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Digitalization Level, Corruptive Practices, and Location Choice in the Hotel Industry


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Based on institutional and agency theories, this paper examines the role of host corruptive practices on country choice for the hotel industry, as well as the power of digitalization as an anti-corruption tool. Digitalization level can boost transparency and can help monitor corruptive practices and other unethical behaviours. Relying on data from the Spanish hotel industry, the results confirm that the existence of corruptive or weak institutions has a significant impact on country choice, while a high digitalization level reduces the possibility of corruptive practices. We contribute by analysing the precise effect of host corruptive practices on country choice and the powerful effect of digitalization level as an anti-corruption instrument. This study is particularly interesting for the hotel industry, as a service sector, where multinationals need to carry out most of activities in the host country and maintain close interactions with foreign agents.
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Journal of Business Research 136 (2021) 176–185
Available online 28 July 2021
0148-2963/© 2021 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license
Digitalization level, corruptive practices, and location choice in the
hotel industry
Ana M. Romero-Martínez
, Fernando E. García-Mui˜
Complutense University of Madrid, Faculty of Economics and Business, Av. de Filipinas, n3, 28003 Madrid, Spain
Rey Juan Carlos University, Faculty of Law and Social Sciences, Paseo de los Artilleros, s/n, 28032 Madrid, Spain
Corruptive practices
Digitalization level
Location choice
Service industry
Hotel industry
Based on institutional and agency theories, this paper examines the role of host corruptive practices on country
choice for the hotel industry, as well as the power of digitalization as an anti-corruption tool. Digitalization level
can boost transparency and can help monitor corruptive practices and other unethical behaviours. Relying on
data from the Spanish hotel industry, the results conrm that the existence of corruptive or weak institutions has
a signicant impact on country choice, while a high digitalization level reduces the possibility of corruptive
practices. We contribute by analysing the precise effect of host corruptive practices on country choice and the
powerful effect of digitalization level as an anti-corruption instrument. This study is particularly interesting for
the hotel industry, as a service sector, where multinationals need to carry out most of activities in the host
country and maintain close interactions with foreign agents.
1. Introduction
Corruption is a perpetual human behaviour that has existed in every
society over time (Barkemeyer et al., 2018; Kouznetsov et al., 2019).
Corruptive practices may be prevalent in every country in different ways
and with different intensities, and should always be considered negative
(Gorsira et al., 2018; Mousavi & Pourkiani, 2013). According to the
World Economic Forum (WEF), corruptive practices have caused a
documented worldwide annual cost of more than 3.5 trillion dollars
through bribes and stolen money (Johnson, 2018). The dramatic socio-
economic consequences of corruption have increased societal and
governmental concern about this issue (Gorsira et al., 2018), which has
been intensied by globalization in all sectors (Petrou & Thanos, 2014).
This phenomenon has gained much attention from business and man-
agement scholars over the last three decades (Farrales, 2005; Godinez &
Liu, 2015; Wang et al., 2018), although empirical results about its
impact on internationalization remain inconclusive (Helmy, 2013;
Nguyen & van Dijk, 2012; Petrou & Thanos, 2014).
Corruptive practices such as bribery, fraud and nancial crime
consist of the abuse of (entrusted) power for private gain or benet
(Bahoo et al., 2020; Cuervo-Cazurra, 2006; Gorsira et al., 2018); such
practices take place because of information asymmetries and lack of
transparency (Javorcik & Wei, 2009). Drawing on institutional theory
(North, 1990), scholars consistently agree that the strength of in-
stitutions shapes opportunities and business practices in each country to
reduce asymmetries and uncertainty (Nielsen et al., 2017). This may
inuence a rms decisions, because they must adapt to the rules and
values prevailing in the host country (DiMaggio & Powell, 1983). When
the host country has weak or under-developed institutions, multina-
tionals should be aware that corruptive practices could be rooted in that
country (Godinez & Liu, 2015; Svensson, 2005). Weak formal in-
stitutions can lead to instability, market failures, uncertainty and in-
formation complexity in transactions, all of which entail higher costs
and risks (Barkemeyer et al., 2018; Svensson, 2005).
Previous studies have concluded that corruption negatively in-
uences economic growth (Fisman & Svensson, 2007; Mauro, 1995),
investments (Cuervo-Cazurra, 2016; Lambsdorff, 2003), innovation and
entrepreneurship (Anokhin & Schulze, 2009) and social development
(Mauro, 1998). This issue has recently been studied in international
business (IB) (Godinez & Liu, 2015), particularly in relation to emerging
and transition economies (Hellman et al., 2000; Rodriguez et al., 2006).
The IB literature conrms that corruption hinders foreign direct
This paper has been supported by Project RTI2018-097447-B-I00 of the Ministry of Science, Innovation and Universities (Spain), the Excellent Research Group
Strategorof URJC-Santander Bank, and UCM consolidated research group "Strategies for Business Growth" 940376.
* Corresponding author.
E-mail addresses: (A.M. Romero-Martínez), (F.E. García-Mui˜
Contents lists available at ScienceDirect
Journal of Business Research
journal homepage:
Received 19 September 2020; Received in revised form 12 July 2021; Accepted 14 July 2021
Journal of Business Research 136 (2021) 176–185
investment (FDI) and country choice (Brada et al., 2019; Brouthers et al.,
2008; Doh et al., 2003; Donnelly & Manolova, 2020; Li et al., 2021;
Uhlenbruck et al., 2006; Woo & Heo, 2009).
In accordance with the previous literature, in this paper we adopted
the moralist view of corruption that condemns such unethical practices;
this is currently the view most accepted by scholars (Javorcik & Wei,
2009; Petrou & Thanos, 2014). Although public ofcers may carry out
corruptive practices, they have the capacity to build strong formal in-
stitutions to monitor and circumvent corruption (Petrou & Thanos,
2014). Due to market globalization, countries need to present favour-
able environments and strong institutions to attract foreign investment,
so corruptive practices should be monitored and reduced. The level of
digitalization for institutional rules, regulations and routines through
information and communication technology (ICT) can play a positive
role as an anti-corruption tool (Huarng, 2015; Kim et al., 2009). Digi-
talization level improves public information, the ow of information
between public and private agents and enables citizens to scrutinize
public ofcers (Adam & Fazekas, 2018; Bertot et al., 2010; Davies &
Fumega, 2014; Kossow & Dykes, 2018; Kuriyan et al., 2011).
To better comprehend how governments can reduce corruptive
practices and increase international investments, we considered the
following research questions: rst, do host corruptive practices inhibit
country choice? Second, is digitalization level an effective anti-
corruption tool?
The hotel industry is an excellent eld to test our hypotheses because
establishing hotels abroad is a resource-intensive activity and multina-
tionals have to interact with politicians and society in general. The
Spanish hotel industry is a benchmark at the international hotel in-
dustry, because it is heavily involved in internationalization (G´
et al., 2016). However, studies on location choice in the hotel industry
are scarce. Some exceptions are Fang et al. (2019) and Puciato (2016),
who identied relevant factors in country choice for the hotel industry,
such as the hotel clustering and agglomeration, the level of economic
development and the degree of internationalization at the location.
Our ndings indicate that corruptive practices in the host country
reduce the number of hotel establishments in that country. The results
also conrm the expected role of digitalization level as an efcient anti-
corruption tool.
Our study contributes to the existing literature in several ways. First,
we analysed the precise impact of corruptive practices on country
choice, because previous authors have called for more research on this
topic (Petrou & Thanos, 2014; Rodriguez et al., 2005). Dealing with
corruption is especially interesting in the hospitality industry as a ser-
vice sector, because multinationals need to carry out most of the activ-
ities in the host country due to the nature of the product, and
accordingly, close and regular interactions with foreign governments
and local agents are involved (Pl´
a-Barber & Ghauri, 2012). Second, we
dened corruption broadly, as a many-faceted phenomenon, going
beyond previous biased perspectives, which yielded a broad and
objective measure of corruption that goes beyond the perceptual Cor-
ruption Index (Cuervo-Cazurra, 2016). Third, we studied the role of
digitalization level as an anti-corruption tool. Digitalization is a rela-
tively new phenomenon and inuences the activities of rms in foreign
markets because it can make formal institutions stronger and trans-
actions more transparent (Daude & Stein, 2007; Nielsen et al., 2017). To
test the effect of digitalization level on corruptive practices, we distin-
guished between corruptive practices related either to formal institu-
tional weakness or to socio-cultural values in favour of corruption
(Barkemeyer et al., 2018; Kouznetsov et al., 2019). This distinction is
necessary because governments may only act to reduce corruptive
practices by strengthening formal institutions, at least in the short/
medium-term. Finally, we have provided a comprehensive concept
and measurement of digitalization level that takes into account e-gov-
ernment administration, the technical development level of in-
frastructures and the technical skills of citizens (Charoensukmongkol &
Moqbel, 2014).
