Yu, J.Lee, Seung-Hyun2020-01-292020-01-292019-04-160007-6503http://dx.doi.org/10.1177/0007650319843805https://hdl.handle.net/10735.1/7208Open EPUB version is freely available for download at https://journals.sagepub.com/doi/epub/10.1177/0007650319843805. PDF copies are only available to UT Dallas affiliates (use the Link to Article),We investigate what determines a multinational enterprise’s (MNE) propensity to engage in lobbying and bribing in host countries where the overall institutional development for market exchanges is insufficient, and thus, their governance systems are relatively weak. We extend the current literature on institutional strategies by theorizing and showing the persistent and significant impacts of home country institutions on an MNE’s choice of influencing activities to address institutional constraints overseas. More specifically, our results demonstrate that the MNEs from a home country with a stronger governance system are less involved in bribery, but have a higher tendency to lobby in transition economy countries, which have been characterized by relatively weaker institutional development, particularly in the area of governance. This tendency still holds even when these MNEs rely more on the local market for sales. We draw theoretical and practical implications from these observations. © The Author(s) 2019.en©2019 The AuthorsBriberyBusiness planningLobbyingInternational business enterprisesarticleYu, J., and S. -H Lee. 2019. "Bending the Rules or Changing Them? MNE Responses to Institutional Challenges in Transition Economies." Business and Society, doi: http://dx.doi.org/10.1177/0007650319843805