This study investigates the ambivalent role of Corporate Political Activity (CPA) as a buffer against uncertainties and a catalyst for strategic adjustments in divestment decisions in emerging markets, with a focus on Brazil. Based on the Resource Dependence Theory (RDT), data from 328 companies listed on the B3 stock exchange between 2010 and 2022 were analyzed. The results indicate that CPA can mitigate external vulnerabilities while also enabling significant organizational changes, depending on the type of political connection and institutional conditions. Econometric models revealed that politically connected board members, although expected to reduce divestments, actually facilitate them by creating favorable regulatory conditions. In contrast, donations made by managers were associated with the preservation of strategic assets, whereas contributions from shareholders or corporations were linked to an increase in divestments, highlighting the heterogeneity of motivations behind CPA usage. State ownership showed paradoxical results, being associated with an increase in divestments, possibly due to restructuring policies and asset redistribution. Extensive and diversified CPA networks also showed a positive relationship with divestment, challenging the traditional view that political connections constrain strategic decisions. These findings reinforce the multifaceted nature of CPA in emerging markets. From the RDT perspective, CPA acts as a dynamic strategic resource, adapting to external pressures and market conditions. This study advances the literature by integrating different dimensions of CPA and expanding its application to emerging markets, offering relevant insights for managers and policymakers. By exploring the interaction between CPA, divestments, and institutional contexts, this research provides valuable guidance for more effective corporate strategies in highly volatile scenarios.