2. Theory and hypotheses
Based on institutional theory, institutions are structures that provide
the basis for a society and affect the actions and behaviours of people,
systems and organizations (Arregle et al., 2013; North, 1991). In-
stitutions dene the rules of the game between agents and inuence the
attractiveness of the host country (North, 1990). Institutions can be both
formal laws and regulations, policies, economic structures and
enforcement measures and informal norms, values, beliefs, tradi-
tions, prevalent practices and codes of conduct (North, 1990). Accord-
ingly, the economics literature allows us to go deeper into the analysis of
the formal institutions. Agency theory states that the complexity of
transactions determines the likelihood of conict between agents (Wil-
liamson, 2000). Uncertainty and risk associated with the home and host
agentsrelationships entail costs that may inhibit country choice. If
formal institutions are weak, transactions are characterized by high
uncertainty and information asymmetries.
An increasing number of scholars have argued that corruptive
practices should be studied in the context of the institutional structures
in which they exist (Farrales, 2005). Corruption, red tape, excessive
bureaucracy and political instability take place in poor formal institu-
tional environments. Thus, weak formal institutions let corruption
become a prevalent practice in societies (e.g., Daude & Stein, 2007;
Nielsen et al., 2017; Wei, 1997; Wheeler & Mody, 1992).
2.1. Corruptive practices and location choice
Corruption is an important phenomenon that characterizes coun-
tries development level (Rose-Ackerman, 2007), the relationships be-
tween different agents and cultural values in a society. Corruptive
practices emerge when formal institutions are poor and inefcient and
cultural values are prone to corruption (Godinez & Liu, 2015; Svensson,
2005). These circumstances support information asymmetries and
opportunistic behaviour in transactions (Krueger, 1974). Corruption
includes different practices such as bribery, fraud, extortion and nepo-
tism (Elbahnasawy, 2014; Steidlmeier, 1999). Such corruption may
damage the strength and solvency of a nation (Voyer & Beamish, 2004).
A review of the literature reveals that there are several denitions
and conceptual views of corruption (Cuervo-Cazurra, 2006; Farrales,
2005; Godinez & Liu, 2015). A review of the denitions of corruption
shows that this concept has mainly focused on the public sphere,
because corruptive practices are a principal-agent problem, with citizens
usually being principals and government ofcials or bureaucrats being
agents that act on the citizensbehalf (Barkemeyer et al., 2018; Doh
et al., 2003). Aguilera and Vadera (2008), Godinez and Liu (2015), Jain
(2001), Roy and Oliver (2009) and Svensson (2005) dened corruption
as acts or practices in which the power of public ofce is abused for
personal or private gain in a manner that contravenes the rules of the
game. Shleifer and Vishny (1993: 599) dened power abuse as the sale
by the government ofcials of government property for personal gain.
Similarly Judge et al. (2011) and Akçay (2006) dened corruption as the
misuse of public power for private benet; it is most likely to occur
where public and private sectors meet. Rose-Ackerman (1999, 2007)
dened corruption in a similar way, focusing on the public agent, but
also highlighting the illegal payments that corruptive practices entail.
Other studies like those by Cuervo-Cazurra (2006) and Gorsira et al.
(2018) kept this broad denition of corruption as the abuse of (entrus-
ted) power for private gain or benets.
There are two opposing theoretical approaches to corruption:
moralist and revisionist. The moralists condemn corruptive practices
because such practices are a plague in societies and destroy well-being
(Javorcik & Wei, 2009; Petrou & Thanos, 2014). These practices form
a threat that should be monitored and controlled legally (Rose-Acker-
man, 1999). The revisionists, on the other hand, argue that corruption
should be studied more objectively: corruptive practices are considered
unavoidable in transactions (Bayley, 1966; Leff, 1964; Nye, 1967). Qi
A.M. Romero-Martínez and F.E. García-Mui˜
Journal of Business Research 136 (2021) 176–185
et al. (2020) even stated that bureaucratic corruption could, in some
cases, improve efciency in a weak institutional environment.
In IB literature most scholars consider that corruptive practices in a
host country have a negative impact on internationalization (Bardhan,
1997; Campos et al., 2010; Cuervo-Cazurra, 2016; Lambsdorff, 2006;
Mauro, 1998). It appears that, with some exceptions like Barassi and
Zhou (2012) and Helmy (2013), the revisionist view has much less
empirical support than the moralist one (Aidt, 2009). Drawing on a
moralist approach, we consider that weak formal institutions yield to
corruptive practices, while strong institutions hinder them.
Corruptive practices can negatively inuence location choice for
multinational organizations (Donnelly & Manolova, 2020; Holmes et al.,
2013). Solid/developed formal institutions reduce uncertainty for the
collective (North, 1991) and create obstacles for corruptive behaviour.
Mature legal and judicial systems improve market efciency and control
over government discretion (Williamson, 2000), thus reducing uncer-
tainty and facilitating fair transactions (Globerman & Shapiro, 2003;
Petrou & Thanos, 2014). Inefcient formal institutions, meanwhile,
boost risk in terms of information asymmetries, opportunity costs
(Contractor et al., 2014; Hutzschenreuter & Voll, 2008) and lack of
transparency (Javorcik & Wei, 2009).
Corruptive practices lead to an increase in costs because companies
must not only pay fair prices but also pay bribes to government ofcials.
Some authors consider corruptive practices as a tax on foreign rms
(Kouznetsov et al., 2019; Mauro, 1995; Petrou & Thanos, 2014; Voyer &
Beamish, 2004; Wei, 2000), and corruptive practices can promote un-
equal treatment of agents depending on their position in society and
who can pay more (Gaur et al., 2007; Gupta et al., 2002; Mungiu-
Pippidi, 2006). An additional cost is derived from the managerial and
employee time devoted to dealing with corrupt government ofcials
(Cuervo-Cazurra, 2016; Kaufmann, 1997; Svensson, 2005).
Previous studies have conrmed that corruptive practices do in fact
have a detrimental impact on FDI and country choice (Brada et al., 2019;
Cole et al., 2009; Collins et al., 2009; Du et al., 2008; Habib & Zurawicki,
2002; Jain, 2001; Voyer & Beamish, 2004; Wei, 1997, 2000; Wilhelm,
2002; Zhao et al., 2003). According to the institutional and agency
theories, inefcient formal institutions can create signicant uncertainty
and restrict the behaviour of foreign rms (Bailey, 2018; Brouthers,
2002; Eden & Miller, 2004; Li et al., 2018; White et al., 2018), making
corruptive practices more likely and reducing the presence of multina-
tional enterprises (MNEs) in that country (Barkemeyer et al., 2018).
Consistent with these arguments, we propose the following hypothesis:
Hypothesis 1. Corruptive practices in the host country negatively
inuence foreign rmslocation choice.
2.2. Digitalization level as an anti-corruption policy
Digitalization level involves the use of ICT, such as electronic data
management systems, the internet and communication infrastructure,
which facilitates the processing, transmission and display of information
(Charoensukmongkol & Moqbel, 2014). This also includes seeking per-
missions and demonstrating compliance with the rules, which would be
done electronically. ICT improves efciency through automated services
and by simplifying administrative procedures (Davies & Fumega, 2014).
Consequently, effective implementation of digitalization requires the
adaptation of administrative governmental processes and usersdigital
knowledge (Adam & Fazekas, 2018).
One of the main contributions of digitalization is its use as an anti-
corruption tool. Regarding the institutional context, a higher level of
digitalization improves the ow of information and increases the
transparency of formal institutions by monitoring information asym-
metries and discretional behaviours, reducing uncertainty and fostering
unbiased citizen participation (Bertot et al., 2010; Chˆ
ene, 2012;
onlund et al., 2010; Klitgaard, 1988). Level of digitalization therefore
contributes to making public institutions more efcient and responsible
(Davies & Fumega, 2014), as well as ensuring their activity is more
easily legally controllable (Rose-Ackerman, 1999).
