct directions.First, while previous studies have focused on the effects of dyadic relationships between two governments using measures of reciprocal resource exchange to assess firm behavior and performance, this approach limits exploration of effects such as bargaining power, which are created by relationships between "alters" in ego networks.The network approach, which captures structural positions in the overall patterns of connections between governments, is preferred because no dyad should be isolated from the structural influences of the overall intergovernmental networks.Second, this study presents moderating effects of competitive political resources that articulate ideas such as intergovernmental networks.Competitive political resources are a function of the state-level social capital, the political institutions of home governments, and MNCs' foreign experiences.Finally, this study focuses on state-level influences on asset procurement by MNCs.In some contexts, competitive advantages of MNCs derive from their access to rare and valuable natural resources, which may be a function of state facilitation and intervention both at home and in host countries.Predicting asset procurement, this study explicates the processes and mechanisms through which home governments' social capital is a source of competitive advantage for MNCs.
Therefore, this study theorizes competitive political resources.Moreover, it examines the manner in which home governments' social capital derived from their structural position in intergovernmental networks promotes asset procurement, such as natural resources, in host countries by MNCs and presents moderating effects of their competitive political resources.This study argues that home governments' positions in intergovernmental networks considerably influence asset procurement by the focal MNCs from others.Furthermore, the levels of intervention and involvement of home governments that offer competitive political resources differ according to their political institutions, and the effect differs depending on MNC's foreign experience.This paper employs data on the global mining industry from 1992 to 2007 to demonstrate that MNCs are politically and structurally embedded in broader social processes.

Intergovernmental Networks and Home Government Social Capital
Social capital refers to benefits acquired by actors from relationships in which they are embedded (Adler & Kwon, 2002).State-level social capital arises from home governments' positions in intergovernmental networks, and the relations make it possible for organizations to acquire flows of information.Of the various types of intergovernmental networks, such as co-membership of intergovernmental organizations and co-voting networks in international decision-making processes, this study focuses on home country trade networks.Trade is a primary indicator of the embeddedness of home governments in the global economy (Chase-Dunn, Kawano, & Brewer, 2000).Home country trade networks make it possible for countries to balance the general prices of commodities in domestic markets, acquire foreign financial capital, and exchange resources (e.g., products, energy) (Polillo & Guillén, 2005).Because these factors have both positive and negative effects on countries, they are motivated to provide strategic policies for trade (Spar, 2008).Trade globalization encourages nations to engage in trade regionalism, trade protectionism, export control, and controls on industrial competition (Polillo & Guillén, 2005).Governments establish trade policies that are beneficial and that reflect the economic direction of the country.Trade policies can be determined in terms of a bilateral or a multilateral relation (e.g., the European Union).These multilateral relationships have been studied in the context of intergovernmental organizations (IGOs) (Ingram & Torfason, 2010), which are defined as organizations that meet regularly, are formed by a treaty, and have three or more member states (Pevehouse, Nordstrom, & Warnke, 2004).Intergovernmental relations facilitate information and legitimacy flows, and provide opportunities for coordination among states to achieve a common goal (Hafner-Burton & Montgomery, 2006).
The analysis of home country trade networks is critical for the following reasons.First, countries in more advantageous positions in trade networks enjoy political stability and inhibition of domestic conflict, because the high degree of dependence of their entire economic systems upon current stable international relations increases the opportunity costs of political conflict and rebellions (Kinne, 2012).
Second, home country trade networks influence firm-level economic activities.Trade relations encourage foreign direct investment (FDI) between countries (Grosse & Trevino, 1996), which in turn causes positive spillover and negative crowding-out effects in host countries (Blomström & Kokko, 1998).By encouraging inward FDI, host countries can acquire benefits such as job creation and transfers of technology.
Third, research demonstrates that trade network structures account for significant proportions of the resources and information that flow among states (Sacks, Ventresca, & Uzzi, 2001).Home country trade networks promote the exchange of information concerning trade policy as well as economic, social, and political activities (Koka, Prescott, & Madhavan, 1999).Flows of one form of resources reinforce those of other forms, creating multiplex linkages between countries.Because such flows define inputs into countries' cultural systems, home country trade networks also shape their self-identity (Waters, 1995).Indeed, there are some correlations between positions in trade networks and adoption of business practices that diffuse across national borders (Weber, Davis, & Lounsbury, 2009).
In summary, when conceptualizing home governments' social capital, it is useful to focus on home country trade networks, because they have considerable influence on the strategic actions of MNCs.Trade networks are represented by a matrix that indicates the presence and volume of imports and exports between two countries.

