PEER-REVIEWED PUBLICATIONS
Listed in reverse chronological order, with most recent peer-reviewed publications on top.
Geopolitical Volatility and Subsidiary Investments
Gilbert Kofi Adarkwah, Sinziana Dorobantu, Chirstopher Albert Sabel, Flladina Zilja
Strategic Management Journal, 2024.
Gilbert Kofi Adarkwah, Sinziana Dorobantu, Chirstopher Albert Sabel, Flladina Zilja
Strategic Management Journal, 2024.
ABSTRACT: We examine how geopolitical volatility—the instability of bilateral political affinity between countries—affects foreign subsidiary investments. Building on prior work that shows that the level of political affinity between countries facilitates foreign investments, we argue that the volatility of political affinity impedes firms' ability to form expectations about stakeholder behavior and reduces subsequent investments in subsidiaries. We further argue that the effect of volatility of political affinity on foreign subsidiary investments is less pronounced when the level of political affinity between countries is high and when the firm has strong political connections at home. Our analyses examine 1054 US firms and their subsidiary investments in 106 countries from 2000 to 2015.
Firm–Stakeholder Dialogue and the Media: The Evolution of Stakeholder Evaluations in Different Informational Environments
Sinziana Dorobantu, Witold Henisz and Lite J. Nartey
Academy of Management Journal, 2024. Vol 67(1): 92-125.
Sinziana Dorobantu, Witold Henisz and Lite J. Nartey
Academy of Management Journal, 2024. Vol 67(1): 92-125.
ABSTRACT: We propose that the informational environment in which firm–stakeholder interactions are embedded shapes the effect of firm–stakeholder dialogue on a stakeholder’s evaluation of a firm. How much stakeholders know about a firm (information availability), what stakeholders know about a firm (information content), and how much they trust the media that informs them (information reliability) vary across countries, firms, and time. We theorize and assess how these three dimensions of the informational environment shape the effects of firm–stakeholder dialogue on the evolution of a stakeholder’s evaluation of a firm differ across them. We illustrate our arguments with insights from field interviews conducted to understand stakeholders’ evaluations of the Rosia Montana gold mine in Romania, and we analyze them using original, manually coded stakeholder-level data that captures 2,454 stakeholders’ evaluations of 26 gold-mining operations around the world.
Overcoming political risk in developing economies through non-local debt
Jakob Muellner and Sinziana Dorobantu
Journal of International Business Policy, 2023. Vol 6: 159-181.
Jakob Muellner and Sinziana Dorobantu
Journal of International Business Policy, 2023. Vol 6: 159-181.
ABSTRACT: Infrastructure investments are essential in generating sustainable development but also involve extensive political risk and potentially unreliable local partners. We study how banks financing such investments use syndication with non-local partners to pool economic leverage from trade, investment, and FDI. Using 5928 of the world’s largest infrastructure and energy projects in 160 countries between 2000 and 2013, we show that banks pool economic leverage from banks with dominant economic ties to the host country and from supranational institutions. Our findings contribute three distinct elements to the nonmarket strategy literature. First, they highlight the strategic value of macro-economic dependencies in the management of political risk. Second, our study positions non-local alliances as an alternative to alliance partners in the host-country context. Third, our study acknowledges the value of debt-side pooling of leverage. From a practical and policy point of view, our findings suggest that practitioners and policymakers should strive to improve the efficiency of debt syndication across borders as a means of mitigating political risk and encouraging infrastructure investment.
Reciprocity in Firm Stakeholder Dialogue: Timeliness, Valence, Richness and Topicality.
Lite Nartey, Witold Henisz and Sinziana Dorobantu
Journal of Business Ethics. 2022. 183: 429–451.
Lite Nartey, Witold Henisz and Sinziana Dorobantu
Journal of Business Ethics. 2022. 183: 429–451.
ABSTRACT: Scholars of stakeholder management have long grappled with the question of how to communicate with stakeholders to enhance cooperation and reduce conflict. We build on insights from the literature on stakeholder dialog to highlight the importance of four elements of firm–stakeholder dialog processes: timing, valence, richness, and topicality of firms’ responses to stakeholder engagements. We demonstrate a link between these elements of the firm–stakeholder dialog process and changes in stakeholder cooperation or conflict with the firm, as well as contingent tradeoffs among them. Specifically, we show that the relative importance of these elements is contingent upon stakeholder type and status. Government actors prioritize richness and topicality over timeliness and valence. Economic actors, by contrast, prioritize timeliness and valence. Civil society stakeholders prioritize timeliness, valence, and topicality over richness. Low-status actors across sectors deprioritize topicality and richness while high-status actors demand attentiveness to all four elements.