Drawing on agency theory, the effect of ICT on corruptive practices
can be analysed from two points of view: the demand side of citizens to
government(or upward transparencyor push) and the supply side
of government to citizens(or downward transparencyor pull)
(Adam & Fazekas, 2018; Avila et al., 2011; Gr¨
onlund et al., 2010; Heald,
2006; Kossow & Dykes, 2018). Regarding the demand side, a high level
of digitalization reduces corruptive practices by monitoring public of-
cials more effectively (Pathak et al., 2007; Shim & Eom, 2008), because
greater digitalization lets citizens inform or complain about corruptive
practices. There are also fewer face-to-face encounters between public
ofcials and citizens with digitalization, which means less intermedia-
tion and the recording of all transactions in public data sets (Char-
oensukmongkol & Moqbel, 2014). Concerning the supply side,
automation of the administrative process hinders public ofcials
discretionary actions and makes all public initiatives more accessible
and visible (Castells, 2000; Soper, 2007). Accordingly, thanks to digi-
talization, the bidirectional distribution of information is more efcient
between citizens and government, which makes digitalization level a
valuable anti-corruption tool (Adam & Fazekas, 2018). In any case, the
ICT development level of the country and citizens digital skills play a
key role, because they are the necessary requisites to transparent
transactions (Davies & Fumega, 2014).
Previous empirical evidence on the link between digitalization level
and corruptive practices is scarce and inconclusive; however, some re-
sults indicate the signicant positive role of digitalization level as an
anti-corruption measure (Adomako et al., 2021; Andersen, 2009; Kim
et al., 2009; Shim & Eom, 2008). Mistry and Jalal (2012) and García-
Murillo (2013) have studied corruption perception and conrmed that,
as the digitalization level of public administration increases, corruption
perception decreases. Mistry and Jalal (2012) found that the relation-
ship was even stronger in developing countries. More specically, au-
thors such as Kleven et al. (2011) and Pomeranz (2013) conrmed that
modern electronic tax reporting systems reduced fraud and corruptive
practices. Similarly, Krolikowski (2014) examined the use of mobile
payment methods on corruptive practices and found the same effect.
Digitalization level allows the host country to provide higher quality
digital public services. A well-developed digital environment can help to
reduce communication problems by providing a positive and trans-
parent formal institutional context in which foreign rms can feel pro-
tected. This transparency reduces information asymmetries and
uncertainty, discretionary behaviour decreases and corruptive practices
are less likely to occur. Accordingly, our second hypothesis is:
Hypothesis 2. Digitalization level in a host country reduces corruptive
Fig. 1 shows the analysis model with the proposed hypotheses. Hy-
pothesis 1 proposes the negative effect of corruptive practices on loca-
tion choice and hypothesis 2 sets out that digitalization level is an anti-
corruption tool in a host country.
Fig. 1. Model of analysis.
Source: Authors own work.
A.M. Romero-Martínez and F.E. García-Mui˜
Journal of Business Research 136 (2021) 176–185
3. Method
3.1. Data and population
This study was based on the entire population of the 64 inter-
nationalized Spanish hotel chains. The Spanish industry is concentrated
around the top six chains according to the global number of hotels: Meli´
Hotels International, NH Hotel Group, Barcel´
o Hotel Group, RIU Hotels
and Resorts, Eurostars Hotels and Resorts and AC by Marriot. In 2018,
the top ve most attractive destinations for the Spanish hotel industry
were (see Table 1): the USA (181 establishments), Germany (113 es-
tablishments), Italy (100 establishments) Mexico (93 establishments)
and the Dominican Republic (66 establishments).
We created our dataset from two complementary secondary sources
on the Spanish tourism industry: Hosteltur and the Global Competi-
tiveness Index (GCI) of countries from the WEF report. Because we have
adopted an institutional country characteristics approach, the unit of
analysis is the host country. Some countries where Spanish hotel chains
operate were not included in the GCI, however, so those location choices
were eliminated from the empirical analysis (Andorra, Aruba, Bahamas,
Cuba, Puerto Rico and Saint Martin).
Hosteltur, as the Spanish mass media leader for specialized profes-
sional tourist information, publishes the International Presence Ranking
(2018) of Spanish hotel chains. The reliability of this information source
is supported by several academic researchers (i.e. Andreu et al., 2017;
Escobar-Rodríguez & Carvajal-Trujillo, 2013; García-Mui˜
na et al., 2020;
Quer et al., 2007; Romero-Martínez et al., 2019). The WEF GCI assesses
the competitive capacity of 138 economies, providing insight into the
drivers of their productivity and prosperity. The GCI is one of the data
sets most often used when studying corruption (Cuervo-Cazurra, 2016).
Before undertaking measurement of variables and testing the hypothe-
ses, data were standardized when needed.
3.2. Measures
Dependent variable. The dependent variable, host location choice,
considers the international presence of Spanish hotel chains in each
country. We included the number of Spanish hotel establishments in
every country where the hotel chains are present. We used data from the
international presence ranking (2018).
Independent variables. We measured corruptive practices, ac-
cording to the broad conception of corruptive practices adopted in this
paper, by means of seven items from the GCI (Collier, 2002): legal
framework efciency (regulation), legal framework efciency (dispute),
strength auditing, judicial independence, reliability of police services,
organized crime and intellectual property. We built our measures by
drawing on the previous literature (Godinez & Liu, 2015; Shelley, 1998;
Varese, 1997). We obtained a one-dimension factor through exploratory
factor analysis (EFA). Corruptive practices are latent complex phe-
nomena and non-directly observed, so they are measured by several
items that can be observed. EFA simplies the interrelated measures and
identies the underlying factor structure. The analysis results are shown
in Table 2. All items loaded on a single factor, conrming a one-
dimension construct. The Cronbachs alpha value shows that the scale
created is reliable. Moreover, KMO and Bartlett tests show that the data
are valid to run the factor analysis.
Besides corruptive practices due to the weaknesses of formal in-
stitutions, such practices can also be favoured by socio-cultural informal
aspects highly rooted in society values (Collier, 2002; Judge et al., 2011;
Svensson, 2005). According to the literature, however, digitalization
level only affects corruptive practices due to poor formal institutions
(Charoensukmongkol & Moqbel, 2014). Therefore, we removed the
socio-cultural dimension from the whole corruptive practices factor.
To measure the digitalization level of a country, we built a one-
dimension variable using EFA. Several items from the GCI were
selected, taking into consideration the adoption of digital initiatives by
governments (the e-participation index), the digital infrastructure
available to the population (mobile and xed broadband availability)
Table 1
Top six internationalized Spanish hotel chains in 2018 with more than 50 in-
ternational hotels.
Hotel Chain International hotels Number of foreign countries
NH Hotel Group 253 28
o Hotel Group 181 21
a Hotels International 145 33
AC by Marriott 76 16
Eurostars Hotel Company 63 18
RIU Hotels & Resorts 58 15
Source: Authorsown work from (2018).
Table 2
Measurement of corruptive practices: Factor analysis results.
Total variance explained
Items Initial auto-value Sums of extraction of squared loads
Total % of variance % accumulated Total % of variance % accumulated
Legal framework efciency (regulation) 5.503 78.615 78.615 5.503 78.615 78.615
Legal framework efciency (dispute) 0.613 8.757 87.371
Strength auditing 0.477 6.814 94.186
Judicial independence 0.158 2.254 96.440
Reliability of police services 0.093 1.332 97.772
Organized crime 0.085 1.209 98.981
Intellectual property protection 0.071 1.019 100.000
Items Factor loads
Legal framework efciency (regulation) 0.913
Legal framework efciency (dispute) 0.911
Strength auditing 0.788
Judicial independence 0.949
Reliability of police services 0.913
Organized crime 0.787
Intellectual property protection 0.929
Cronbachs Alpha 0.918
KMO 0.877
Bartlett test
Approx. 1175.997
Fd 21
Sig. 0.000
A.M. Romero-Martínez and F.E. García-Mui˜
Journal of Business Research 136 (2021) 176–185
and the proportion of internet users in the country. Internet and tele-
communication digital infrastructures are possibly as important as e-
government practices (Adam & Fazekas, 2018; García-Murillo, 2013), so
our measurement of digitalization level includes all of these aspects.
