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Reputation as a Mechanism Alleviating Opportunistic Host Government Behavior against MNEs

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  • Veugelers, Reinhilde

Abstract

The strategic options available to multinational enterprises and host governments, when the first contemplate investment in the latter's country, are marked by the possibility that no entry eventually will take place as a response to opportunistic behavior on the part of th e host government. This article examines under which circumstances and how, in a dynamic world with asymmetric information, reputation building by the host government can credibly alleviate this opportunistic behavior, leaving a safer climate for multinational enterprises investment. Copyright 1993 by Blackwell Publishing Ltd.

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  • Veugelers, Reinhilde, 1993. "Reputation as a Mechanism Alleviating Opportunistic Host Government Behavior against MNEs," Journal of Industrial Economics, Wiley Blackwell, vol. 41(1), pages 1-17, March.
  • Handle: RePEc:bla:jindec:v:41:y:1993:i:1:p:1-17
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    Cited by:

    1. Jacques Bughin & Stefano Vannini, 2003. "Unions and the Welfare Impact of Foreign Direct Investment — A Wisdom Extension," LABOUR, CEIS, vol. 17(2), pages 285-298, June.
    2. Mo, Pak Hung, 2011. "International Human Trafficking: Theory and Solution," MPRA Paper 35104, University Library of Munich, Germany, revised Nov 2011.
    3. Choi, Yongjae & Esfahani, Hadi Salehi, 1998. "Direct foreign investment and expropriation incentives: A mitigating role for match-specific capital," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(1), pages 47-59.
    4. Duncan, Roderick, 2006. "Price or politics? An investigation of the causes of expropriation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(1), pages 1-17, March.
    5. Giorgio Matteucci & Pierfrancesco Reverberi, 2011. "Parallel trade and its impact on incentives to invest in product quality," DIS Technical Reports 2011-05, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    6. Roderick Duncan, 2006. "Price or politics? An investigation of the causes of expropriation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(1), pages 85-101, March.
    7. Richard Mash, 2000. "Host Country-Foreign Investor Bargaining Power and Investment Incentive Provisions in Multilateral Investment Agreements," Economics Series Working Papers 47, University of Oxford, Department of Economics.
    8. David K. Levine, 2021. "The Reputation Trap," Econometrica, Econometric Society, vol. 89(6), pages 2659-2678, November.

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