Political Capital as a Spatially-Bounded Asset Location-specificity, Mobility and Firms’ International Strategies

We articulate the spatial dimension of political capital and the geographic scale of its impact on firms. We conceptualize political capital as a construct whose location-specificity and mobility over distance vary across different types, being of value for different internationalization strategies. Empirical testing of Russian firms shows that relationship-based political capital, whom firms know, loses value outside the home country, reducing international investment, whereas knowledge-based capital, what firms know, encourages international investment. The relationships are firm-specific and contingent upon firms’ industrial affiliation, their proprietary assets and country portfolios, turning the configuration of firms’ political capital into a potentially important competitive asset. Our theory offers a means to conceptualize the distinctive nature of political capital in the context of internationalizing firms