Other related items were eliminated (digital skills of population or bre-
optic internet) because the reliability of the complete scale was signi-
cantly reduced when including them (Cronbachs alpha <0.7).
The main results are presented in Table 3. The Cronbachs alpha
value shows that the scale created is reliable. Moreover, the KMO and
Bartlett tests show that the data are valid to run the factor analysis.
Control variables. With a view to removing any interference that
might overshadow the analysis of the results, the control variables
chosen are those corresponding to some factors that may affect foreign
location choice in the hospitality industry. We have included variables
referring to geographic location, socio-economic development and in-
ternational openness. We used data from GCI. The Geographic location
was operationalized by time zones differences. The higher the time
zones differences, the more complex communication (Dow & Karunar-
atna, 2006; Stein & Daude, 2007). Socio-economic development was
measured thought the unemployment rate, income GINI (a measure of
inequality of wealth, from 0 to 100) and gender gap (from 0 to 100).
Then, socio-economic development of the country refers to the stability
of the country and determines its attractiveness (Antonio & Tufey,
2014; Bimber, 2000; Gillwald et al., 2010; Hilbert, 2011). Finally, in-
ternational openness is operationalized by FDI inward ow over GDP.
The openness entails a more attractive country to international investors
(Cuervo-Cazurra, 2008; Wei, 2000).
4. Results
The empirical verication of the hypotheses was undertaken using
multiple linear regression models. The regression model is a statistical
technique widely used for prediction and forecasting in this eld and for
estimating dependent relationships. This technique is suitable for testing
the causal relationships stated in the hypotheses because the impact of
some of the independent variables (digitalization level and corruptive
practices) on the dependent variable (country choice) is studied (Hair
et al., 1999). Data do not present any multicollinearity problems,
because correlations are lower than 0.9 (see Appendix, Table A), VIF
(Variance Ination Factor) values are below 4.0 and tolerance indicators
are far from 0.01.
Regarding control variables, socio-economic development level
(measured by gender gap and income GINI) of the host country appears
to be inversely related to corruptive practices. In addition, the greater
the international openness, operationalized by FDI inward ow over
GDP, the lower the level of corruptive practices in the host country.
Model I shows the relationship between corruptive practices and loca-
tion choice. Results conrm the signicance of the relationship between
Table 3
Measurement of digitalization level: Factor analysis results.
Total variance explained
Items Initial auto-value Sums of extraction of squared loads
Total % of variance % accumulated Total % of variance % accumulated
E-participation index 3.062 76.554 76.554 3.062 76.554 76.554
Mobile broadband subscription 0.422 10.548 87.102
Fixed broadband internet 0.319 7.975 95.077
Internet users 0.197 4.923 100.000
Items Factor loads
E-participation index 0.856
Mobile broadband subscription 0.842
Fixed broadband internet 0.883
Internet user 0.917
Cronbachs Alpha 0.799
KMO 0.816
Bartlett test
Approx. 331.078
Fd 6
Sig. 0.000
Table 4
Corruptive practices and country choice: Main results.
Model I Standard
t Sig.
(Constant) 1.715 1.057 0.293
Gender Gap 0.211 2.491 1.853 0.067*
5-year average FDI
inward ow (% GDP)
0.173 0.015 1.694 0.094*
Income GINI 0.380 0.019 2.867 0.005***
Unemployment rate 0.115 0.024 1.000 0.320
Time zone differences 0.138 0.053 1.158 0.250
Digitalization level 0.096 0.256 0.478 0.634
Corruptive practices 0.488 0.296 2.369 0.020**
Resume of Model I
F Sig.
0.457 0.210 1.11637329 3.125 0.006***
Relationship is signicant at 0.1 level.
Relationship is signicant at 0.05 level.
Relationship is signicant at 0.01 level.
Table 5
Digitalization level and corruptive practices: Main results.
Model II Standard
t Sig.
(Constant) 0.613 2,090 0.040
Gender Gap 0.127 0.883 2,217 0.029**
5-year average FDI
inward ow (% GDP)
0.112 0.005 2.153 0.034**
Income GINI 0.082 0.007 1.222 0.225
Unemployment rate 0.001 0.009 0.011 0.991
Time zone differences 0.114 0.019 1.890 0.062*
Digitalization level 0.782 0.057 12.253 0.000***
Resume of Model II
F Sig.
0.881 0.777 0.41184 49.258 0.000***
Relationship is signicant at 0.1 level.
Relationship is signicant at 0.05 level.
Relationship is signicant at 0.01 level.
A.M. Romero-Martínez and F.E. García-Mui˜
Journal of Business Research 136 (2021) 176–185
them, as expected. Therefore, Hypothesis 1 is accepted.
Model II shows the role of digitalization level in corruptive practices.
As shown in Table 5, the digitalization level of the foreign country
signicantly reduces the countrys level of corruptive practices, as pre-
dicted. Accordingly, Hypothesis 2 is accepted.
It is interesting to observe how a higher digitalization level signi-
cantly reduces corruptive practices (Model II); however, digitalization
does not have a signicant impact on location choice (Model I). This
surprising result led us to explore a possible mediation role of corruptive
practices between digitalization level and country choice. To analyse the
existence of a mediated relationship between digitalization level and
location choice by corruptive practices, we conducted an additional
linear regression (Model III) to verify the fullment of the three basic
conditions that prove the existence of a mediation relationship (Baron &
Kenny, 1986).
The rst condition implies that the mediator variable corruptive
practices must signicantly affect the dependent variable that is, the
location choice (Model I). Verication of Hypothesis 1 conrms this rst
condition for the mediation relationship. The second condition is that
digitalization level must affect corruptive practices in the foreign
country (Model II). The verication of Hypothesis 2 conrms this second
condition for the mediation relationship. The third condition indicates
that digitalization level must affect country location choice (Model III).
The results are consistent with this condition, because the relationship
between digitalization level and country choice is signicant. Accord-
ingly, the greater the digitalization level of the host country, the greater
the number of establishments of Spanish hotel chains in that location.
The three previous conditions all hold in the predicted direction. To
conrm the mediation effect, the direct effect of the digitalization level
on country choice must be less in Model I (including the mediating
variable) than in Model III (excluding the mediating variable). Indeed,
perfect mediation exists if digitalization level has no effect when the
corruptive practices variable is also controlled. As shown in Table 4
(Model I), there is no impact of digitalization level on location choice
when corruptive practices are included in the regression model; how-
ever, digitalization level is highly signicant for country choice in Model
III, when corruptive practices are not included (Table 6). For the pop-
ulation of hotel chains being analysed, we can thus observe a perfect
mediator role for corruptive practices between digitalization level and
country choice. Nevertheless, this relationship demands more research
in the future.
5. Discussion and conclusions
5.1. Discussion
Based on a moralist perspective of corruption, in this paper we
studied whether host corruptive practices hinder country choice; we
then analysed the role of digitalization level as a potential anti-
corruption tool to make the host country more attractive for interna-
tional investors. We showed that developed socio-economic and inter-
nationally open environments are inversely related to corruptive
practices. The socio-economic development of the host country de-
termines the strength of the country and its attractiveness (Antonio &
Tufey, 2014; Hilbert, 2011), and international openness boots attrac-
tiveness of the country as well (Cuervo-Cazurra, 2008).
With respect to the hypotheses, the results conrmed that corruptive
practices negatively affect country choice. Spanish hotels prefer going to
those countries with lower levels of corruptive practices (Hypothesis 1).
The evidence is consistent with prior research that showed the harmful
effect of corruption on FDI and country choice (Brada et al., 2019; Cole
et al., 2009; Collins et al., 2009; Javorcik & Wei, 2009; Nguyen & van
Dijk, 2012; Wei, 2000).
Moreover, our ndings supported the expected role of digitalization
level. We conrmed that a higher digitalization level signicantly re-
duces corruptive practices (Hypothesis 2). This result is coherent with
scarce previous empirical research that found the effective role of digi-
talization as an anticorruption tool that can positively inuence the
monitoring of corruptive practices (Andersen, 2009; García-Murillo,
2013; Kim et al., 2009; Mistry & Jalal, 2012; Shim & Eom, 2008).