Political Embeddedness and Asset Procurements by MNCs
An underlying premise of political resources is political embeddedness.The idea of embeddedness can be traced back to Polanyi's arguments that "the human economy, then, is embedded in institutions, economic and noneconomic" (Polanyi, 1957, p. 250).The structural embeddedness perspective is an offspring of Polanyi's idea in the sense that the structures of networks and social connections exert normative and behavioral influences on economic actors (e.g., Granovetter, 1985).The political embeddedness perspective is another offspring because it highlights the considerable influence of powerful actors such as governments on firm behavior and economic outcomes (Dacin et al., 1999;Zukin & DiMaggio, 1990).More specifically, this perspective views governments (1) as policy makers that complement the weaknesses of market systems, (2) as creators of rules and norms, and (3) as providers that allocate competitive political resources to firms such as MNCs in their countries (Baum & Oliver, 1991;Xin & Pearce, 1996).
MNCs' asset procurements are a form of FDIs.To conceptualize asset procurements by MNCs, this study presumes four actors in international businesses: (1) MNCs (i.e., the focal firms that procure assets), (2) home governments (i.e., governments of countries where the focal MNCs are based), (3) host governments (i.e., governments of host countries), and (4) host sellers (i.e., MNCs under host governments that divest themselves of assets).This paper argues that the level of competitive political resources that MNCs can procure is a function of (1) the social capital of MNCs' home governments, (2) the political institutions of MNCs' home governments, and (3) MNC's foreign experience.This study argues that that in a context such as the mining industry, in which access to physical natural resources is a major source of competitive advantage, the amount of competitive political resources is observable in the frequency of asset procurements from host governments or host sellers.

Governments' Interests and Interventions
Home governments support MNCs in their countries to promote outward FDIs by providing not only valuable knowledge, information, and intermediary services but also various forms of resources such as connections with government officials in host countries (Wang, Hong, Kafouros, & Wright, 2012).Types of institutional support that home governments can offer for outward FDI by MNCs include, but are not limited to, tax incentives, information provision via government agencies such as chambers of commerce, and making double taxation avoidance agreements with host governments (Luo, Xue, & Han, 2010).
Home governments provide such support for outward FDIs under two conditions.The first condition is that a country's economy is developed.Governments of developed economies tend to support outward FDI by MNCs, whereas those of emerging economies can either promote or impede inward FDI (Dunning, 1981).The second condition is that outward FDI entails transactions in industries on which national economic prosperity and security are highly dependent (e.g., raw materials and energy) and those in which host government expenditure plays a significant role (e.g., medical services).In particular, the support and interventions are more likely when MNCs from home governments' countries compete with those from other countries in pursuing business opportunities in or procuring assets from host governments' countries.Because losing the procurement "games" may harm related domestic industries (e.g., by causing shortages of critical resources), winning is a national-level concern.In that sense, home governments that cooperate with MNCs have a strong interest in enhancing national income and levels of social wellbeing by increasing their economic value (Forsgren, 2002).

