Essays on business government interface: Product recall crises, corporate political strategy, and corporate tax evasion

This dissertation consists of three essays on the theme of business-government interface. While the first two essays examine active ways of dealing with the government (corporate political strategies [CPS]), the third essay focuses on an indirect (and rather passive) way firms undertake the same (corporate tax evasion). Overall, I aim to contribute to the literature on strategic management of the market and non-market environment by examining firms' proactive and defensive tactics from various theoretical lenses.;The first essay (Chapter 1) examines product recalls and their effect on firms' performance. Drawing from adaptation-level theory, I argue that customers build adaptation levels for recall announcements over time; and that not all recalls have the same effect on firm performance. I also examine recall initiating firms' use of non-market strategies and test whether they can mitigate the negative effects of recall announcements. Analysis of vehicle safety recalls in the U.S. automotive industry support my hypotheses that abnormal product recalls, that is, recalls that deviate significantly from customers' expectations of a firm depending on firms' past behavior, matter more. Furthermore, political strategies, while helpful under normal times, become a liability for firm performance around major recall events.;The second essay (Chapter 2) explores the antecedents of CPS from a structural perspective. I argue that firms' position in the inter-firm alliance network is associated with their level of engagement in CPS. Furthermore, the nature of firms' connections as well as firms' past performance moderates this relationship. Findings of this study contribute to the literature on the antecedents of CPS by underlining the role of inter-organizational structures.;The third essay (Chapter 3) investigates the reasons that lead firms to operate either within or outside institutional boundaries. Focusing on registered firms in countries of various institutional backgrounds, I compare the incentives and constraints of staying within the formal sector against the competitive pressures originating from the informal sector. Findings suggest that improvements in institutional factors (i.e., tax code and public finance system) may help increase the tax compliance of the registered firms by making the formal sector more attractive and reducing the negative effects of informal competition.