Although studying the effect of digitalization level on country choice
was not the objective of this paper, we observed the absence of a sig-
nicant relationship between the two variables. This was an unexpected
result, because governments have recently been making efforts to
enhance digitalization levels to improve competitiveness. This inter-
esting nding led us to carry out an exploratory test on the mediation
effect of corruptive practices between digitalization level and country
choice. The results conrmed a perfect mediation role for this variable.
This result is consistent with previous research that acknowledges the
strategic role of digitalization level strengthening the institutions of the
host country and monitoring corruptive practices (Adam & Fazekas,
2018; Davies & Fumega, 2014).
5.2. Conclusions
Corruptive practices are rooted in every society, albeit to different
degrees (Godinez & Liu, 2015). They describe the country context
(Kouznetsov et al., 2019) and inuence its attractiveness for foreign
investment (Brada et al., 2019; Javorcik & Wei, 2009; Judge et al., 2011;
Rodriguez et al., 2006). In the current globalized context, governments
are aware of the harmful socio-economic effects of corruption and
devote signicant resources to ghting this scourge (Gorsira et al., 2018;
Petrou & Thanos, 2014).
Accordingly, IB scholars have increasingly paid attention to this
issue, but empirical results are far from conclusive (Farrales, 2005;
Nguyen & van Dijk, 2012). The existence of two conicting theoretical
perspectives to corruptive practices moralist and revisionist (Rose-
Ackerman, 1999) may serve to explain the lack of compelling results,
at least in part. While the moralists punish corruptive practices (Javorcik
& Wei, 2009), the revisionists consider them unavoidable or even
necessary in transactions (Helmy, 2013). This paper was based on the
predominant moralist perspective of corruption, given the importance
that ethics and corporate social responsibility have in todays decision-
making (Ghoul et al., 2019). In line with this, the attractiveness of the
host country depends on the absence of corruptive practices (Rose-
Ackerman, 2007). When MNEs are not accustomed to corruptive prac-
tices in their home countries, they are not willing to accept uncertainty
and lack of transparency in the host country (Javorcik & Wei, 2009;
Table 6
Digitalization level and country choice: Main results.
Model III Standard
t Sig.
(Constant) 1.301 0.754 0.452
Gender Gap 0.167 1.857 1.634 0.10*
5-year average FDI
inward ow (% GDP)
0.132 0.009 1.453 0.149
Income GINI 0.301 0.015 2.570 0.012**
Unemployment rate 0.091 0.019 0.892 0.374
Time zone differences 0.045 0.044 0.438 0.663
Digitalization level 0.495 0.132 4.199 0.000***
Resume of Model III
F Sig.
0.392 0.154 1.02620665 3.277 0.005***
Relationship is signicant at 0.1 level.
Relationship is signicant at 0.05 level.
Relationship is signicant at 0.01 level.
A.M. Romero-Martínez and F.E. García-Mui˜
Journal of Business Research 136 (2021) 176–185
Petrou & Thanos, 2014), which involves costs and risks (Barkemeyer
et al., 2018).
Our empirical evidence is consistent with the general hypothesis
that, all else being equal, rms from developed countries (such as Spain)
prefer countries with more efcient and strong formal institutions,
where corruptive practices are less common. Spain is among the less
corrupt countries worldwide, as it is in the highest quartile (30/198) in
the Corruption Index (Transparency International (2019) ()2019, 2019).
MNEs from developed countries may choose to avoid foreign countries
with inefcient formal institutions because of uncertainty and lack of
transparency (Arregle et al., 2013; Nielsen et al., 2017), because these
countries incur agency costs in transactions between MNEs and local
agents in host countries. Thus, the results of this study conrm that a
host country requires a favourable environment and solid institutions to
attract FDI.
The control of corruptive practices by the extended implementation
of ICT should be a priority for governments and policymakers (Adam &
Fazekas, 2018). Accordingly, we analysed the effect of digitalization
level as an anti-corruption tool. A higher digitalization level provides an
opportunity to monitor and control corruptive practices, because it is a
means to reduce information asymmetries and discretionary behaviours,
as digital systems record every transaction between agents (Davies &
Fumega, 2014; Kossow & Dykes, 2018). Public ofcers activities are
also better controlled and revealed because face-to-face interactions are
remarkably reduced (Charoensukmongkol & Moqbel, 2014; Shim &
Eom, 2008).
In addition to testing the two hypotheses of this study, we observed a
mediation effect of corruptive practices between digitalization level and
country choice. We concluded that investment in digitalization should
be oriented towards monitoring corruptive practices, because digitali-
zation level is an instrument or tool that must be adjusted to reach a
strategic objective, such as reducing corruptive practices. This inter-
esting exploratory nding deserves greater attention from academics,
practitioners and policymakers.
Our study makes some theoretical contributions to the IB literature.
First, the paper analysed the effect of corruptive practices on country
choice, because IB researchers have called for more attention to the
causes of country selection (Goerzen et al., 2013; Kim & Aguilera, 2016;
Rugman et al., 2011). Corruptive practices are more hazardous for ser-
vice industries, such as the hospitality sector, because companies must
establish a physical presence in the host country and operations and
distribution take place simultaneously (Pl´
a-Barber & Ghauri, 2012).
These service businesses therefore require regular interaction with local
agents, who are more vulnerable to corruptive practices. Second, we go
beyond the previous literature by dening corruption in a wide and
multi-faceted sense (Cuervo-Cazurra, 2016). Similarly, we presented a
broad denition of digitalization level that includes e-government
administration, technical development level of infrastructure and the
technical skills of citizens (Charoensukmongkol & Moqbel, 2014).
Finally, we studied the role of digitalization level by distinguishing be-
tween corruptive practices related either to formal institutional weak-
ness or to socio-cultural values (Kouznetsov et al., 2019). In this paper
we only focused on formal institutions, because governments may only
inuence them through ICT like digitalization.
We also offer interesting practical implications for governments,
policymakers and MNEs. Due to globalization, monitoring corruptive
practices is essential in every country, but particularly in developing
ones, as companies from developed countries are more reluctant to
invest there (Doh et al., 2003; Frei & Muethel, 2017). Indeed, from an
economic point of view, corruption can be considered a sort of tax that
may inhibit MNEs from choosing developing countries (Kouznetsov
et al., 2019). This issue should be a preferential point in every govern-
mental agenda, especially in developing countries that are more
dependent on foreign funds (Johnson, 2018). Digitalization level has
emerged as an effective anti-corruption technical tool that can assist the
government and policymakers (Adam & Fazekas, 2018; Bertot et al.,
2010; Qian & Sandoval-Hernandez, 2016; Schuppan, 2009). Moreover,
activities such as the engagement of citizens with e-government, the
training of public ofcers and the redenition of administrative pro-
cedures are examples of complementary resources to control corruptive
practices (Davies & Fumega, 2014).
This study has some limitations that we would like to overcome in
future research. On the one hand, organizational variables regarding
hotel chains were not included in this paper, so hotel industry behaviour
is mainly explained by exogenous variables. On the other hand, the
study is based on the Spanish hotel industry, so the results may be biased
by the local idiosyncrasy of Spanish MNEs.
In combatting corruptive practices, governments should focus on
strengthening formal institutions because the stronger the political,
legal and judicial systems, the fewer the corruptive practices in the
short/middle term. Moreover, in the long term, well-developed formal
institutions may produce societies and citizens that are more reluctant to
be involved in corruptive behaviours, thus creating a kind of virtuous
cycle when these new socio-cultural values against corruption reinforce
the role of solid formal institutions. Studying this virtuous cycle could be
a promising line for future research.
From a longitudinal approach, future research should study the
interaction between formal institutions, socio-cultural values and
corruptive practices, as well as its effect on country choice (Godinez &
Liu, 2015; Murphy et al., 1993; Svensson, 2005). Another line for future
Table A
Correlation matrix.