Home Government Social Capital and Asset Procurement by MNC
Given that both home and host governments are interested in promoting or intervening in the FDI of MNCs, their level of social capital derived from intergovernmental networks may be significant in explaining the competitive political resources of MNCs.Home governments may have access to private information about host governments' or host sellers' assets, and have strong bargaining power to negotiate packages that are both profitable for MNCs and attractive to host governments.Such social capital may be an outcome of, and thus reflected in, their structural properties in intergovernmental networks.
State-level relationships, such as trade networks, shape flows of both transaction information, which is directly relevant to asset procurement by MNCs, and transaction-related information or contextual information about host countries' social support for MNCs, labor conflict, concern for the natural environment, and the development of social infrastructure and transportation systems.Particular positions in the networks offer home governments informational and control benefits, which MNCs in those countries can reap.
Of the several structural network properties of higher-level actors, this study focuses on network efficiency, which is a social capital measure of structural holes and nonredundancy of contacts in networks (Burt, 1992: 20).Network efficiency of an ego is higher when its alters have fewer linkages among them, so information circulating in its egocentric networks tends to be nonredundant (i.e., information benefit).In addition, the lack of linkages between the alters enables the ego to play off them, increasing the ego's greater bargaining power (i.e., control benefit).
Home country trade network efficiency provides heterogeneous transaction-related information and increases the bargaining power of actors with higher network efficiency.Heterogeneous transaction-related information circulating in home country trade networks enables MNCs to predict supply-demand balances.Such predictions are typically complicated and require combinatory knowledge from various sources, and high network efficiency allows such information to be gathered.Such predictions are also important in understanding economic, social, and political stability in host countries, and in reducing the uncertainty of the transactions for MNCs.Heterogeneous transaction information enables MNCs to access information on a wide range of others' transactions, such as prices paid by rival MNCs for procuring assets, which is useful for predicting markets as well as pricing assets in competitive bids.
In addition, home country trade network efficiency provides MNCs with bargaining power, which allows them to negotiate packages that are economically reasonable.If MNCs simultaneously consider multiple potential destinations in countries that seek inward FDI and do not have trade relations with each other, home governments with high network efficiency may allow the potential host countries to compete and create environments that support and favor MNCs (e.g., in terms of labor issues and social infrastructure).High network efficiency allows MNCs to play off the potential host countries, develop deals that are unilaterally favorable, and thereby facilitate asset procurement.
Because home governments and MNCs are interdependent, home governments occupying valuable trade network positions provide them with similarly valuable resources.Therefore, MNCs with home governments with higher trade network efficiency are more likely to procure assets.
Hypothesis 1: Home country trade network efficiency positively influences the likelihood that MNCs will procure assets.

Home Government Political Institutions and MNCs' Experience
Bucheli and Aguilera (2010) suggest two forms of political institutions or characteristics of governmental systems: democratic and autocratic.Democracy refers to a political regime that allows free and fair elections, the right of citizens to vote and compete for public office (Dahl, 1998).In contrast, autocracy refers to a regime that does not allow competitive elections, has a single leader or small ruling clique, and places legal limitations on pluralism (Li, 2009;Linz, 2000).Autocratic governments do not allow competitive elections, so their lack of substitutability increases MNCs' dependence upon them.In contrast, MNCs under democratic governments can choose to utilize competitive political resources that their governments offer.Although both autocratic and democratic governments are motivated to provide competitive political resources for MNCs because procuring mining assets has a critical influence on national economies, the possibility of choice by MNCs under democratic governments may weaken the association proposed in hypothesis 1.Hence, this study predicts: Hypothesis 2: The positive relationship between home country trade network efficiency and procurement of assets is stronger for MNCs in autocratic states than in democratic states.
MNCs develop, modify, and update routines for quickly and effectively adapting to host countries' local environments through the accumulation of foreign experiences (e.g., Johanson & Vahlne, 2009).For instance, the literature on firms' location choices in foreign markets has argued that a firm's experience in a host country influences that firm's subsequent entry behaviors (e.g., Henisz & Delios, 2001).Previous experience in a host country makes it possible to establish a firm's routine when adapting to the host country's environment.This paper argues that firms' foreign experiences make it possible for them to acquire information benefits from states more effectively.The longer a firm's experience in a host country, the greater that firm's absorptive capacity to utilize the benefits stemming from the home country's trade network (Cohen & Levinthal, 1990).From the state's viewpoint, governments are more likely to exchange information with substantially experienced firms to help them acquire valuable outcomes for firms and the state.Therefore, the effect of home country trade network efficiency on firms differs depending on a firm's previous foreign experiences.
Hypothesis 3: The positive relationship between home country trade network efficiency and procurement of assets is stronger for MNCs longer foreign experience.

