PhD defence Negash Haile Dedho

Keywords:  Corruption, Laws against bribery abroad, Foreign direct investment, Experiential learning

"The Good, the Bad, and the Ugly? Host country corruption, Multinational firms’ Foreign Direct Investment, and Innovation"

This dissertation examines multinational corporations’ (MNCs’) foreign investment strategies and their innovation-enhancing knowledge spillovers to local firms in weak institutional environments. The thesis is structured around three substantive chapters. Chapter 2 examines MNCs’ foreign investment location strategies in corrupt host countries and investigates how their responses to corruption are jointly shaped by experiential learning from the corruption environment and the strength of anti-bribery law enforcement in their home countries. Chapter 3 investigates how MNCs navigate entry into corrupt host countries by choosing between greenfield investment and mergers and acquisitions (M&A) and examines how this entry-mode decision is jointly shaped by firm-level corporate social responsibility (CSR) governance capabilities and the strength of anti-bribery enforcement in the MNCs’ home countries. Chapter 4 examines whether the presence of MNCs affects local firm innovation in developing and emerging economies and how this effect is jointly influenced by host-country corruption and the strength of bribery-constraining institutions in MNCs’ home countries. Collectively, these three chapters advance our understanding of how MNCs navigate weak institutional environments when expanding globally and the developmental consequences of their presence in host economies. The dissertation offers insights with important implications for research, investment policies, and managerial practices. 

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