Exploring the role of international arms transfers in the non-market environment for international businesses across developing countries under authoritarian regimes.

Abstract

This article is aimed at providing an analytical framework for Multinational Corporations (MNCs) to exploit arms transfer deals as an alternative strategic tool for the protection of their investments against risks on their properties rights in developing countries with relatively weaker protective legal frameworks as well as under authoritarian regimes that mostly rely on the use of firepower for their survival. For this purpose, a literature review and a further analysis through the use of the Wilson-Lowi Matrix and game theory based on the previous review was conducted to explore how MNCs can hedge their exposure to expropriation risks in these countries. The analysis shows how MNCs should impact these survival probabilities by engaging with providers of defence goods and services, governments, armed forces and other players in the non-market context involved in the competition for the control of the State in these countries.