Research Setting
To test the hypotheses proposed above, this study focuses on the global mining industry.Buyers and sellers of mines in this industry (i.e., MNCs, host sellers, and host governments) are highly globalized because they typically have interests in mines all over the world.For example, in 2012, interests in the Phoenix nickel mine in Botswana were shared among Anglo-American (43%), LionOre International Mining (42%), and the state of Botswana (15%).
MNCs purchasing rights for mines face a multitude of risks.In addition to the typical burdens of FDI, there are risks inherent to this industry.The first risk arises from the political instability of host governments.Host governments attempt to retain their metal resources from underground mines by establishing strict policies and regulations for MNCs, causing a movement toward resource nationalism and instability (Click & Weiner, 2010).Second, both frequent labor problems and natural environmental problems increase the risks in this industry.Third, market instability in the prices of primary metals on the London Metal Exchange poses further risks to firms.Prices reflect the balance between supply and demand for metals in international markets.Price volatility has quite a strong influence on break-event points and MNCs' investment decisions.In the 1990s, prices were low and stable.The rise in metal prices around the year 2003 and the decline around 2007 were mainly due to increased or decreased demand from developing countries such as China.Market demand fluctuates with the global macro economy.Strong demand increases resource holders' potential profits and motivates host governments to intervene in mining transactions.MNCs cope with these contingencies by collecting information about host countries' economic, social, and political conditions as well as the long-term balance of supply and demand for mining products.
There are three major types of metals in this industry: (1) base (e.g., copper), ( 2) noble (e.g., gold), and (3) rare (e.g., platinum) metals.Historically, the supplies of base and noble metals have been stable, but the demand has been soaring.On the other hand, regardless of recent increases in demand, the supplies of rare metals have been limited because of the difficulty of exploiting mines.Mines for rare metals are located only in a limited number of regions.Unlike the base and noble metals used for commodities, rare metals are used for military and high-tech products.
Ownership of mines frequently changes among MNCs, host sellers, and host governments via competitive bidding, but in some cases buyers and sellers negotiate private deals.For example, in 2006, Gold Field purchased a 50 percent interest in the South Deep Mine in South Africa from Barrick Gold via competitive bidding, beating Harmony Gold Mining.Even in the case of competitive bidding, price is only one element of negotiation packages, which also include access to MNCs' mining technology, labor practices, and environmental policies.

Data and Sample
This paper compiled the data for this study from the database published by the Raw Materials Group, which collects data on the mining industry through an annual survey of mining companies worldwide.My sample covers 938 mines, accounting for approximately 53 percent of the world's metal production.The annual number of procurements of assets from 1985 to 2012, clearly illustrating the high frequency of asset procurement in the early 1990s and the sharp declines around 2007.Therefore, to reveal the longitudinal dynamism of this industry, this study sets the observation period of the study as 1992 to 2007.
My sample consists of 1013 buyers of mines (i.e., MNCs and government-sponsored organizations), and it included data from 1992 to 2007.This study excluded buyers that were purely financial institutions, governmental organizations and those without state-level data.As a result, the final sample provided 6366 data points with "MNC-year" as the unit of analysis.The average number of actors during the observation period is 398.

Dependent Variables
This study takes the view that MNCs procure assets when they acquire interests in mines owned by host sellers or host governments.Each mine extracts a particular metal.The Raw Materials Group data include 20 metals, which are classified into three groups: base metals (copper, zinc, tin, and lead), noble metals (gold and silver),

Moderators
This study tested effects of two moderators.First, this study included a variable that characterizes the political institutions of home governments, which this study obtained from the Polity IV Project.This variable ranges from -10 (i.e., autocratic governments) to 10 (i.e., democratic governments).To test the hypothesis about foreign experience, this study created MNCs' experience by measuring the duration of MNCs' foreign operations.

Control Variables
This study included three groups of control variables: firm, industry, and state-level characteristics.First, as a measure of MNCs' assets, this study included the number of mines in each year.This study counted the number of markets in which MNCs operate to control for their degree of diversification.This study included MNCs' production volumes measured in metric tons.This is an appropriate size measure for this industry, where mines are the primary assets of firms.To control for competition within the industry, this study constructed rivals, which indicates the average number of rivals in each of the markets where the MNCs operate.For example, assuming that an MNC operates in two markets in which there are 50 and 100 rivals, the value of this variable is 75.In addition, to control for MNCs' past behavior, this study took the number of acquisitions in the previous seven years.This study limited the range of observations to the previous seven years because of the limited accessibility of old data.Furthermore, this study included age of mines that MNCs possess.Moreover, to control for the characteristics of domestic markets, this study included the number of domestic firms, and relative size of the domestic market, which is the production-volume ranking of MNCs in home countries.This study coded the smallest MNC in home countries as 1.These two variables illustrate the relationships between MNCs and their home governments because larger MNCs pay more attention to government policies (Chong & Gradstein, 2010).Finally, to control for existing assets and strategy, this study included the percentage of base metal mines, percentage of noble metal mines, and percentage of rare metal mines as proxies for MNCs' mine portfolios.
As the industry-level control variable, this study included metal price level on the London Metal Exchange, which this paper adjusts as price change relative to 1991 prices.
This study included each country's GDP obtained from the World Bank as a state-level control variable.This study also included material strength.This paper used data from the Composite Indicator of National Capability (CINC).This index was developed by the Correlates of War project (Singer, 1987), using data on military expenditure, military personnel, energy consumption, iron and steel production, urban population, and total  (Pevehouse et al., 2004).This study coded this variable as 1 if a country is a member of these IGOs, and 0 otherwise.

