Who's Afraid of Foreigners? Religion, Trust, and Directors in Multinational Corporations

Abstract

For a sample of 781 Belgian subsidiaries of multinational corporations (MNCs) from 13 different countries, we investigate how religion and trust in the parent country of the MNC affect the likelihood that the board of directors of the Belgian subsidiary includes parent country nationals, and the likelihood that the managing director of the subsidiary is a parent country national. Consistent with our hypotheses, we find that the likelihood of parent country (managing) directors is greater if the parent company is located in a Catholic country, a country where interpersonal trust is lower, or a country characterized by higher power distance.