Picture of boy being examining by doctor at a tuberculosis sanatorium

Understanding our future through Open Access research about our past...

Strathprints makes available scholarly Open Access content by researchers in the Centre for the Social History of Health & Healthcare (CSHHH), based within the School of Humanities, and considered Scotland's leading centre for the history of health and medicine.

Research at CSHHH explores the modern world since 1800 in locations as diverse as the UK, Asia, Africa, North America, and Europe. Areas of specialism include contraception and sexuality; family health and medical services; occupational health and medicine; disability; the history of psychiatry; conflict and warfare; and, drugs, pharmaceuticals and intoxicants.

Explore the Open Access research of the Centre for the Social History of Health and Healthcare. Or explore all of Strathclyde's Open Access research...

Image: Heart of England NHS Foundation Trust. Wellcome Collection - CC-BY.

The law, corruption and reinvestment decisions : the transitional periphery in comparative context

Demirbag, Mehmet and McGuinness, Martina and Wood, Geoffrey and Bayyurt, Nizamettin (2015) The law, corruption and reinvestment decisions : the transitional periphery in comparative context. International Business Review. ISSN 0969-5931 (In Press)

PDF (Demirbag-etal-IBR-2015-The-law-corruption-and-reinvestment-decisions-the-transitional-periphery-in-comparative)
Accepted Author Manuscript
License: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 logo

Download (872kB) | Preview


A range of studies has found that corruption has a significant impact upon FDI decisions, however to date there has been scant investigation into longer term investments made by firms and their relative proclivity to reinvest. Further, there is particularly little work on reinvestment choices made on the transitional periphery of post-state socialist countries and how these might differ from the more stable transitional economies of central and Eastern Europe. Utilising 2005 World Bank Enterprise Survey data, this study explores the relationship between corruption and MNEs’ strategic decision to reinvest profits. From an institutionalist starting point, we find variation in the impact of different dimensions of corruption upon reinvestment; pervasive corruption impacts negatively upon reinvestment, but its effects are more pronounced in the transitional periphery. Perceived robust legal institutions have a positive correlation with reinvestment, but again, the negative effects are most pronounced on the transitional peripheral state socialist states. We ascribe this disparity to greater institutional fluidity, and explore why this context has particularly adverse effects. Finally, we find that firm level attributes of larger size and greater age play an important role in positive reinvestment decisions, appearing to mitigate the worst consequences of this fluidity.