Political ties to a ruling regime can flip from asset to liability overnight

Evidence

Up to now, only a few studies have been directed on the potential negative implications of CPA. For instance, Bonardi (2004) dealt with CPA strategies of former monopolies which had a negative influence on their international growth performance. Frynas and Mellahi (2003) analyzed firm-specific political risks of transnational corporations. Siegel (2007) in his study of South Korean enterprises found that elite sociopolitical network ties to the regime in power can quickly change between liability and asset for firms which depend on political activities, for example, in cross-border strategic alliances. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 354

Categorization

• XREF: Echoes the volume’s core theme that relational/network assets are contingent and historically fragile, not durable endowments.
• SEED: Angle: ‘The regime-risk premium’ — why corporate lobbying relationships are depreciating assets that markets systematically misprice.