The Emergence of Populism as an Institution and Its Recursive Mechanisms: A Socio-Cognitive Theory Perspective

Abstract

The rise of populism worldwide provides an excellent setting to explore the dynamic relationships among international business (IB), institutional context, and IB policymaking. It also has important implications for multinational enterprises (MNEs). To understand populism’s recursiveness, such relationships need to be examined more broadly from a social psychology lens; also, within IB and IB policy research. While populism has been attracting widespread attention among many different IB stakeholders, our understanding of populism at the nexus of politics, the economy and social psychology remains undertheorized and, sometimes, misunderstood. We employ socio-cognitive theory (SCT) to answer how populism arises (RQ1) and establishes itself as an institution (RQ2). By shedding light on the origin and mechanics of populism’s recursive nature, the logic of “proto-institutions”, which we employ to understand institutional change in the context of populism, helps advance institutional theory within an IB context. Exploring the implications of populism for MNEs helps advance theory on MNE non-market strategies (NMSs) and shed light on MNEs’ corporate political activities. The re-framing of populism as a wicked problem further provides a theoretical toolkit for IB policy research. We present several future research directions for IB and IB policy research, as well as MNE research.