In this paper, we critique the literature on MNC-Host government bargaining power relationship, and propose an integrative theoretical model within the resource-based view of the firm. Recognizing that a firm’s bargaining power is directly related to rent generation, we analyze how firm-specific resources provide the basis of a sustainable bargaining power for the MNC vis-á-vis the host government. Furthermore, we identify several industry and country characteristics as moderators of the relationship between MNC resources and bargaining power. In the last section of the paper, we offer directions for future research and theory development in this area.
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