JSOM Faculty Research
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Browsing JSOM Faculty Research by Subject "Asia-Pacific region"
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Item Corruption and subsidiary profitability: US MNC subsidiaries in the Asia Pacific region(Asia Pacific Journal of Management) Lee, Seung-Hyun; Hong, Sungjin J.Would multinational corporation (MNC) subsidiaries be more profitable in host countries where corruption is less severe? Would MNC subsidiaries be more profitable in less corrupt countries if they focused on local sales? This paper examines the impact of the level of corruption on the profitability of US MNCs’ profitability in the Asia Pacific region. Using foreign direct investment (FDI) data archived by the US Bureau of Economic Analysis and corruption data reported by the World Bank, we find that MNC subsidiaries located in countries with a lower level of corruption are more profitable. In addition, MNC subsidiaries with a greater focus on local sales are more profitable when the corruption level is low. This study contributes to the literature by showing that when local sales are important to MNC subsidiaries, a lower level of corruption by host countries positively affects the profitability of the MNC subsidiaries.Item Corruption in Asia: Pervasiveness and arbitrariness(Asia Pacific Journal of Management, 2007-01-12) Lee, Seung-Hyun; Oh, Kyeungrae (Kenny)How does one understand the differences and similarities of corruption among various Asian countries? We use a recent framework developed by Rodriguez, Uhlenbruk, and Eden (2005) to suggest that corruption has to be examined from two different dimensions: pervasiveness and arbitrariness. Using this framework, we ask why some Asian countries are able to achieve high levels of economic growth in the midst of high level corruption while other countries suffer from economic stagnation. We specifically suggest that more firms would bribe when pervasiveness is high, while fewer firms would bribe when arbitrariness is high. We also look into the implications on foreign direct investment.