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Understanding the ‘Supply Side’ in International Business Bribery and Corruption Special issue call for papers from critical perspectives on international business *Submission Deadline*: 31 December 2017 *Guest Editors* Mo Yamin, Alliance Manchester Business School, The University of Manchester, UK Byung Il Park, College of Business, Hankuk University of Foreign Studies, South Korea Yong Kyu Lew, College of Business, Hankuk University of Foreign Studies, South Korea *Purpose and Research Questions* In the dominant international business (IB) narrative on corruption, the tacit and rarely challenged assumption is that governments, particularly those in developing countries and emerging economies, are the instigators of corruption to which multinational corporations (MNCs) may have to respond (Habib and Zurawicki, 2002; Rodriguez, Uhlenbruck and Eden, 2005; Uhlenbruck, Rodriguez, Doh and Eden, 2006; Brouthers, Yan and McNicol, 2008; Cuervo-Cazurra, 2006; 2008; Petrou and Thanos, 2014). Thus, corruption is treated as exogenous to the MNC and as a feature of the host country environment, confronting the MNC’s decision makers with a mixture of risks and/or opportunities. The focus is wholly on the impact of host country corruption on the MNC (e.g., whether it reduces overall foreign direct investment (FDI) commitments in the corrupt countries and how it may affect the modalities of operations). The only dimension of corruption examined is almost invariably bribes or kickbacks demanded by of public officials and bureaucrats, who may provide ‘greasing’ services smoothing the path of market entry. The orthodox treatment of corruption in the IB literature has in recent years been subject to extensive critical scrutiny by contributions to critical perspectives on international business, Critical Perspectives on Accounting, Review of International Political Economy and other outlets. Not surprisingly, a key aspect of critical contributions has questioned the total neglect in the orthodox approach of the ‘supply side’ of bribery and corruption. While it is axiomatic that, as it were, ‘it takes two to tango’, orthodox treatments exclusively focus on the demand side – the bribe taker – and simply ignore the supply side residing in large corporations and multinationals as instigators, facilitators and beneficiaries of often large scale corruption (Murphy, 2011; Otusanya, 2011; Sikka and Willmott, 2010; 2013; Sikka and Lehman, 2015). Other critical contributions of a similar vein have focused more directly on the role of tax havens, offshore jurisdictions and ‘special purpose entities’ (OECD, 2001; UNCTAD, 2015; 2016) in channeling vast amounts of ‘ illicit’ financial outflows from less developed and emerging economies (Kar and Spanjers, 2015). Murphy (2017, 169) has argued that tax havens provide the ‘opportunity for corrupt funds to remain forever hidden’ while Christensen (2011, 178) has noted the use of tax havens for making illicit political donations, embezzlement, fraud, and payment of bribes adding that ‘it has become increasingly apparent that tax havens provide a supply side stimulus that encourages and enables grand scale corruption’. The above observations suggest that corruption is not merely occasional ‘ grease’ but may have become a well-funded ‘routine’ in IB dealings of MNCs. They also indicate that recipients/beneficiaries are powerful, well connected elites (Rocha, Brown and Cloke, 2011). Large scale bribes can hardly be (wholly) cash based and in any case need ‘skilful’ accounting services (Neu, Everett, Rahaman and Martinez, 2013) and often the secrecy and opacity that offshore finance provides. This suggestion gains credence by a number of case studies showing the use of shell companies and corrupt accounting practices (Neu et al., 2013; Sikka and Lehman, 2015) and by numerous press reports on corruption cases invariably indicating the deployment of a complex web of financial transactions (e.g., Global Witness, 2016a; 2016b). Furthermore, presumably, the bribe receiving elites in less developed and emerging economies prefer (or even demand) that bribes are delivered in ways that can be accessible in ‘desirable’ locations enabling e.g., the purchase of luxury residences in European and other advanced country cities (Sherman, 2017) and easier access to specialist banking facilities serving global wealthy elites (Beaverstock, Hall and Wainwright, 2013). By contrast, bribes to lowly and often poorly-paid local officials who may be in positions able to obstruct foreign market entry (e.g., by delaying administrative permits) can presumably be cash payments which are likely to be locally spent without needing to be routed via tax havens and offshore jurisdictions. Thus, arguably, the notion of bribery as ‘grease payments’ does not capture the changing nature of much corruption in terms of its scale and increasing dependence on ‘advanced’ financial services nor, importantly, bribes as a component of illicit outflows from less developed and emerging economies and hence the differential economic impact on host countries of the different categories of bribe recipients (low- middle level officials versus powerful elites) in less developed and emerging economies (Chang, 2007, 164). Against the above background, this special issue seeks conceptual/theoretical and empirical contributions that enhance our understanding of bribery and corruption in the contemporary context whereby globalization and financialization have together significantly transformed the structure and strategy of MNCs (Yamin and Ghauri, 2010; Morgan, 2014; Coe, Lai and Wojick, 2014). While corrupt money has always sought sanctuaries (such as numbered Swiss banking accounts), an urgent issue for critical IB is exploring further how the ascendency of finance in the governance of the MNC may have enhanced corruption ‘tolerance’ amongst top decision makers in MNCs and the global value chain that they effectively control. Arguably, an important element of the ‘ownership advantage’ of MNCs may now stem from innovative effort in perfecting MNCs’ financial architecture in which the tax havens, offshore jurisdictions and Global Cities are critical nodes (Coe et al., 2014) and function as mechanisms for hiding capital. Some progress in this direction has already occurred, notably via the concept of the global wealth chains (Seabrooke and Wigan, 2014; Sherman, 2017) but there is scope for further work. A related issue is the disconnect between the literature on MNC corruption and that on corporate social responsibility (CSR). An influential narrative on CSR acknowledges that with globalization the negative consequences of businesses have intensified and bemoans the regulatory ‘vacuum’ with respect to corruption along with other societal and environmental ills (Scherer and Palazzo, 2008). As Christensen (2011, 192) has noted, however, the use of tax havens ‘has scarcely registered on the CSR debate’. A promising perspective is one that sees CSR as a context within which there is (political) contestation between different legitimacy claims (Levy, 2008; Levy and Kaplan, 2008). In the present context, the emergence of non-governmental organizations (NGOs) with a mission of exposing and combating financial corruption, such as the Tax Justice Network, Global Wittiness and Global Financial Integrity, is a positive development both in terms of their own investigative efforts and also as partners for academic research collaboration on corruption. In these regards, this special issue seeks both theoretical and empirical papers (both qualitative and case study based and quantitative studies) that may address, but are not limited to, the following issues: • Exploring the link between MNC financialization and corruption in developed and less developed country contexts. • Investigating the link between tax evasion and CSR and irresponsibility with respect to MNC engendered corrupt practices. • Studying the differential drivers and impacts of ‘stay at home’ corruption and capital flight corruption. • Exploring the link between MNC corruption and illicit outflows from less developed countries. • Examining the link between the MNC’s secrecy infra-structure and large scale bribery in particular industry/sectors and/or countries. • Investigating the effectiveness of NGO’s exposure of MNC corruption on the latter’s corruption behavior. • Examining the drivers of ‘corruption tolerance’ – indicated by MNC top managers’ willingness to pursues corrupt practices despite the anticipation of exposure and consequent penalties. • Studying the link between corruption propensity and the home country institutions (varieties of capitalism and MNC corruption propensities). Submission Process and Deadlines Submission Instructions The deadline for submissions is 31st December, 2017. For more information on critical perspectives on international business, including style guidelines, please visit the journal’s website at: http://www.emeraldinsight.com/loi/cpoib. All submissions will be subject to the regular blind peer review process of critical perspectives on international business. Guest editors are seeking reviewers for this issue - please contact the guest editors to either volunteer or nominate a reviewer. References Beaverstock, J. V., Hall, S. and Wainwright, T. (2013), “Servicing the super-rich: New financial elites and the rise of the private wealth management retail ecology”, Regional Studies, Vol. 47 No. 6, pp. 834-849. Brouthers, L. E., Yan, G. and McNicol J. P. (2008), “Corruption and market attractiveness influences on different types of FDI”, Strategic Management Journal, Vol. 29 No. 6, pp. 673-680. Chang, H.