Entry mode choices of multinational companies (MNCs) and host countries’ corruption: A review

• Type: Article in International Scientific Journal
• Date: 2012

Authors

Aurora Teixeira (Author) FEP

Journal

Title: African Journal of Business Management

Vol. 6 No. 27

ISSN: 1993-8233

Publisher: Academic Journals Inc.

Other information

Authenticus ID: P-00J-6Q8

DOI: 10.5897/ajbm11.3011

Abstract (EN): Despite voluminous literature on corruption and the entry mode choices of multinational companies (MNCs) in isolation, a comprehensive account which details the mechanisms through which host country corruption impacts on MNCs¿ entry modes is lacking. To overcome such a gap, we systematically review and provide an up-to-date overview of the empirical literature on corruption and the entry mode choices of MNCs. The review demonstrates that, in general, when in presence of markets with high levels of corruption, MNCs prefer low equity (that is, joint-ventures with local partners) or non-equity (namely exports and contracting) entry mode choices. Nevertheless, it also reveals that, in some specific cases, such as cultural proximity, even when there is pervasive corruption, MNCs may enter via wholly-owned subsidiaries. Such conclusions uncovered an interesting path for future research by exploring a rather neglected context, where the entry mode choices of MNCs are made from developed countries in Africa possessing historical and cultural ties.

Language: English

Type (Professor's evaluation): Scientific