Contracting Beyond the Market
Kate Odziemkowska and Sinziana Dorobantu.
Organization Science, 2021. Vol 32(3): 776-803.
Kate Odziemkowska and Sinziana Dorobantu.
Organization Science, 2021. Vol 32(3): 776-803.
ABSTRACT: Despite growing engagements between firms and nonmarket stakeholders—such as local communities and nongovernmental organizations—research has yet to examine the emergence of formal contracts between them. Given that a very large number of such contracts are theoretically possible but only a small number exist, we seek to understand what factors explain the use of contracts to govern some relationships between firms and nonmarket stakeholders but not others. We draw on transaction cost economics (TCE) to study transactions wherein a nonmarket stakeholder provides a firm access to a valuable resource and to understand when these transactions are governed by formal contracts. We propose that, when a firm makes site-specific investments, a stakeholder’s use rights to the resource sought by the firm, the negative externalities generated by its use, and the stakeholder’s capacity for collective mobilization, increase holdup risk for the firm and therefore the probability of a contract. We collect novel data on the location of indigenous communities and mines in Canada to identify a plausible exhaustive set of indigenous communities “at risk” of signing a contract with a mining firm. We test our hypotheses by relying, respectively, on historically assigned property rights over lands, the mine-community colocation in a watershed and proximity on transportation routes, and archival records of community mobilization events. We find support for our propositions by examining which of the 5,342 dyads formed by 459 indigenous communities and 98 firms signed 259 contracts between 1999 and 2013.
Political Risk and Alliance Diversity: A Two-Stage Model of Partner Selection in Multipartner Alliances
Sinziana Dorobantu, Thomas Lindner and Jakob Muellner
Academy of Management Journal, 2020. Vol.63(6): 1775–1806.
Sinziana Dorobantu, Thomas Lindner and Jakob Muellner
Academy of Management Journal, 2020. Vol.63(6): 1775–1806.
ABSTRACT: We examine how the political risk influences partner selection in multipartner alliances and consequently their diversity. We propose a two-stage theoretical model—first, a lead firm is selected to lead the alliance; second, the lead firm selects other partners—and we argue that political risk affects both stages. In the first stage, firms with knowledge of and influence in the project country are selected to lead projects in countries with high political risk. In the second stage, the lead firm selects a group of partners with knowledge and influence to ensure that the alliance—as a whole—has the resources needed in such countries. We also show, as a corollary, that the imperative to find these resources drives the lead firm to work with more-diverse multipartner alliances despite the higher coordination costs involved. We test our hypotheses by analyzing, first, the selection of the lead firm in 1,044 multipartner banking syndicates that financed some of the world’s largest infrastructure projects in 68 countries between 2003 and 2012. Controlling for the lead firm, we then examine how political risk affects the selection of other partners in the multipartner alliance by comparing the realized syndicates with over 33,000 counterfactual (unrealized) multipartner syndicates.
Debt-Side Governance and the Geography of Project Finance Syndicates
Sinziana Dorobantu and Jakob Muellner
Journal of Corporate Finance, 2019. Vol. 57: 161-179.
Sinziana Dorobantu and Jakob Muellner
Journal of Corporate Finance, 2019. Vol. 57: 161-179.
ABSTRACT: We build on Williamson’s (1988) emphasis on debt as a mechanism of governance to argue and show that the geographic composition of banking syndicates financing infrastructure investments is driven in part by the level of host-country (i.e. local) political risk and, in part, by the level of systemic risk in global financial markets. Geographically dispersed syndicates pool more external leverage over host-country stakeholders, allowing them to mitigate host-country political risk, but are also more difficult to reorganize internally if circumstances demand it. We therefore propose that the geographic composition of a syndicate reflects a trade-off between the syndicate’s external political leverage and its ability to reorganize internally. Using data on 5,928 large-scale infrastructure projects in 160 countries, we show that syndicates are more geographically dispersed when an investment is exposed to high levels of political risk in the host country. We also identify systemic risk in lending markets as an impediment to creating such debt-side governance, and show that syndicates are more geographically concentrated when they finance projects in years with increased systemic risk.
Status Climbing vs. Bridging: Multinational Stakeholder Strategies
Lite Nartey, Witold Henisz and Sinziana Dorobantu
Strategy Science, 2018. Vol. 3(2): 367–392.
Lite Nartey, Witold Henisz and Sinziana Dorobantu
Strategy Science, 2018. Vol. 3(2): 367–392.
