ALIGNING BUSINESS INTERESTS WITH NATIONAL GOALS IN INDUSTRIAL POLICY: The FINNISH CASE, 1952-2014

Paper in proceeding, 2023

International business (IB) researchers have long studied how multinational companies use political tactics to shape policies in their home and host countries. Yet, this literature has largely ignored the return of industrial policies—i.e., governmental plans and activities to allocate public resources to private firms aligned with national objectives—as a new avenue for political activities. In this article, we redress this oversight from an IB perspective by examining Finnish industrial policy-making concerning export-oriented shipbuilding from 1952 to 2014. Drawing from neo-institutional theory, the empirical findings challenge the idea that the current rise of industrial policy is a temporary triumph of state interventionism over market ideology. Instead, the findings show the persistence of the operation over time although it occasionally took more hidden forms. We identify the industry’s multi-generational political strategy to work with political leaders to legitimize and coordinate industrial policy-making under the influence of multiple institutional pressures (geopolitics, supranational institutions, local society). Our primary contribution is to unpack the corporate political activity nature of industrial policy-making from an IB perspective. Moreover, the study responds to calls for incorporating historical methods in IB scholarship and demonstrates a key methodological potential: Exposing biases in current research paradigms.