A social-psychological perspective of host country societal acceptance of foreign firms

The purpose of the study is to explain why some foreign firms are accepted in a host country, while others are not.

The paper is conceptual. It first articulates the meaning of firm acceptability in the eyes of host country societies, which remains ambiguous in the current literature. Second, using a social psychological theory, the paper explores the firm-level attributes that can shape the societal judgment of firms’ acceptability.

The paper suggests that foreign firms’ acceptability pertains to the perception to which they can contribute to the host country’s economic development and societal well-being. The judgment of this is carried out by emphasizing three types of organizational cues, which indicate firms’ capacity to contribute.

This conceptual paper contributes to the understanding of firms’ social acceptance in a host country by explicating the meaning of social acceptability and exploring the evaluation mechanism local actors adopt to judge foreign firms. The paper would benefit from empirical investigation by future research.

The meaning of social acceptability of foreign firms remains largely implicit in the literature; likewise, the evaluative mechanism of the firms’ acceptability is little researched. The paper addresses these two issues by undertaking a critical theory stance. It builds on a social psychology theory, multinational corporation (MNC) literature and economic nationalism, thus demonstrating a multidisciplinary approach.