| A noteworthy disconnect may exist between how researchers conceptualize and measure host country institutional variables and how executives of multinational enterprises (MNEs) evaluate host countries when making international investment decisions. Oftentimes, researchers view country institutional risk from a narrow lens, considering how one institutional variable (e.g., culture, political risk, corruption) impacts internationalization decisions. However, evaluation of institutional variables in isolation does not accurately mirror executives' perceptions of risk within the worldwide marketplace, which in turn drive investment decisions. Further, although the often researched institutional factor -- government-based corruption -- plays a role in determining MNEs' investment decisions, equivocal results provide evidence that the overall complexity of the relationships is not fully understood. Specifically, safety-related factors, termed herein "safety risk," may be a wider by-product of corruption and a major deterrent of international investment. Thus, reevaluating which institutional risk factors we consider, how they impact one another, and how they relate to investment are important pursuits. |
