A substantial body of literature has shown that political connections have benefited firms domestically, but their cross-border value for multinational enterprises (MNEs) remains understudied. This paper provides novel evidence on the strategic advantages MNEs gain through political ties in host countries and the consequences for domestic firms. Examining foreign companies’ contributions to US political campaigns through political action committees (PACs) sponsored by their US subsidiaries, we find that contributing foreign firms win significantly more U.S. government contracts than non-contributing foreign firms. Crucially, this increased access for foreign contributing firms crowds out government contract allocation to similar domestic firms that do not make political donations, even in regulated industries favoring domestic suppliers. Our findings demonstrate that MNEs can effectively leverage political connections as a non-market strategy to gain preferential treatment over local competitors in a host nation. However, these cross-border political ties come at the expense of domestic firms’ competitiveness, informing policy debates around restricting foreign corporate influence in domestic elections. From a managerial perspective, our findings suggest that strategic political ties are an important consideration for MNEs alongside traditional location factors when evaluating foreign investment decisions and navigating institutional complexities abroad.

大量文献表明，政治关系使国内企业受益，但其对跨国企业 （MNE） 的跨境价值仍未得到充分研究。本文为跨国企业通过东道国的政治关系获得的战略优势及其对国内公司的影响提供了新的证据。通过研究外国公司通过其美国子公司赞助的政治行动委员会 （PAC） 对美国政治竞选活动的贡献，我们发现，出资外国公司赢得的美国政府合同明显多于未出资的外国公司。至关重要的是，外国出资公司准入的增加挤占了政府合同分配给不进行政治捐款的类似国内公司的合同，即使在偏袒国内供应商的受监管行业也是如此。我们的研究结果表明，跨国企业可以有效地利用政治关系作为非市场策略，以获得优于东道国当地竞争对手的优惠待遇。然而，这些跨境政治联系是以牺牲国内公司的竞争力为代价的，这为围绕限制外国公司在国内选举中的影响力的政策辩论提供了信息。从管理的角度来看，我们的研究结果表明，在评估外国投资决策和驾驭海外机构复杂性时，战略政治关系是跨国企业与传统区位因素的重要考虑因素。