Analysis
This study measured the number of asset procurements by the acquisition of mining interests.Although a Poisson regression can be used for such estimations, the model assumes that the conditional variance of the dependent variable is the same as its mean.Therefore, this study used a negative binomial model to test hypotheses.The fixed-effect models omit observations that have variables with no time variance and thus cause selection biases, so this study used a random-effects model (Shipilov, Greve, & Rowley, 2010).The random-effects model assumes that time-invariant effects are not correlated with independent variables; thus, this study avoided the problem of contemporaneous correlation in the estimation by including year dummy variables (Polidoro, Ahuja, & Mitchell, 2011).This study used STATA14 and estimate the random-effects negative binomial model using the "xtnbreg" command with the "re" option.

Results
Table 1 summarizes the statistics and correlations of the variables.Although some correlation coefficients between the dependent and control variables are relatively high, the mean of the variance inflation indicator (VIF) is 2.88.Hence, this study took no remedial action for multicollinearity.This study incorporated hypothesis testing variables in Model 2 and found that the home country's trade network efficiency is positively associated with the number of mining interests acquired by MNCs (p < .001).The results support Hypothesis 1. Model 3 tests hypotheses 2 and 3.In Hypothesis 2, this study predicted that the effects of the home country's trade network efficiency on the likelihood of obtaining mining interests are stronger for MNCs in home countries with autocratic governments.The coefficient of the interaction term between network efficiency and political institutions is not significant.Hypothesis 3 posits that the relation between the home country's trade network efficiency and number of mining interests acquired differs depending on MNCs' foreign experiences.Model 3 supports Hypothesis 3, indicating that the coefficient for the interaction term is positive and significant (p < .10).
Although the dependent variables in Models 1-3 count the number of procurements of any type of mine, this study recalculated the dependent variables and predicted procurements of base and noble mines in Model 4 and those of rare mines in Model 5.This finer-grained operationalization is preferable because of the significant market differences between the two metal markets.Model 4 presents results consistent with Hypothesis 3 (p < .05),and this paper found support for Hypothesis 2 (p < .01) in Model 5.
As a robustness check, this study conducted additional analyses and used alternative trade network efficiency scores to test the hypotheses.Instead of the presence of any import or export between two countries, this study used "trade strength" between the two countries to create trade network matrices.Suppose countries X and Y have trade relations.This study first computed X's trade strength with Y's by taking the summation of the ratios of X's imports from Y to X's overall imports and those of X's exports to Y to X's overall exports.This study computed Y's trade strength in a similar way to obtain the "trade strength" between X and Y by taking the average of the two measures.
Table 3 reports the results using this alternative measure of trade network efficiency.This study found results essentially similar to those reported above.Furthermore, this study changed the thresholds to the top 75 percent of countries in terms of trade strength and found similar results.Hence, my results are robust even when this study adopts alternative measures of network efficiency that incorporate information about the relative volumes of trade.