ABSTRACT: Multinational corporations seeking to overcome the “liability of foreignness” through partnerships with stakeholders in their overseas markets face an important tension in choosing between two alternative strategies. Firms who build relationships with high-status local stakeholders may experience increased cooperation and reduced conflict with other stakeholders. However, the short-term benefits of this status climbing strategy may be difficult to sustain because stakeholders with low-status, particularly those outside the formal political structure, are more likely to increase their conflict as the firm becomes increasingly distant from them. An alternative strategy of bridging structural holes in the host country stakeholder network also faces theoretical limits as access to scarce information and resources is likely to engender conflict with other stakeholders. The status climbing strategy is more attractive where insider connections dominate (i.e., the rule of law is weak) while the bridging strategy is more attractive in countries with stronger rule of law. In other words, we show that as the rule of law strengthens, multinational entrants focus more on what they know rather than whom they know. Our analyses use a hand-coded data set of almost 52,000 media-reported stakeholder interactions that capture the network of relationships among 4,623 stakeholders from 19 gold-mining companies operating 26 mines in 20 countries, and the evolution of these networks from 1993 until 2008.
Valuing Stakeholder Governance: Property Rights, Community Mobilization and Firm Value
Sinziana Dorobantu and Kate Odziemkowska
Strategic Management Journal, 2017. 38(13): 2682-2703.
Sinziana Dorobantu and Kate Odziemkowska
Strategic Management Journal, 2017. 38(13): 2682-2703.
ABSTRACT: While research has shown that good stakeholder relations increase the value of a firm, less is known about how specific types of stakeholder governance affect firm value. We examine the value of one such governance mechanism—community benefits agreements (CBAs) signed by firms and local communities—intended to minimize social conflict that disrupts access to valuable resources. We argue that shareholders evaluate more positively CBAs with local communities with strong property rights and histories of institutional action and extra-institutional mobilization because these communities are more likely to cause costly disruptions and delays for a firm. We evaluate these arguments by analyzing the cumulative abnormal returns associated with the unexpected announcement of 148 CBAs signed between mining companies and local indigenous communities in Canada.
Not All Sparks Light a Fire: Stakeholder and Shareholder Reactions to Critical Events in Contested Markets
Sinziana Dorobantu, Witold Henisz and Lite Nartey
Administrative Science Quarterly, 2017, Vol. 62, issue 3, pages 561-597.
Sinziana Dorobantu, Witold Henisz and Lite Nartey
Administrative Science Quarterly, 2017, Vol. 62, issue 3, pages 561-597.
ABSTRACT: This paper examines when and how a critical mass of social and political stakeholders mobilizes against a corporate organization, and the impact of such mobilization on the value of the organization. We examine the conditions and dynamics that explain whether an isolated, stakeholder-initiated negative statement or action – a “spark” – goes unnoticed or escalates into a cascade of stakeholder reactions targeting the firm. We argue and show empirically that both stakeholders’ and shareholders’ reactions following critical events are largely influenced by stakeholders’ prior beliefs about the target organization and by the reactions of peer stakeholders to the critical event. We test these arguments using a dataset of more than 51,000 media-reported events describing the interactions between 2,293 political, social and economic stakeholders and 19 publicly-traded gold mining firms operating 26 mines around the world.
Non-Market Strategy through the Lens of New Institutional Economics: An Review and Future Directions
Sinziana Dorobantu, Aseem Kaul and Bennet Zelner
Strategic Management Journal, 2017. 38(1): 114-140.
Sinziana Dorobantu, Aseem Kaul and Bennet Zelner
Strategic Management Journal, 2017. 38(1): 114-140.
ABSTRACT: We use a novel theoretical framework to synthesize ostensibly disparate streams of non-market strategy research. We argue that faced with weak institutions, firms can create and appropriate value by either adapting to, augmenting, or transforming the existing institutional environment, and can do so either independently or in collaboration with others. We use the resulting typology of six distinct non-market strategies to provide an integrative review of non-market strategy research. We then extend this framework to examine the choice between non-market strategies, arguing that this choice depends upon whether the existing institutional environment is incomplete or captured, and discussing other drivers of non-market strategy choice, the relationship between these strategies, and their social impact, so as to provide an agenda for future research.
