Threat of Falling High Status and Corporate Bribery: Evidence from the Revealed Accounting Records of Two South Korean Presidents
In: Strategic Management Journal (2018), 39(4): 1083-1111.
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In: Strategic Management Journal (2018), 39(4): 1083-1111.
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In: Administrative science quarterly: ASQ, Band 62, Heft 2, S. NP18-NP22
ISSN: 1930-3815
In: Administrative science quarterly: ASQ ; dedicated to advancing the understanding of administration through empirical investigation and theoretical analysis
ISSN: 0001-8392
In: Administrative science quarterly: ASQ, Band 69, Heft 1, S. 131-171
ISSN: 1930-3815
Although the liability of foreignness has been shown to present real economic barriers for foreign firms in various contexts around the globe, scholars continue to debate what drives this liability in different market contexts: lack of information due to institutional distance, lack of social embeddedness, discrimination, or something else. In this study, we propose a new theory, that in corporate lobbying within the nonmarket strategy context, the liability of foreignness is driven in no small part by a values-based ideological conflict stemming from the divide between democracy and autocracy. Private-sector firms from autocratic countries face costs of illegitimacy in Washington, D.C., and professional corporate lobbyists charge such firms a fee premium, in effect, to pay for legitimacy. We conduct an empirical study of the lobbying fees charged by professional corporate lobbyists in Washington, D.C., to their domestic and foreign firm clients, and the results strongly support the predictions of our theory. We also show that the liability of foreignness in this context endures for foreign firms from autocratic countries over the 15-year length of our sample period. Offering a new theoretical perspective as well as new empirical findings regarding the liability of foreignness, our study has practical implications for managers of foreign firms and may also generalize to other market contexts.
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In: Journal of Economic Literature, Band 43, S. 781-800
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In: Harvard Business School Strategy Unit Working Paper No. 13-082
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In: Organization science, Band 24, Heft 4, S. 1174-1194
ISSN: 1526-5455
This study addresses an apparent impasse in the research on organizations' responses to cultural distance. We posit that cross-country differences in egalitarianism—a cultural orientation manifested in intolerance for abuses of market and political power and support for protection of less powerful actors—affect multinational firms' choices of destinations for foreign direct investment (FDI). Using historically motivated instrumental variables, we observe that egalitarianism distance has a negative causal impact on FDI flows. This effect is robust to a broad set of competing accounts, including the effects of other cultural dimensions, various features of the prevailing legal and regulatory regimes, other features of the institutional environment, economic development, and time-invariant unobserved characteristics of origin and host countries. We further show that egalitarianism correlates in a conceptually compatible way with an array of organizational practices pertinent to firms' interactions with nonfinancial stakeholders, such that national differences in these egalitarianism-related features may affect firms' international expansion decisions.
In: Organization Science, Forthcoming
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