The literature on multinational corporations argues that a foreign firm can legitimize its activities, improve its reputation in a host country, and reduce the risk of hostile actions by the host government (including expropriation) by approaching and incorporating influential members of the domestic elite in its business. By using the concept of obsolescing political legitimacy, we argue that this legitimating strategy can lead to a loss of reputation and eventual illegitimacy when the host country undergoes significant social and institutional changes. When these changes take place, the domestic society can perceive that the multinational benefited from a previous social and institutional order increasingly considered as illegitimate. Under these circumstances, the new order will question the legitimacy of the multinational's operations, increasing the risk of expropriation. We illustrate our hypothesis with the case of the political strategies of the International Telephone and Telegraph Company (ITT) in Chile in the twentieth century.

This article proposes a novel management model for cultural, creative, and historic tourism cities. The creation of the model is based on previous literature and in the study of Barrio de las Letras, in Madrid, to identify the key components to successfully develop creative tourism ecosystems. The model integrates the literature on city center management and, unlike previous studies, incorporates missing elements, such as the role of small businesses associations and collaboration networks among diverse stakeholders to develop a cultural–historic tourism ecosystem. This model represents a proposal that supports the coexistence of the private and public sector and sustainable governance models that integrate the inhabitants of city centers with the economic activity generated by urban tourism. The model was developed by an analysis of secondary sources, interviews with key informants, and questionnaires of entrepreneurs located in a recently invigorated cultural and historic neighborhood. The contribution of knowledge offered by this paper is the proposition of a management model that can aid town centers to create competitive cultural/creative/historic tourism ecosystems while still preserving the sustainability of their social/commercial fabric. Therefore, the collaboration of cultural organizations, hospitality industry and retail can promote cultural, creative, and sustainable management model of historic urban centers.

Research background: The observable discrepancies in entrepreneurship activity across countries have motivated both researchers and policymakers to comprehend the sources of these variations. Certain scholars have suggested that the answer to this empirical puzzle lies in the macrolevel processes that influence entrepreneurial endeavours. Purpose of the article: As the understanding of macrolevel processes that shape entrepreneurial behaviour is limited, this research aims to answer how institutions and the economic context influence entrepreneurial value creation choices (i.e., for-profit, non-profit, and mixed). Methods: Using a cross-country sample of 7,891 entrepreneurs in 58 countries, we employ a multilevel ordered probit to evaluate a novel conceptual framework. Our analysis models the direct impact of the regulative framework, the normative pillar, and the cultural pillar, alongside the moderating influence of income inequality and economic uncertainty on value creation choices. Findings & value added: Our findings show that the regulative framework has a positive marginal effect on for-profit and mixed-value creation, but a negative effect on non-profit value creation. Meanwhile, the normative pillar has a negative marginal effect on for-profit and mixed-value creation, but a positive effect on non-profit value creation. The cultural pillar has a negative marginal effect on for-profit and mixed-value creation, but a positive effect on non-profit value creation. Furthermore, income inequality moderates positive the relationship between normative pillar and for-profit and mixed-value creation, while economic uncertainty moderates negative the relationship between normative pillar and for-profit and mixed-value creation. Our research contributes to the literature by providing a nuanced understanding of how institutional pillars can act as drivers or barriers for different entrepreneurial forms, evidence of how uncertainty interacts with institutional forces to shape value creation decisions, and insights into the distinctive attributes of different entrepreneurial forms. Our findings have implications for public policy development.

Research Summary: This article studies two interrelated questions. First, why did business groups in emerging markets thrive and prevail after pro‐market reforms were implemented in their countries? And, second, what type of adaptation strategies can multinational corporations develop in order to be competitive in economies dominated by business groups? By conducting an archive‐based historical network analysis of business groups in Chile during periods of major economic and political transitions, we maintain that business groups were created in periods of protectionism as a way to navigate economies with strong state participation or inefficient markets. In this process, these groups endogenously created an economy with market imperfections resulting from the dominance of these business groups. This means that the transition toward more open markets did not necessarily create more competitive environments and that elites in emerging economies were unwilling to abandon the advantages of having links between their businesses. Multinationals entering this economy adapted by becoming business groups themselves and creating links with other business groups. In sum, strategies devised as means to reduce market imperfections created new imperfections that incentivized the business groups to retain their structure and forced multinationals to become business groups. Managerial Summary: Large diversified conglomerates known as business groups dominate the markets of emerging economies. These groups have survived important changes taking place in their own countries, including the abandonment of an import substitution industrialization model for an open market one or changes from military regimes to democratic ones. This article explores two aspects related to these transitions most emerging economies have gone through. First, why did some business groups survive despite the fact that many of them were created and grew during protectionist times? And, second, what strategies have multinational corporations developed when operating in economies dominated by those powerful business groups? We show, first, that some business groups survived the transition by rearranging the type of links they had with each other, and, second, that multinationals competing in economies dominated by those business groups opted for becoming business groups themselves.