Korea Trade Review (무역학회지)

Korea Trade Research Association (한국무역학회)
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The Effect of Corruption in Host Country on Joint Venture Partner Selection of Emerging Multinational Enterprises

피투자국의 부패에 따른 신흥국 다국적기업의 파트너 선택

  • Tae-Woo Roh (Department of International Trade and Commerce, Soonchunhyang University) ;
  • Ji-Hun Choi (Department of International Trade and Commerce, Soonchunhyang University) ;
  • Jung-Geun Kim (Department of International Trade and Commerce, Soonchunhyang University) ;
  • Su-Bin Park (Department of International Trade and Commerce, Soonchunhyang University)
  • 노태우 (순천향대학교 국제통상학과) ;
  • 최지훈 (순천향대학교 국제통상학과) ;
  • 김정근 (순천향대학교 국제통상학과) ;
  • 박수빈 (순천향대학교 국제통상학과)
  • Received : 2021.03.31
  • Accepted : 2021.04.20
  • Published : 2021.04.30
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Abstract

Based on the existing OFDI (outward foreign direct investment) literature, this study endeavored to verify how the corruption of host countries affects the partner strategy of EMNEs (emerging multinational enterprises) when EMNEs enter global markets through joint ventures. Following the existing literature, this study classified corruption and partner strategies into two categories, respectively. First, the corruption of host country was divided into grand corruption and petty corruption. Second, EMNEs' joint venture partner strategy was divided into home country partner joint venture and host country (i.e., local) partner joint venture. Our hypothesis suggested that the greater the host country's grand corruption, the more EMNEs would choose the host country partner, while the strong petty corruption leads to the preference of home country partner in host country. The hypotheses were verified with a sample of 890 foreign direct investment cases of Chinese multinational companies from 2005 to 2015. As a result of the study, regardless of the degree of corruption, it was found that they prefer joint ventures with home country partners when EMNEs enter the global market through joint ventures.

Keywords

Acknowledgement

This work was supported by the Soonchunhyang University Research Fund.

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