-J. (2007), The bad Samaritans: The guilty secrets of rich nations and the threat to global prosperity, RH Business Books, London. Christensen, J. (2011), “The looting continues: Tax havens and corruption”, critical perspectives on international business, Vol. 7 No. 2, pp. 177-196. Coe, N., Lai, K. and Wojick, D. (2014), “Integrating finance into global production networks”, Regional Studies. Vol. 48 No. 5, pp. 761-777. Cuervo-Cazurra, A. (2006), “Who cares about corruption?”, Journal of International Business Studies, Vol. 37 No.6, pp. 807-822. Cuervo-Cazurra, A. (2008), “The effectiveness of laws against bribery abroad ”, Journal of International Business Studies, Vol. 39 No. 4, pp. 634-651. Global Witness. (2016a), London’s Alternative Investment Market shown up by Liberian government bribery indictments, Available at: https://www.globalwitness.org/en/pressreleases/londons-alternative-investment-market-shown-liberian-government-bribery-indictments/ [accessed on 18 April 2017]. Global Witness. (2016b), Bribery arrest over multi-billion dollar mining rights and the UK's tax havens, Available at: https://www.globalwitness.org/en/blog/bribery-arrest-over-multi-billion dollar-mining-rights-and-uks-tax-havens/ [accessed on 19 April 2017]. Habib, M. and Zurawicki, L. (2002), “Corruption and foreign direct investment”, Journal of International Business Studies, Vol. 33 No. 2, pp. 291-293. Kar, D. and Spanjers, J. (2015), Illicit financial flows from developing countries:2004-2013, Global Financial Integrity, Available at: http://www.gfintegrity.org/report/illicit-financial-flows-fromdeveloping-countries-2004-2013/. [accessed on 18 April, 2017]. Levy, D. (2008), “Political contestation in global production networks”, Academy of Management Review, Vol. 33 No. 4, pp. 943-963. Levy D. and Kaplan, R. (2008), “Corporate social responsibility and theories of global governance: Strategic contestation in globl issue arena”, in Crane A., Matten, D., McWilliams, A., Moon, J. and Siegel, D. S. (eds.) The oxford handbook on corporate social responsibility, Oxford University Press, Oxford, pp. 432-451. Morgan, G. (2014), “Financialization and the multinational corporation”, Transfer, Vol. 20, No 2, pp. 183–197. Murphy, J. (2011), “Capitalism and transparency”, critical perspectives on international business, Vol. 7 No. 2, pp. 125-141. Murphy, R. (2017), Dirty secrets: How tax havens destroy the economy, Verso, London. Neu, D., Everett, J., Rahaman, A. and Martinez, D. (2013), “Accounting and networks of corruption”, Accounting Organization and Society, Vol. 38 No. 6, pp. 505-524. OECD. (2001), Behind the corporate veil: Using corporate entities for illicit purposes, OECD, Paris. Otusanya, O. (2011), “The role of multinational companies in tax evasion and tax avoidance: The case of Nigeria”, critical perspectives on accounting, Vol. 22, pp. 316-332. Petrou, A. P. and Thanos, I. C. (2014), “The “grabbing hand” or the “helping hand” view of corruption: Evidence from bank foreign market entries”, Journal of World Business, Vol. 49 No. 3, pp. 444-454. Rocha, J. L., Brown, E. and Cloke, J. (2011), “Of legitimate and illegitimate corruption: Bankruptcies in Nicaragua”, critical perspectives on international business, Vol. 7 No. 2, pp. 159-176. Rodriguez, P., Uhlenbruck, K. and Eden, L. (2005), “Government corruption and the entry strategies of multinationals”, Academy of Management Review, Vol. 30 No. 2, pp. 383-396. Scherer, A. and Palazzo, G. (2008), “Globalization and corporate social responsibility”, in Crane, A., Matten, D., McWilliams, A., Moon, J. and Siegel, D. S. (eds.) The oxford handbook on corporate social responsibility, Oxford University Press, Oxford, pp. 413-431. Seabrook, L. and Wigan, D. (2014), “Global wealth chains in the international political economy”, Review of International Political Economy, Vol. 21 No. 1, pp. 257-263. Sherman, J. (2017), “Illicit global wealth chains after the financial crisis: micro-states and an unusual suspect”, Review of International Political Economy, Vol. 24 No. 1, pp. 30-55. Sikka, P. and