Peter L. Rodriguez

The Impact of Corruption on Entry Strategy: Evidence from Telecommunication Projects in Emerging Economies

With globalization and the growth in emerging economies, multinational enterprises (MNEs) now frequently confront challenges associated with corrupt governments. Already, a growing body of research has demonstrated that corruption significantly reduces a countrys aggregate inflows of foreign direct investment through its effects on firm performance. We move the analysis of corruption from aggregate financial flows toward managerial theory and practice by examining how firms adjust their strategy for entering foreign markets in corrupt environments and how different types of corruption affect firms choices. Building on institutional theory, we predict that MNEs will respond to pervasive and arbitrary corruption in a host country by selecting particular types of equity and nonequity modes of entry. Using data on 220 telecommunications development projects in 64 emerging economies, we find that firms adapt to the pressures of corruption via short-term contracting and entry into joint ventures. We also find that the arbitrariness surrounding corrupt transactions has a significant impact on firms decisions, in addition to the overall level of corruption. In contrast to extant research, we show that MNEs use nonequity-entry modes or partnering as an adaptive strategy to participate in markets despite the presence of corruption.

An Exploratory Study of How Potential “Family and Household Capital” Impacts New Venture Start-Up Rates:

Drawing from social capital theory, the authors examine the relationship between family capital characteristics and new venture start-up rates in the United States. The results of this study improve the understanding of (a) how families matter in an entrepreneur’s decision to start a business, (b) how wealth and health care considerations affect the start-up decision, and (c) whether and how these effects differ among the largest ethnic groups in the United States.