1 2 3 4 5 6 7 8
1. Gender Gap Pearson correlation 1
2. 5-year average FDI inward ow %GDP Pearson correlation 0.023 1
Sig. 0.793
3. Income GINI Pearson correlation 0.036 0.062 1
Sig. 0.700 0.496
4. Unemployment rate Pearson correlation 0.057 0.009 0.283
Sig. 0.517 0.918 0.002
5. Time zone differences Pearson correlation 0.056 0.088 0.252
Sig. 0.530 0.306 0.005 0.001
6. Digitalization level Pearson correlation 0.369
0.161 0.466
0.220* 0.073 1
Sig. 0.000 0.062 0.000 0.011 0.400
7. Corruptive practices Pearson correlation 0.280
0.149 0.313
0.209* 0.019 0.742
Sig. 0.001 0.083 0.000 0.015 0.824 0.000
8. Country choice Pearson correlation 0.052 0.077 0.031 0.034 0.041 0.231
0.103 1
Sig. 0.559 0.371 0.733 0.697 0.636 0.007 0.231
Correlation is signicant at 0.01 (2-tail).
Correlation is signicant at 0.05 (2-tail).
A.M. Romero-Martínez and F.E. García-Mui˜
Journal of Business Research 136 (2021) 176–185
research could be the analysis of corruption distance between home and
host country to test the possible difference between MNEs from devel-
oped and developing countries when choosing foreign countries. Some
MNEs choose corrupt host countries because they feel comfortable in
corrupt environments because they are used to such climates in their
home countries. It can therefore be expected that MNEs from corrupt
home countries would be less reluctant to enter corrupt host countries
(Brada et al., 2019; Godinez & Liu, 2015, 2018; Qian & Sandoval-
Hernandez, 2016; Zhao et al., 2003). MNE decisions could also
depend on other host country characteristics that make those destina-
tions attractive, regardless of the presence of corruptive practices.
Future studies could also extend location choice by including the
mode of entry in the foreign country, because some authors suggest that
the effect of corruptive practices changes depending on the type of in-
vestment (Cuervo-Cazurra, 2016). Certain organizational characteristics
could be added to the study as well, specically those related to
corporate social responsibility and reputation, to determine if rms that
are more aware of the importance of business ethics are more reluctant
to invest in corrupt countries (Ghoul et al., 2019). Additional organi-
zational factors to study could be the international experience of man-
aging in poor institutional contexts. Finally, non-linear relationships
between digitalization level, corruptive practices and country choice
could be analysed (Charoensukmongkol & Moqbel, 2014).
Declaration of Competing Interest
The authors declare that they have no known competing nancial
interests or personal relationships that could have appeared to inuence
the work reported in this paper.
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Dr. Ana M. Romero-Martínez is Associate Professor of Management and Entrepreneur-
ship at Faculty of Economics and Business, Complutense University of Madrid (UCM). She
is vice dean for International and Institutional Affairs at Faculty of Commerce and Tourism
(UCM). She held visiting scholar positions at Kings College London, University of London
(2015), SOAS, University of London (2016), University of Birmingham (2018), and
Kingston University of London (2019). Her research focuses on international business in
hotel industry, entrepreneurship and innovation and has been published in top academic
journals such as Journal of World Business, International Business Review, Management
International Review, Service Business or Group Decision and Negotiation, and books in
editorials such as Springer or Thomson Reuters.
Fernando E. García-Mui˜
na PH.D in Economics and Business Studies from Complutense
University of Madrid. He is currently Associate Professor of Business Administration at Rey
Juan Carlos University. His eld of research focuses on Strategic Management. He has
published several articles in indexed scientic journals such as Technovation,Technological
Forecasting and Social Change, Business Research Quarterly, International Journal of Tech-
nology Management, International Journal of Production Research, International Journal of
Contemporary Hospitality Management, International Journal of Life Cycle Assessment. He is in
charge of several research projects at national and international level related to sustain-
ability and circular economy.
A.M. Romero-Martínez and F.E. García-Mui˜
... Looking at the dynamics of the Central and Eastern European (CEE) countries at the time of joining the EU, they experienced severe and moderate degrees of corruption, which slightly decreased over time; this was due to the application of measures particularly aimed at the transparency of public services and thanks to European funds access (Podkaminer, 2015). Sometimes, this allowed the implementation of digitalization in the public sector, where, in general, the most serious acts of corruption have been detected (Bayar et al., 2020;Romero-Martínez & García-Muiña, 2021). It is not possible to equate the efficiency obtained in the public sector with that in the private sector because the objectives pursued are not necessarily common, in the sense that the public dimension also incorporates social problems (Masca et al., 2019). ...
Research background: The transformations induced by global challenges call for new approaches towards competitiveness and thus require a consistent rethinking of strategies and mechanisms so that they could be better adapted to the constantly changing context. Prior to the European Union (EU) accession, the Central and Eastern European (CEE) states began a broad process of economic reforms, including trade liberalization, mass privatization, exchange rate liberalization, all of which led to a wider opening to new markets, the creation of new opportunities for production and to ensuring the competitiveness of companies on foreign markets. By far, the most important step in the post-communist period was joining the EU, achieved after 2004. Over time, these states have faced, on the one hand, issues related to addressing systemic vulnerabilities, and on the other hand, finding the most appropriate measures to induce competitiveness. The influence of public policies on competitiveness is still an issue that needs to be debated, our study proposing to examine the reaction of external competitiveness to the increase of government spending and corruption. Purpose of the article: The aim of this paper is to analyze the impact of fiscal policies and corruption on the external competitiveness of the eleven countries from Eastern Europe (Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) for the period 1995?2020. The choice of this time interval is to better capture the trinomial relationship between competitiveness, fiscal policy and corruption before and after the process of integration of the CEE states into the EU. Methods: The methodology chosen is based on ARDL (Autoregressive Distributed Lag) with structural breaks, the period taken into account being 1995?2020. The Unit root test of augmented Dickey?Fuller ADF (2016) was used to assess the time series stationarity. The test developed by Bai and Perron (2003) is applied to detect structural breaks, by resorting to the LM test. The tests for the cointegration between the considered variables, using the ARDL model, proposed by Pesaran et al. (2001), were also part of the research. The causality test of Granger et al. (2000) was used to assess the conditionality between the indicators. By applying these methods, it was highlighted that, especially after 2007, in the states under analysis, expansionary fiscal policies have led to internal devaluations of the currency, which ultimately increased external competitiveness, measured as real effective exchange rate. Instead, corruption has a negative impact on competitiveness. Findings & value added: The obtained results point out the relationship between competitiveness, fiscal policy and corruption in CEE countries. In the case of those that have a high competitiveness, even if there are large government expenditures, there is also an economic environment conducive to the implementation of measures that generate added value on a large scale. Conversely, in countries where corruption is high, the impact of government fiscal policies on competitiveness is reduced due to the negative effects caused by this phenomenon. Our study brings at least two contributions to the literature. First of all, the research shows how a growth in public spending affects the competitiveness of CEE economies through the real exchange rate. Secondly, it takes into account the phenomenon of corruption applied to Eastern countries, emphasizing a decrease in the external competitiveness of these economies in response to the manifestation of corruption.
... Hospitality sector has been experiencing corporate fraud cases and scandals such as fraudulent business practices, bribery and dishonest policies (Papathanassis et al., 2018). Such cases have led to reduction of value for shareholders, job losses and unhealthy To speak or not to speak competition, besides morally impacting society and damaging the image of the country (Romero-Martínez and García-Muiña, 2021). It is therefore important for organizations to work upon creating an ethical environment to inspire ethical behavior and promote moral values among employees (Robina-Ramírez, 2020), so that they are encouraged to highlight and address misconduct in organizations (Cheng et al., 2017). ...
Purpose Using self-determination theory as the theoretical framework, the study examines the role of workplace spirituality in motivating internal whistleblowing in an organization and whether it gets enhanced by ethical leadership and moral courage of an employee. Design/methodology/approach The study was administered to 312 employees belonging to the hotel industry in north India. A three-waves study with a gap of one month each was used for data collection. The study used AMOS and PROCESS Macro to examine the hypothesized relationship. Findings The study found a positive association between workplace spirituality and internal whistleblowing, and a parallel mediating impact of employee’s moral courage and ethical leadership on workplace spirituality and internal whistleblowing relationship. Practical implications The work suggests that by recognizing and enforcing the motivating factors that encourage an employee to blow the whistle and reveal illegal, immoral or illegitimate organizational practices, an organization may be able to maintain an ethical stance and create a positive image of itself. Originality/value The unique contributions of this study include determining the role of workplace spirituality in supporting internal whistleblowing, especially in the Indian context. Keeping in view the huge losses incurred by hospitality sector during pandemic, internal whistleblowing by employees will create a positive image for the organizations and help in revival.
