TY - JOUR
T1 - Corruption and market attractiveness influences on different types of FDI
AU - Brouthers, Lance Eliot
AU - Gao, Yan
AU - McNicol, Jason
PY - 2008/2/22
Y1 - 2008/2/22
N2 - Previous studies have proposed that a compensatory model predicts the level of foreign direct investment (FDI) in a country; FDI levels are a result of ‘trade-offs’ between the positive effect of market attractiveness and the negative influence of corruption. In contrast, we hypothesize and find that the compensatory relationship only holds for market-seeking investment; for resource-seeking FDI the model appears to be noncompensatory. Greater market attractiveness mitigates the negative impact of corruption on market-seeking investment, but the ability of market attractiveness to mitigate the negative impact of corruption on resource-seeking FDI quickly disappears as corruption levels increase. Implications and future research directions are discussed.
AB - Previous studies have proposed that a compensatory model predicts the level of foreign direct investment (FDI) in a country; FDI levels are a result of ‘trade-offs’ between the positive effect of market attractiveness and the negative influence of corruption. In contrast, we hypothesize and find that the compensatory relationship only holds for market-seeking investment; for resource-seeking FDI the model appears to be noncompensatory. Greater market attractiveness mitigates the negative impact of corruption on market-seeking investment, but the ability of market attractiveness to mitigate the negative impact of corruption on resource-seeking FDI quickly disappears as corruption levels increase. Implications and future research directions are discussed.
UR - https://www.scopus.com/pages/publications/44149111393
U2 - 10.1002/smj.669
DO - 10.1002/smj.669
M3 - Article
SN - 0143-2095
VL - 29
SP - 673
EP - 680
JO - Strategic Management Journal
JF - Strategic Management Journal
IS - 6
ER -