Willmott, H. (2010), “The dark side of transfer pricing – its role in tax avoidance and wealth retentiveness”, critical perspectives on accounting, Vol. 21, pp. 342-356. Sikka, P. and Willmott, H. (2013), “The tax avoidance industry: Accounting firms on the make”, critical perspectives on international business, Vol. 9 No. 4, pp. 415-443. Sikka, P. and Lehman, G. (2015), “The supply-side of corruption and limits to preventing corruption within government procurement and constructing ethical subjects”, critical perspectives on accounting, Vol. 28, pp. 62-70. Uhlenbruck, K., Rodriguez, P., Doh, J. and Eden, L. (2006), “The impact of corruption on entry strategy: Evidence from telecommunication projects in emerging economies”, Organization Science, Vol. 17 No. 3, pp. 402-414. UNCTAD. (2015), World investment report: Reforming international investment governance, United Nations, Geneva. UNCTAD. (2016), World investment report: Investor nationality-Policy Challengers, United Nations, Geneva. Yamin, M. and Ghauri, P. (2010), “A critical assessment of the business network perspective on HQ control in multinational companies”, in Andersson, U. and Holm, U. (eds.) Managing the contemporary multinational corporation, Edward Elgar, Cheltenham, pp. 125-137. *Mo Yamin *is a Professor of International Business at the Alliance Manchester Business School, the University of Manchester, UK. He received his PhD in Economics from the University of Manchester. His research focus is on multinational enterprises. His contributions include: a reassessment of Hymer’s influence on multinational enterprise theory; subsidiary knowledge creation and transfer in multinationals; reliance on online media in their internationalization process; and the impact of R&D cooperation strategies by foreign subsidiaries multinationals on economic development. His research has been published in journals including Journal of International Business Studies, International Business Review, Journal of World Business, Long Range Planning, Management International Review, and Asian Business & Management, among others. He has recently handled special issues on the topic of ‘rising powers’ for critical perspectives on international business and International Business Review. *Byung Il Park *is currently a Professor in International Business at the College of Business, Hankuk University of Foreign Studies in South Korea. His research currently focuses on MNC strategy, and corporate social responsibility of MNCs and MNC corruptions. He has published in such journals as the Journal of World Business, Management International Review, International Business Review, Journal of International Management, International Marketing Review, Corporate Governance: an International Review and Asia Pacific Journal of Management. In addition, he is Editor-in-Chief of ‘International Journal of Multinational Corporation Strategy’ and has also handled special issues for International Marketing Review, Thunderbird International Business Review, Multinational Business Review, Canadian Journal of Administrative Sciences, and European Journal of International Management. *Yong Kyu Lew *is an Associate Professor of International Business at Hankuk University of Foreign Studies, Seoul, South Korea. He completed his PhD at Manchester Business School of the University of Manchester, UK. Previously he held faculty positions at the University of Hull and the University of Manchester in the UK. His research interests include alliances, institutions and innovations, and economic and social consequences of FDI. His recent work has appeared in Journal of International Business Studies, Long Range Planning, Global Strategy Journal, International Business Review, critical perspectives on international business, International Marketing Review, R&D Management, and Industry and Innovation, among others. He sits on the editorial boards of Multinational Business Review and International Journal of Multinational Corporation Strategy. He is handling a special issue for International Studies of Management & Organization. -- Dr. Byung Il Park Professor of International Business Hankuk University of Foreign Studies College of Business Tel: +82-2-2173-3193 Mobile: +82-10-4157-3532 Personal Homepage: http://hufs.ac.kr/user/leedspark/index.action Editor in Chief: International Journal of Multinational Corporation Strategy ____ AIB-L is brought to you by the Academy of International Business. For information: http://aib.msu.edu/community/aib-l.asp To post message: [log in to unmask] For assistance: [log in to unmask] AIB-L is a moderated list.