... However, in the digital context, the adoption of digital technologies, such as mobile devices, 5G, and electronic data management systems, promotes the flow of information and improves the transparency of enterprise management [50]. To a certain extent, the improved corporate governance enhances the managerial effort to invest in environmental innovation [9]. ...
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With the increasingly prominent energy and environmental problems, environmental innovation has become a critical path to achieving the goal of coordinating economic development and environmental protection fundamentally. This study aims to examine the impacts of executive overconfidence on environmental innovation and the mediating role of digital transformation. We conduct empirical tests based on the panel data of Chinese publicly listed enterprises during the period of 2007–2019. The results exhibit that (a) executive overconfidence can significantly promote environmental technology innovation but has no obvious effect on environmental management innovation; (b) executive overconfidence can significantly enhance digital transformation, and, accordingly, digital transformation can significantly promote environmental technology innovation and environmental management innovation; (c) industry competition and economic policy uncertainty can enhance the positive effect of executive overconfidence on digital transformation; and (d) a firms’ asset size can enhance the impact of digital transformation on environmental technology innovation; internal control positively moderates the impact of digital transformation on environmental technology innovation and negatively moderates the impact on environmental management innovation. This study not only breaks the stereotype about overconfidence and confirms its positive impact on digital transformation and environmental innovation but also provides insights for enterprises to improve environmental innovation through digital transformation.
... Data content diversity means that the dataset contains various forms of structured and unstructured data, data response speed requires more real-time data processing needs, and low data value density means that, in today's society, where large-scale data have become the norm, the massive amount of data must be analyzed to obtain valuable content [8]. Today, with the rapid development of the Internet and the Internet of ings, Big Data is not just a technology, but the core idea of Big Data in management is to regard data as an important asset, to discover knowledge and useful information from data, and to transform it into enterprise value. ...
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The 43 national cross-border e-commerce policies promulgated by the Chinese government in recent years are selected as the research samples, and the PMC index model is applied to evaluate the mechanism design based on the IoT and data-driven innovation mechanism of international business finance statistics. On this basis, the implementation effects of specific policies on cross-border e-commerce in China are evaluated and analyzed, and the role of national macropolicies in guiding local policies is also discussed, with the aim of providing a reference basis for the Chinese government to formulate relevant policies, as well as providing new ideas and methods for the evaluation of cross-border e-commerce policies.
... An interesting research problem was undertaken in one study [33], which concerns the use of digitization solutions and technologies for monitoring corrupt practices and unethical behavior in the hotel sector. The authors carried out an analysis that shows that in developed countries with a high level of digitization, the possibility of corrupt practices is limited. ...
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The article aims to identify modern technological solutions in the field of automation and robotization of business processes that change the way hotel enterprises operate in the face of the global COVID-19 pandemic. Therefore, the research problem was expressed in the form of a question: what tools favor the dynamic digital transformation of hotel functioning models and the implementation of the paradigm of intelligent and autonomous entities operating in the conditions of the COVID-19 pandemic on the hotel market? During the empirical research, the use and implementation of new solutions in the field of innovative technologies supporting the optimization of processes taking place in hotel enterprises were considered. In addition, technologies and tools were identified that are considered strategic from the perspective of implementing the concept of an autonomous hotel carried out under the influence of the crisis related to the COVID-19 pandemic. Due to the specific purpose of the article, a survey was conducted using the questionnaire method with the Computer Assisted Web Interview technique alongside a self-developed questionnaire. The survey was carried out in June-September 2021 among 462 representatives of hotel companies operating in the three-, four- and five-star standards. The results of the diagnostic survey were statistically analyzed using the Statistica and RStudio software packages. To interpret the obtained data, the descriptive method, principal component analysis, and cluster analysis were used. As a result of the conducted research, it was noticed that the COVID-19 pandemic obligated hotels to automate processes that made it possible to connect devices within digital ecosystems and to optimize processes inside vertical and horizontal value chains. Such activities enabled the creation of a new model of hotel functioning referred to as an autonomous enterprise. Nowadays, one of the most important strategic behaviors of hotel entities is the ability to quickly counteract crises resulting from the COVID-19 pandemic and the related choice of the right course of action, as well as the ability to immediately make the right decisions. The research results may motivate the implementation of new technologies in the area of transforming and developing digital business models by hotels. The issues presented in the article are an attempt to fill the gap by pointing out practical experiences related to the use of individual technological solutions and their effectiveness in process automation and implementation of autonomous models of functioning of entities in the hotel services sector.
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Starting with the natural credit relationship between financial institutions and enterprises, this paper examines the relationship between distance-based access to credit and green innovation by using the data of financial licenses and listed enterprises. Based on the resource dependence theory, the authors use the geographical location of bank branches and enterprises to build micro-level credit access indicators. It shows that enterprises with better access to credit have more motivation to carry out green innovation. Taking the number of branches of the Bank of China in 1937 as an instrumental variable, it still supports the above results. Its influence lies in the reduction of financing constraints of enterprises. This paper further discusses the impact of green finance and digitization. The development of green finance and digitization could replace the benefits of distance-based access to credit. Combined with the transformation process of traditional banks in the future, this paper puts forward some policy suggestions to promote green innovation and low-carbon development.
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This study focuses on the effect of perceived organizational support on the prohibitive voice of knowledgeable talents and on the factors influencing that voice during the COVID-19 pandemic in China. Grounding our research in social exchange theory and the Chinese sociocultural background, we collected data from 714 questionnaires from universities in Zhejiang Province and analysize by linear regression and found, first, that perceived organizational support significantly increased the prohibitive voice of knowledgeable talents and, second, that in the relationship between perceived organizational support and the prohibitive voice of those talents, the level of digitalization level of an organization has a positive the effect of perceived organizational support on prohibitive voice behavior. This study enriches the theory of voice behavior, helps universities understand the behavioral patterns of knowledgeable talents and guides the cultivation of an atmosphere with prohibitive voice behavior.
Outward foreign direct investment (OFDI) from emerging economies in the hospitality industry, the hotel sector in particular, has drastically increased in recent years. Based on Dunning's eclectic paradigm/Ownership-Location-Internalization (OLI) theory and the Investment Development Path (IDP) theory, the OFDI in the hotel sector was assessed from the home country's perspective using an inward FDI (IFDI) approach. Using China as a case study, this paper employed panel data and a negative binomial regression method to examine the impact of IFDI on hotel OFDI. The empirical findings showed that hotel-related IFDI is an important source of the ownership advantage of China's hotel OFDI. Meanwhile, China's IFDI in the hotel industry appear to exert positive and significant effects on its hotel OFDI. Furthermore, international market proximity, economic development, and tourism development were found to moderate significantly these effects. Finally, additional robustness checks showed that the results are reliable.
Purpose This study aims to highlight the negative effects of innovation with regard to innovation typologies and human, organizational, economic and societal variables in local authorities. Design/methodology/approach To achieve the above objective, radial basis function, based on Softmax activation function, and partitioning variable, is applied on a sample of Moroccan local authorities. Findings The findings show that the typologies of innovation that significantly impact the aforementioned variables are standard innovation/tailor-made innovation, social innovation/commercial innovation and incremental innovation/breakthrough innovation. They also reveal that the modalities considerably impacted by innovation are deviance in reaction, procedural injustice, increase of hidden costs and negative effect on ethics-culture. Originality/value To the best of the authors’ knowledge, this study is original in that it can contribute to the research in the field of innovation, as it deals with its negative effects in terms of typologies, which are rarely processed in innovation research. Additionally, to overcome these negative effects, this work uses neural networks that are very scarcely used in such studies on innovation.
