Corruption Distance, Anti-corruption Laws and International Ownership Strategies in Russia

Using a unique dataset of 1341 firms with foreign ownership registered in Russia, this paper examines how foreign ownership strategies in Russia are influenced by the corruption distance between the home country and Russia. It also examines how anti-corruption regulation in the home country affects the modal choice. Based on transaction cost and resource-based theories, the modal choice is viewed as a trade-off between the benefits and costs of having a local partner. In the case of Russia, the benefits were found to exceed the costs, as corruption distance and anti-corruption legislation in force in the home country are positively related to shared ownership.