Spinning Gold: The Financial Returns to Stakeholder Engagement
Witold Henisz, Sinziana Dorobantu and Lite Nartey
Strategic Management Journal, 2014. 35(12): 1727-1748. (Lead article)
Witold Henisz, Sinziana Dorobantu and Lite Nartey
Strategic Management Journal, 2014. 35(12): 1727-1748. (Lead article)
ABSTRACT: We provide direct empirical evidence in support of instrumental stakeholder theory's argument that increasing stakeholder support enhances the financial valuation of a firm, holding constant the objective valuation of the physical assets under its control. We undertake this analysis using panel data on 26 gold mines owned by 19 publicly traded firms over the period 1993–2008. We code over 50,000 stakeholder events from media reports to develop an index of the degree of stakeholder conflict/cooperation for these mines. By incorporating this index in a market capitalization analysis, we reduce the discount placed by financial markets on the net present value of the physical assets controlled by these firms from 72 percent to between 37 and 13 percent.
OTHER PUBLICATIONS
Stakeholder Governance: Aligning Stakeholder Interests on Complex Sustainability Issues
Sinziana Dorobantu, Abhishek Gupte and Sam Yuqing Li
Handbook on the Business of Sustainability, Forthcoming. Edited by Gerard George, Martine Haas, Havovi Joshi, Anita McGahan, and Paul Tracey.
ABSTRACT: Academic research on sustainability has grown at an impressive pace over the past
three decades. Scholars have offered important insights into the drivers of firms’ adoption of
sustainability policies and practices, while also highlighting some of the factors that impede
adoption in firms around the world. Our brief review of this research reveals an important
emerging theme: while firm-level efforts to become more sustainable are increasing and
welcome by many of their stakeholders, the impact of these efforts is limited. Firms tend to adopt
sustainability policies and practices when the interests of (most of) their stakeholders are aligned.
Increased recognition of “win-win” situations has driven most sustainability initiatives in
different industries. Yet, stakeholder interests are rarely aligned on very complex sustainability
issues. Thus, when facing such complex issues, firm-level efforts to address them are largely
symbolic or limited in scope, and so is their impact. We argue that stakeholder
governance—formal and informal rules and norms that allow firms and their stakeholders to
align incentives through jointly designed rules to coordinate, monitor, and sanction behavior—is
necessary to address complex issues. We suggest that future research seeks to understand the
emergence and the effectiveness of various types of stakeholder governance.
Sinziana Dorobantu, Abhishek Gupte and Sam Yuqing Li
Handbook on the Business of Sustainability, Forthcoming. Edited by Gerard George, Martine Haas, Havovi Joshi, Anita McGahan, and Paul Tracey.
ABSTRACT: Academic research on sustainability has grown at an impressive pace over the past
three decades. Scholars have offered important insights into the drivers of firms’ adoption of
sustainability policies and practices, while also highlighting some of the factors that impede
adoption in firms around the world. Our brief review of this research reveals an important
emerging theme: while firm-level efforts to become more sustainable are increasing and
welcome by many of their stakeholders, the impact of these efforts is limited. Firms tend to adopt
sustainability policies and practices when the interests of (most of) their stakeholders are aligned.
Increased recognition of “win-win” situations has driven most sustainability initiatives in
different industries. Yet, stakeholder interests are rarely aligned on very complex sustainability
issues. Thus, when facing such complex issues, firm-level efforts to address them are largely
symbolic or limited in scope, and so is their impact. We argue that stakeholder
governance—formal and informal rules and norms that allow firms and their stakeholders to
align incentives through jointly designed rules to coordinate, monitor, and sanction behavior—is
necessary to address complex issues. We suggest that future research seeks to understand the
emergence and the effectiveness of various types of stakeholder governance.
The Implications of COVID-19 for Nonmarket Strategy Research
Thomas C. Lawton, Sinziana Dorobantu, Tazeeb S. Rajwani, and Pei Sun
Journal of Management Studies, 2020. 57(8): 1732-1736.
Thomas C. Lawton, Sinziana Dorobantu, Tazeeb S. Rajwani, and Pei Sun
Journal of Management Studies, 2020. 57(8): 1732-1736.
DESCRIPTION: The COVID‐19 virus ignited social and economic turmoil around the world. Not since the Spanish Flu of 1918 had we seen a pandemic of such scale and severity. The resultant global transformation of industries, supply chains, work, communication, and institutional frameworks suggests we are entering a period of non‐ergodic change, in which the future cannot be extrapolated from the past (North, 1999). This means that we do not know the probability distribution or the outcomes from the virus. So, we must find a way to coexist and build our resilience. Moreover, although pandemics cause short‐term fear and disruption, they can also initiate long‐term change for economies and societies. Thus, we suggest that although COVID‐19 challenges the foundations of modern business and management, it reinforces the core assumptions of nonmarket strategy research. In particular – and especially during times of crisis and uncertainty – competitive advantage is predicated on proactive political and social awareness and engagement, aligned with strategic business objectives.