Discussion and Conclusion
This study has theorized competitive political resources that explain asset procurement by MNCs.This study examined ways in which structural positions of home countries in intergovernmental networks (i.e., their social capital) enable MNCs to procure assets in host countries.Further, this study proposed moderating effects that strengthen or weaken this network effect.This study analyzed data on the global mining industry from 1992 to 2007 together with data on trade networks and found substantial support for my predictions.
First, this study showed a positive effect of home government network efficiency on asset procurement by MNCs.Second, it also showed state-and MNC-level factors that moderate the relation between home government network efficiency and asset procurement by MNCs.The causal relation between intergovernmental network efficiency and asset procurement is stronger for MNCs in autocratic governments for rare metal asset procurements.The scarcity of rare metals increases the role of political embeddedness of MNCs in procuring such mines.Furthermore, this study showed that the positive effect of intergovernmental network efficiency on asset procurements is stronger for MNCs with greater foreign experience.
This study advances our understanding of competitive political resources in several ways.First, this study extended the scope of analysis beyond dyadic relations between governments (Rangan & Sengul, 2009) and focused on the structure of intergovernmental networks to explicate state-level social capital.In addition, this study partially adopted a multi-level approach in the sense that it predicts the effects of intergovernmental networks on corporate behavior.My efforts should be complemented by future research that uses complete data on state-level and firm-level networks in which MNCs are embedded.Second, this study showed two moderating effects: political institution and MNC's foreign experience.These findings suggest that firm-level competitive political resources are a function of state-level social capital derived from the structural position in intergovernmental networks, the political institutions of home governments, and MNC's foreign experiences.
Third, this study explained the processes and mechanisms of MNCs' competitive advantages derived from competitive political resources by focusing on their asset procurement behavior.The resource-based view of the firm presumes that firms, as bundles of resources, gain competitive advantage when they have resources that are valuable, rare, inimitable, and congruent with organizational systems (Barney, 1991).A firm's competitive advantage is sometimes measured relative to market performance (e.g., return on assets relative to industry average), whereas the asset procurements used in this study should be a more direct measure of firms' access to resources.In particular, in my empirical contexts, where firms compete to possess mines, my findings about state-level social capital speak directly for their competitive advantage.
In an analysis that this study did not report here for space, this study found that home governments' degree of closeness centrality, which represents structural power in intergovernmental networks or the amount of visibility and attention that the countries garner, significantly impacts MNCs' asset procurement.This finding is reasonable because asset procurements in this context are partial outcomes of negotiations, power games, and political struggles between home and host countries.Network centrality may certainly increase bargaining power, but findings based on network efficiency, which relies on the notion of structural holes, are preferable because they represent both information and control benefits.
My findings have some managerial implications.The findings legitimate MNCs' activities to influence governmental policies through lobbying and monetary donations (eg., Hillman, Keim, & Schuler, 2004).Given the significance of home governments' network efficiency, such activities influence the distributions of competitive political resources among MNCs operating in home countries.In addition, asset procurements are not unilateral decisions made by buyer MNCs but bilateral agreements between seller and buyer MNCs.Hence, managers need to understand how sellers' governments are embedded in intergovernmental networks because their efficiency may influence access to information and bargaining power.
This study suggests three directions for future research.First, it focused only on home country trade networks as representing intergovernmental networks.Future research should consider alternative forms of intergovernmental networks, such as joint membership of IGOs (Rangan & Sengul, 2009).Second, this study exclusively focused on network structures but did not consider dyadic governmental relationships.Future research should consider both influences simultaneously.Finally, future research should examine other outcomes of network efficiency in intergovernmental networks and explore how MNCs can benefit from state-level social capital.
This study has several limitations.First, this study did not consider how each asset procurement influences MNCs' subsequent procurements.Second, this study has limited access to the financial performance data of MNCs, so the consequences of asset procurement in terms of performance are still unknown.Third, this study lacks data about the domestic political ties between MNCs and their home governments, which is another approach of political resources (e.g., Faccio, 2006).Because previous research has already indicated this effect, the lack of a test does not undermine the contribution of this study; however, empirical tests would be more comprehensive with the additional data.Finally, the generalizability of our findings is one of the limitations because this study specifically focused on the global mining industry.
Regardless of these limitations, this study theorized how MNC behavior is politically and structurally embedded in broader social systems.Furthermore, it provided valuable contributions to the literature on political embeddedness, state-level social capital, and intergovernmental networks.This work not only adds new insights to the current literature but also offers new opportunities for future research. Figur . A country with a higher score should have a government with greater material strength.Finally, joint membership of IGOs encourages resource flows among those members; thus, this study included this variable to record membership of the WTO, EU, NAFTA, and ASEAN population

Table 1 .
Descriptive statistics and correlationsTable2provides the maximum likelihood estimates of the random effects negative binomial models, estimating the acquisition of mining interests from 1992 to 2007.This study included only control variables in Model 1. Model 2 tests the main effects proposed in the hypothesis section.Model 3 estimates the moderating effects.