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RESEARCH PRODUCT

Business as usual? : the new role of multinational corporations in host countries with inadequate institutions. Case study of BP in Azerbaijan

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Masteroppgave i økonomi og administrasjon - Universitetet i Agder 2011 The present thesis is a contribution to increase knowledge about public-private partnerships in the field of international business, and specifically about partnerships that are stirring into governance issues of the host country. The main theme of the thesis is how a multinational corporation (MNC) and a host government can implement a successful collaboration that aims to promote capacity building in the host country. The case of study is BP in Azerbaijan. It investigates the background and the circumstances that led to the partnership between BP and its host government in Azerbaijan. The thesis resulted into four main findings: (1) the societal background and the morality and virtue of a multinational determine its decision to engage into private-public partnership for capacity building; however the authors did not find enough evidence to affirm that it also stands from the host government’s point view. (2) The MNC and the host government are more willing to engage in partnership if the expected valueadded and contributions of the cooperation exceed the disadvantages created by the current governance failure. (3) Protection of its investment seems to be a stronger driver for the company to enter a public-private partnership aiming at capacity building rather than the wish for stability in the host country. And (4) high bargaining power coupled with a persuasive influence act more as stronger driver in engagement to partnership than the support from the industry.