How do foreign entrepreneurs adapt to local corruption norms in the Middle East? Institutional multiplicities and individual adaptation

Abstract

Foreign entrepreneurs encounter institutional complexities resulting from differences between their home and host countries. On one hand, foreign entrepreneurs must adapt to local norms in a host environment that might be novel and different; on the other, foreign entrepreneurs bring institutional legacies from their home environments. In this article, we critically examine how such tensions affect norm adaptation by foreign entrepreneurs, focusing upon their attitudes towards corruption–defined as corruption propensity. While imprints from home institutions can be ‘sticky’ and persistent, learning about host institutions requires foreign entrepreneurs to adapt their corruption propensity. We find that corruption propensity has an inverted U-shaped relationship with performance and conclude by analysing the implications of such propensity.