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The Influence of Multinational Corporations on Institutional Diffusion in Emerging Markets: Evidence from Hiring the Disabled in Korea

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Institutional theory has largely ignored the institutional diffusionacross borders although it is a common phenomenon in thisinterconnected world. We examined the influence of the MNC oninstitutional diffusion in emerging markets. In a research setting ofhiring the disabled in Korea, hypotheses were tested with a sample of948 firms including 101 MNC subsidiaries. Results support thepropositions that MNC subsidiaries from major advanced economieshire more disabled workers, and this tendency is diffused to subsidiariesfrom other countries in Korea. However, we failed to find the evidencethat MNC subsidiaries exert isomorphic pressures to local players.

Abstract

Institutional theory has largely ignored the institutional diffusionacross borders although it is a common phenomenon in thisinterconnected world. We examined the influence of the MNC oninstitutional diffusion in emerging markets. In a research setting ofhiring the disabled in Korea, hypotheses were tested with a sample of948 firms including 101 MNC subsidiaries. Results support thepropositions that MNC subsidiaries from major advanced economieshire more disabled workers, and this tendency is diffused to subsidiariesfrom other countries in Korea. However, we failed to find the evidencethat MNC subsidiaries exert isomorphic pressures to local players.

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