Abstract:
The role of governments from emerging economies in the international activities of emerging market multinational enterprises has intensified significantly. In this study, I examine the role of federal and regional governments in Russian multinational enterprises’ internationalisation. In particular, I investigate how this relationship affects the ability of Russian MNEs to deal with domestic institutional complexity and gain external legitimacy. My theoretical framework is built upon institutional theory in the international business field, and borrows the notion of institutional interplay from political science. I employ a qualitative multiple-case study to examine the relationships between 12 Russian MNEs and the government, and the effects of these relationships on the MNEs’ domestic and international activities. Based on the findings, I demonstrate that Russian MNEs utilise four types of responses to institutional complexity—cooperation, manipulation, avoidance and adaptation—through institutional interplay and their relationship with the government. Further, the findings indicate that the relationship between MNEs and the Russian government can evolve across four different stages: collaborative, submissive, adversarial and collusive. I conclude that Russian MNEs are able to deal with domestic institutional complexity and gain external legitimacy by developing different types of relationships with the federal and regional governments and capitalising on their own organisational attributes. The link between MNEs’ responses to institutional complexity and external legitimacy provides theoretical contributions to institutional theory, and paves the way for future research exploring the influence of the relationship between MNEs and home government on MNEs’ domestic and international activities. In addition, my study offers practical implications for policymakers in Russia, Russian MNEs and foreign MNEs planning to invest in Russia.