“Manu Militari: Venture Ties To Coercive Institutions In Emerging Economies” by Dr. Shon HIATT
Dr. Shon HIATT
Assistant Professor of Management and Organization
USC Marshall School of Business
University of Southern California
We explore how affiliations with military and political elites differentially affect survival and the likelihood of expropriation of new ventures. Empirically, we examine the impact of military and political ties on airline ventures over 65 years across 10 Latin American countries. Our findings show that military and political ties operate using different mechanisms of influence. While both military and political ties increase firm survival, only military ties reduce expropriation of assets. Further analysis finds that these effects are contingent upon institutional, political, and organizational contexts. Military ties are more effective than political ties in contexts of civil and political conflict, low institutional democracy, socialist-oriented economic regimes, and firms with foreign investments, while political ties are more effective when legislatures have more power and after long periods of civilian rule. We discuss the implications of these findings for research on dependency theory, organizational ties, and entrepreneurship.