Digitalization level, corruptive practices, and location choice in the hotel industry

Abstract

Based on institutional and agency theories, this paper examines the role of host corruptive practices on country choice for the hotel industry, as well as the power of digitalization as an anti-corruption tool. Digitalization level can boost transparency and can help monitor corruptive practices and other unethical behaviours. Relying on data from the Spanish hotel industry, the results confirm that the existence of corruptive or weak institutions has a significant impact on country choice, while a high digitalization level reduces the possibility of corruptive practices. We contribute by analysing the precise effect of host corruptive practices on country choice and the powerful effect of digitalization level as an anti-corruption instrument. This study is particularly interesting for the hotel industry, as a service sector, where multinationals need to carry out most of activities in the host country and maintain close interactions with foreign agents.