Country level corruption as a liability of foreignness: effects on staffing, incentives, and activities

John M. Mezias; Stephen J. Mezias

doi:10.1108/S1571-5027(2010)00000230018

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Advances in International Management

ISSN: 1571-5027
Series editor(s): Timothy Devinney, Torben Pedersen and Laszlo Tihanyi

Subject Area: International Business

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Country level corruption as a liability of foreignness: effects on staffing, incentives, and activities

Document Information:
Title:	Country level corruption as a liability of foreignness: effects on staffing, incentives, and activities
Author(s):	John M. Mezias, Stephen J. Mezias
Volume:	23 Editor(s): Devinney Timothy, Pedersen Torben, Tihanyi Laszlo ISBN: 978-0-85724-085-9 eISBN: 978-0-85724-086-6
Citation:	John M. Mezias, Stephen J. Mezias (2010), Country level corruption as a liability of foreignness: effects on staffing, incentives, and activities, in Devinney Timothy, Pedersen Torben, Tihanyi Laszlo (ed.) The Past, Present and Future of International Business & Management (Advances in International Management, Volume 23), Emerald Group Publishing Limited, pp.267-291
DOI:	10.1108/S1571-5027(2010)00000230018 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	Past research examining country-level corruption found that corruption reduces foreign direct investment. However, this research lacks implications for multinational corporations considering operating in high corruption countries. Recent international research has examined subsidiary challenges beyond initial investment decisions, but has not addressed operational challenges posed by corruption. Research investigating country-level corruption as a liability of foreignness (LOF) is needed because this theoretical perspective specifically examines mechanisms for managing and controlling subsidiaries. This paper utilizes the LOF perspective, integrating learning, international human resource management, and agency theories, to understand how corruption affects subsidiary adaptation strategies.