Subnational corruption and foreign firms’ performance: Evidence from China

Kaiyuan Yang, Pengcheng Ma and Lin Cui

Journal of Business Research, 2021, vol. 123, issue C, 106-116

Abstract: As a social and economic phenomenon, corruption has attracted much scholarly attention in the field of international business. However, studies concerning corruption generally remain at the national level, overlooking heterogeneity in institutions at the subnational level. This study zooms in on subnational corruption to examine its influence on the performance outcome of foreign firms, as well as the mitigation strategies by foreign firms through building mutual dependence with local governments. Analyzing data on foreign firms operating in China between 2011 and 2013, we find that subnational corruption level is negatively associated with the financial performance of foreign firms. This negative association is weakened by foreign firms’ export ratio and local experience.

Keywords: Corruption; Foreign direct investment; Firm performance; Subnational institutions (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148296320306482
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:123:y:2021:i:c:p:106-116

DOI: 10.1016/j.jbusres.2020.09.066

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().