Studies of corruption and its relationship with Foreign Direct Investment (FDI) have yielded mixed results; some have found that corruption deters FDI but others have found the opposite. This paper replicates earlier studies within the OLI paradigm, but also seeks to advance our understanding of this relationship by introducing the concept of "corruption distance" between pairs of countries and applying it to the special context of Latin America. After controlling for institutional variables, results show that corruption distance has an asymmetrical impact. Host countries enjoying "positive" corruption distance compared with home countries as sources of FDI experience no significant increases or reductions in levels of inward FDI. However, "negative" corruption distance suffered by host countries is associated with significantly lower levels of inward FDI. We argue that firms from a home country with relatively low levels of corruption are unfamiliar with the formal and informal institutions associated with corruption. Conversely, firms from home countries with high corruption are undeterred by high corruption in host countries.

This study furthers our understanding of how corruption affects the decision-making process of allocating foreign direct investment (FDI). Drawing on the responses of 28 managers in charge of establishing operations in a highly corrupt host country, we argue that those firms based in home countries with low levels of corruption are more proactive in preparing to face corruption abroad than those based in countries with high corruption levels. This means that firms from less corrupt home countries have strategies in place to deal with high corruption abroad. This finding is based on the fact that these firms have stronger pressures to not engage in corruption from their home stakeholders. Also, these firms might not have the experience of dealing with corruption at home, which hinders their potential to deal with corruption abroad. On the other hand, those firms based in highly corrupt home countries do not have clear strategies to deal with corruption abroad. This assertion is based on the fact that these firms might have familiarity in dealing with corruption and thus, might not see it as an obstacle to operating abroad.

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This study researches how the arbitrariness and pervasiveness of corruption affect the decision-making process and subsequent operations of firms investing in highly corrupt host locations. The results of the analysis demonstrate that firms headquartered in countries where corruption is high have an advantage when operating in a foreign country with a similar institutional environment. The reason for this advantage is that these firms possess knowledge of how to cope with the arbitrary and pervasive dimensions of corruption. Firms from countries with lower corruption levels than the host country, however, are more affected by corruption in a highly corrupt host country. Finally, though this study finds evidence that all firms operating in a highly corrupt country might participate in corrupt deals, those headquartered in highly corrupt countries are more likely to be willing to do so. This claim is based on 12 in-depth interviews with managers with FDI allocation responsibilities of firms operating in a highly corrupt host country. The results show that firms from less corrupt countries face stronger pressures from their headquarters to not engage in corrupt deals, whereas firms from more corrupt countries do not encounter such pressures.

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According to the Bank of Mexico, tourism is one of the most important economical activities due to its capability of promoting a wide range of activities of other kinds as well as facilitating the creation of new ones. All this can be presented thanks to the 20.6 million international tourists and its 8 382.23 million dollars received during the last year. In this context, Quintana Roo received 45% of the total amount of tourists that enter into the country; besides, the state concentrates 12% of global hotel infrastructure in Mexico with 57 906 rooms. However, the obtained benefits are concentrated only in five destinations of the state: Cancun, Cozumel, Playa del Carmen, Mahahual and Tulum.The rural communities, therefore, are building their own enterprises and participating in the tourism activity in order to offer themselves the opportunity to improve their quality of life, by preserving the environment, getting incomes, and providing jobs for the local people. These actions represent an example of local development looking forward to sustainable tourism.Holbox, a small rural town from Quintana Roo -Mexico, is a good example of this. Tourism has become the most important economical activity in this place while the natural and cultural resources are preserved. The inhabitants always look to improving the tourist activities such as the fishery, but controlling the number of visitors and appealing to a specific kind of consumer.Through tourism in Holbox, the residents have had the opportunity to build enterprises in order to offer services to the tourists such as restaurants, small hotels and recreational attractions like The Kite Surf, Tours, and Swims with Whale Sharks. Although several natural resources of the community are the principal attraction for tourists, they appeal to a specific kind of consumer. That is why Holbox in Quintana Roo (three hours from Cancun by car), with a natural scene and kind people, is planning and organizing its economical activity through local development in order to participate in a global market.

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