Foreignness, legitimacy, and corporate citizenship perceptions in emerging markets

Academic and practitioner interest in MNC citizenship in emerging markets suggests that examining firm foreignness effects on corporate citizenship perceptions in such a setting could have both theoretical and practical significance. Stated another way, to what extent do foreign firms in emerging countries face a liability with respect to perceptions regarding their citizenship, or alternatively, are they perceived more favorably than their domestic counterparts? Existing theory regarding firm foreignness generally takes developed world perspectives, which may not apply to developing countries. Different country conditions in these markets suggest that the factors impacting assessments of citizenship may vary from those in developed country settings. In examining the relationship between foreignness and citizenship perceptions, we focus on legitimacy aspects associated with foreign headquarters and country-of-origin. To better understand this question, we examine corporate citizenship perceptions of foreign and domestic firms in five Latin American countries: Argentina, Brazil, Chile, Mexico, and Peru. In a multi-level analysis, we find that foreign-headquartered companies are assessed lower in corporate citizenship, and that this occurs across different foreign headquarters locations, with foreign-headquartered firms from Spain having the greatest liability.