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Makale odak noktası, dijitalleşme düzeyinin etkisiyle yeşil lojistik uygulamalarının Türk lojistik işletmelerinin lojistik performansı üzerindeki etkisini araştırmaktır. İlk olarak, Dijitalleşme Düzeyi (DD), Yeşil Lojistik (YL) ve Lojistik Performans (LP) ile ilgili literatür incelendi. Yapıların regresyon ağırlıklarını ve önemini belirlemek için 320 katılımcıdan toplanan veriler üzerinde faktör analizi yapılmıştır. Yeşil lojistik uygulamaların benimseme yapıları, yapısal eşitlik modelleme (YEM) yaklaşımı kullanılarak analiz edildi. Araştırma sonucunda, Dijitalleşme Düzeyi (DD) seviyesindeki artışın işletmelerin yeşil lojistik faaliyetleri (YL) uygulamasını desteklediği belirlenmiştir. Ayrıca, dijitalleşme düzeyindeki (DD) artışın dolaylı olarak lojistik performansta (LP) artışa neden olduğu ve işletmelerin yeşil lojistik (YL) uygulama düzeyinin artmasının lojistik performansı da (LP) artıracağı belirlenmiştir. Dijitalleşme Düzeyi (DD), hem yeşil lojistik (YL) hem de lojistik performans (LP) ile pozitif ilişkilidir. Ayrıca yeşil lojistik (YL) ve lojistik performans (LP) ile de pozitif ilişkilidir. Sonuçlar, işletmelerin yeşil lojistik (YL) faaliyetlerini yürüterek ve dijitalleşme düzeyi (DD) seviyelerini yükselterek lojistik performanslarını (LP) iyileştirebileceklerini göstermektedir. Hipotezlerin test edilmesi sonucunda, dijitalleşme düzeyinin (DD) yeşil lojistiği (YL) etkilediği, yeşil lojistiğin (YL) lojistik performansı (LP) etkilediği ve dijitalleşme düzeyinin (DD) yeşil lojistik (YL) yoluyla lojistik performansı (LP) etkilediği bulunmuştur.
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This paper contributes to international business literature by investigating the relationship between perceived corruption and the degree of internationalization (DoI) through business process digitization (BPD). Moreover, the paper examines the moderating effect of firm age on the correlation between perceived corruption and BPD. Using data collected from two sub-Saharan African countries—Ghana and Nigeria, the findings show that perceived corruption is positively correlated to BPD and this correlation is stronger among younger firms. Besides, the findings reveal that BPD is positively correlated to DoI. Moreover, the results of our analysis also indicate that BPD mediates the correlation between perceived corruption and DoI. The limitations of the study and the implications of its findings for researchers and practitioners are discussed.
Technical Report
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This paper systematically takes stock of the latest academic and policy literature that sheds light on Information and Communication Technology (ICT) tools and their impact on corruption. The tools reviewed include digital public services, crowdsourcing platforms, whistleblowing tools, transparency portals, big data, distributed ledger technology (DLT), and artificial intelligence (AI). We scrutinise the evidence on various technologies’ effectiveness, drawbacks, and even potential misuse that enables corruption. Drawing on the commonalities across the different technologies, it appears that ICT can genuinely support anti-corruption by impacting on public scrutiny in numerous ways. For example, by digitising public services and enabling corruption reporting, it can promote transparency and accountability, and facilitate advocacy and citizen participation as well as closer interaction between government and citizens. However, ICT can also provide new corruption opportunities related to the dark web, cryptocurrencies, or simply through the misuse of well-intended technologies such as digital public services and centralised databases. Our findings underline that ICT is not per se a panacea against corruption, and it can also play into the hands of corrupt officials. Importantly, the existence of ICT tools does not automatically translate into anti-corruption outcomes. Rather, impact hinges on the suitability of ICT for local contexts and needs, cultural backgrounds, local support and skills in using technology.
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Using secondary data of internationalized Spanish hotel chains, this research attempts to examine the role of formal and informal institutional differences between home and host country from the foreign location choice point of view. Generally speaking, the results show that (a) the higher the formal institutional differences the lower the attractiveness of the foreign location, (b) the negative effect of linguistic differences, as an informal institutional dimension, significantly affects the choice of location, and (c) the moderating role of linguistic differences between formal institutional factors with regards to the choice of location is contrary to our expectations. Based on the findings, this work wishes to offer not just a better understanding of the location choice decisions within the service industry but also to identify both the joint effect of formal and informal institutional factors as well as to distill their individual effects. This is of relevance since there seem to be no conclusive empirical evidence of such effects so far in the literature.
The impact of freedom of digital media in host countries has been under-researched in the literature of the internationalization decisions of emerging multinational enterprises (EMNEs). Through integrating the stakeholder perspective with transaction cost economics, we examine the role of host-country digital media in influencing the foreign direct investment (FDI) entry mode choice of EMNEs and its boundary conditions associated with internal and external corruption-controlling efforts. Using a panel dataset of Chinese listed manufacturing firms’ outward FDI between 2010 and 2016, our empirical analyses indicate that freedom of digital media in a host country has positive impact on an EMNE’s wholly owned subsidiary choice as FDI entry mode. This main relationship is strengthened by EMNE transparent information disclosure and external control of corruption in the host country.
A key strategic decision in international business (IB) is where to locate. While there is general agreement that institutions influence location decisions, less is known about the specific levels and mechanisms of institutional influence. To address these gaps, we systematically review and synthesize 106 articles published in 19 general management and IB journals from 1998 to 2019. We examine institutions at different levels (e.g. regional, national or subnational). We also examine the characteristics and experiences of multinational corporations, as well as the industry conditions that determine the boundaries of institutional influence. Key findings from descriptive and thematic analyses reveal both theoretical tensions and empirical gaps. From our organizing framework, we identify four research avenues that can unify future research.
Relying on data from the Spanish hotel industry, this paper analyzes the role of informal institutional factors (IIF) in location choice. Earlier studies mostly use an aggregate level of cultural differences as informal institutional factors. We, however, go deeper into this concept and study the impact of two distinct but interrelated informal institutional factors, religion and language, on the location decisions of hotel chains. We resolve the overlapping problem between these two highly correlated IIF by means of a ‘layer’ measurement in Confirmatory Factor Analysis. Our results show that the higher the informal institutional differences (IID), the lower the presence of the hotels in the foreign country. While physical distance plays a key moderating role, formal institutional differences (FID) did not show any effect. We contribute by unravelling the role of language and religion in location choice in the internationalization process of service firms. Moreover, we test the moderating role of formal institutions in these decisions, thus combining the impact of formal and informal institutions on location choices in service firms.
We systematically reviewed the literature on corruption in international business (137 articles) for the last 17 years between 1992 and 2019. Additionally, we identified seven research streams in this growing literature: (1) the legislation against corruption, (2) the determinants of corruption, (3) combating corruption, 4) the effect of corruption on firms, (5) the political environment and corruption, (6) corruption as a challenge to existing theories of management, and (7) the effect of corruption on foreign direct investment and trade. Based on this review, we recommend that strong international laws are needed to minimize the negative impact of corruption on international business. Firms must also consider corruption when formulating strategies to increase operational efficiency and performance. Finally, corruption challenges some key assumptions of existing theories of management. Scholars need to test and expand these existing theories by considering corruption as an important issue in international business.
This study is among the first attempts to understand hotel location choice by developing a local spatial model to investigate spatial determinants of hotel locations in an urban tourism destination, taking Hong Kong as the study context. The spatially diverse relationships between nine factors (i.e., land area, green land, traffic land, residential land, commercial land, institutional land, metro station density, attraction density, population density, and average income) and the number of hotels in Hong Kong are quantified by geographically weighted Poisson regression. Results indicate that (1) factors influencing hotel location choice vary across regions; (2) traffic factors do not always affect hotel location choice in urban destinations; and (3) the effects of independent variables in peripheral regions are strong and decrease gradually in the urban center, revealing a ‘poached egg’ pattern, where hotel clustering is associated with agglomeration effects.
We model the relationship between bilateral foreign direct investment (FDI) and the level of corruption in multinational firms’ (MCNs’) home and host countries. We construct and test a model of bilateral FDI between countries that differ in their levels of corruption. FDI is affected negatively both by the level of corruption in the host country and by differences in home- and host-country corruption. Our model emphasizes that MNCs develop skills for dealing with home-country corruption, and these skills become a competitive advantage in similarly corrupt host countries. We test the model using data on bilateral FDI stocks among a large number of home and host countries, using a variety of specifications and estimation strategies to provide robustness. Our results show that the effects of host-country corruption and of differences in corruption levels between home and host countries are statistically and economically significant.