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Are Foreign Firms Privileged By Their Host Governments? Evidence From The 2000 World Business Environment Survey

  • Huang, Yasheng
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    Using the data from World Business Environment Survey (WBES) on over 10,000 firms across eighty one countries, this paper finds preliminary evidence that foreign firms enjoy significant regulatory advantages - as perceived by the firms themselves - over domestic firms. The findings on regulatory advantages of foreign firms hold with a variety of alternative measures of regulations and with or without firm- and country-level attributes and industry and country controls. There is also evidence that foreign firms' regulatory advantages are especially substantial vis-a-vis the politically weak domestic firms. Furthermore, the regulatory advantages of foreign firms appear stronger in corrupt countries than in non-corrupt countries.

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    Paper provided by Massachusetts Institute of Technology (MIT), Sloan School of Management in its series Working papers with number 4538-04.

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    Date of creation: 03 Jun 2005
    Date of revision:
    Handle: RePEc:mit:sloanp:18075
    Phone: 617-253-2659
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    9. Claessens, Stijn & Djankov, Simeon & Lang, Larry H. P., 2000. "The separation of ownership and control in East Asian Corporations," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 81-112.
    10. Brunnetti, Aymo & Kisunko, Gregory & Weder, Beatrice, 1997. "Credibility of rules and economic growth : evidence from a worldwide survey of the private sector," Policy Research Working Paper Series 1760, The World Bank.
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    12. Raymond Fisman, 2001. "Estimating the Value of Political Connections," American Economic Review, American Economic Association, vol. 91(4), pages 1095-1102, September.
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