Sketches of New ad Future Research on Stakeholder Management
Sinziana Dorobantu
The Cambridge Handbook of Stakeholder Theory, 2019. Edited by Jeffrey S. Harrison, Jay B. Barney, R. Edward Freeman, Robert A. Phillips
Sinziana Dorobantu
The Cambridge Handbook of Stakeholder Theory, 2019. Edited by Jeffrey S. Harrison, Jay B. Barney, R. Edward Freeman, Robert A. Phillips
SUMMARY: Academic research is paying increasing attention to the role played by various stakeholders in the process of value creation and to the managerial practices for stakeholder engagement. Yet, as it is often the case with growing areas of research, the work completed thus far has opened up an even wider range of questions that are yet to be answered. Far from aiming to provide an exhaustive list, I highlight some questions that can be broadly grouped into three areas: (1) What mechanisms of governance are available to manage the relationships between a firm and its stakeholders? (2) How do the interactions between the stakeholders themselves and the differences among them influence strategies of stakeholder management and their effectiveness? (3) How does stakeholder management differ across institutional and physical environments? In the present chapter, I discuss some recent studies that begin to address these questions and sketch the outlines of future research that could probe even deeper. The order of these questions also suggests a need to broaden the scope of stakeholder research beyond its traditional focus on the firm-stakeholder relationship as the primary unit of analysis to examine interactions among the stakeholder groups and the broader environment that influences both firm-stakeholder and stakeholder-stakeholder relationships.
Sustainability, Stakeholder Governance, and Corporate Social Responsibility
Sinziana Dorobantu, Ruth Aguilera, Jiao Luo, and Frances Milliken, Editors
Advances in Strategic Management, Volume 38, August 2018
Sinziana Dorobantu, Ruth Aguilera, Jiao Luo, and Frances Milliken, Editors
Advances in Strategic Management, Volume 38, August 2018
DESCRIPTION: Scholarly interest in the areas of sustainability, stakeholder relations and corporate social responsibility (CSR) has increased considerably in recent years. In this volume, we take a step back to consider the fundamental questions that underlie and tie research across these areas together. The chapters in this volume cover a wide range of theoretical perspectives grounded in strategy, economics and sociology, employ various methodological approaches, and offer new arguments on the connections that exist between firms’ decisions relating to sustainability, CSR, and the governance of their stakeholder relations. The chapters in this volume highlight that business decisions relating to sustainability and CSR are ultimately decisions about the governance of stakeholder relations, and suggest that future work in these areas should consider more closely both the firms and their stakeholders as strategic actors driving firm decisions.
States, Markets, and the Undulating Governance of the Global Electric Power Supply Industry:
Scholarship Meets Practice
Sinziana Dorobantu and Bennet Zelner. 2015.
In The Routledge Companion to Non-Market Strategy, edited by Thomas Lawton and Tazeeb Rajwani.
ABSTRACT: The global electricity supply industry has cycled between state-centered and market-mediated models of governance since its inception in the 1880s. Initially funded and operated by private players with little government oversight, the industry soon experienced a prolonged trend of increasing government intervention that culminated in a series of nationalizations between 1945 and 1978. During the 1980s and 1990s, this trend reversed, as dozens of countries implemented “neoliberal” reforms intended to restore the role of the market—and reduce that of the state—in the industry’s operation. Though it is too early to be certain, the tide may once again be turning. We trace these undulating patterns of industry governance and academic discourse in a historical sketch of the global electricity industry. The correspondence between shifting approaches to industry governance and prevailing economic wisdom suggests that the latter facilitated the former, whether as a source of ex ante influence or a tool of ex post justification.
Scholarship Meets Practice
Sinziana Dorobantu and Bennet Zelner. 2015.
In The Routledge Companion to Non-Market Strategy, edited by Thomas Lawton and Tazeeb Rajwani.
ABSTRACT: The global electricity supply industry has cycled between state-centered and market-mediated models of governance since its inception in the 1880s. Initially funded and operated by private players with little government oversight, the industry soon experienced a prolonged trend of increasing government intervention that culminated in a series of nationalizations between 1945 and 1978. During the 1980s and 1990s, this trend reversed, as dozens of countries implemented “neoliberal” reforms intended to restore the role of the market—and reduce that of the state—in the industry’s operation. Though it is too early to be certain, the tide may once again be turning. We trace these undulating patterns of industry governance and academic discourse in a historical sketch of the global electricity industry. The correspondence between shifting approaches to industry governance and prevailing economic wisdom suggests that the latter facilitated the former, whether as a source of ex ante influence or a tool of ex post justification.