Abstract
This study investigates whether petty corruption and grand corruption differ in their impact upon the entry strategies of foreign-investing multinational enterprises (MNEs). While extant theory suggests that the pervasiveness of host market corruption will influence the equity ownership decisions of these MNEs, subsequent research has not found a statistically significant relationship that empirically validates these propositions. These results seem counterintuitive, particularly given the substantial evidence that has been garnered which suggests that host market corruption influences the global location of foreign direct investment. We synthesize insights from institutional theory and integrative social contracts theory to argue that host market normative institutions, such as public sector corruption, should be conceptualized as multi-level phenomena. We theoretically distinguish between petty corruption and grand corruption in order to develop hypotheses pertaining to the relationship between each typ...
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