State terrorism and multinational enterprises: understanding the links and why it matters

Purpose

States are the most prolific perpetrators of terrorism. State terrorism constitutes a pervasive form of political violence and represents a prominent source of human insecurity and human rights violations worldwide. While state terrorism serves various political, economic and social purposes, some evidence shows it is often deployed to protect corporate interests, particularly multinational enterprise (MNE) operations in emerging markets. Despite this reality, international business (IB)-terrorism literature has predominantly focused on non-state terrorism, and research on MNEs and political violence has typically examined the topic within the context of organised conflict situations. However, state terrorism occurs both within and outside of political conflicts. This study aims to understand how MNEs are linked to state terrorism.

Design/methodology/approach

This conceptual paper draws on critical terrorism studies and integrates these with resource dependency theory, new institutional economics and non-market strategy research to provide insights into the relationship between state terrorism and MNEs.

Findings

The author shows the controversial connections between MNEs and two forms of state terrorism; limited and generalised. Some MNEs provide products and services used in mass terror campaigns, attracting criticism from both civil society and their employees. Other MNEs take advantage of state-driven forced major displacement of local populations to acquire land for investment projects. MNE involvement in state terrorism can stem from resource interdependencies between states and MNEs, facilitated by both formal and informal institutional conditions. The author also presents several research directions to advance this understudied area.

Originality/value

To the best of the author’s knowledge, this is the first paper to comprehensively explore how MNEs and state terrorism are interlinked and offers a useful foundation for future conceptual, theoretical and empirical research on this topic.