We ask whether MNEs’ experience of institutional quality and political
risk within their “home” business environments influences their
decisions to enter a given country. We set out an explicit theoretical
model that allows for the possibility that firms from South source
countries may, by virtue of their experience with poor institutional
quality, derive a competitive advantage over firms from North
countries with respect to investing in destinations in the South. We
show that the experience gained by such MNEs of poorer institutional
environments may result in their being more prepared to invest in other
countries with correspondingly weak institutions
