Corporate Variables, Intervention, and the Instability of Bargaining Relationship

Corporate Variables, Intervention, and the Instability of Bargaining Relationship

  This paper develops a theoretical framework for instability of bargaining relationship in a bargaining power perspective. The key argument is that the instability of bargaining relationship between host governments and foreign firms is associated with shifts in bargaining power. In addition, the relative bargaining power of two parties changes over time as a result of their learning, performance, and environmental changes. The bargaining power of foreign firms (host governments) will be negatively (positively) related to the level of host government regulation. The positive relationship between bargaining power and regulation will become weaker with increasing political behavior.