The project explores the emergent phenomenon that states adopt assertive judicial interventions and transnational law enforcement to export and globalize domestic standards and practices. Meanwhile, this puts globalized firms between a rock and hard place when it comes to surviving and competing in developing countries with weak judicial institutions. I argue that firms under transnational anti-corruption compliance pressures may be forced to abandon their corrupt corporate practices in underdeveloped markets, which results in: (1) a loss of institutional protections and privileges, and (2) higher operational obstacles in navigating the unpredictable and even predatory regulatory and legal environment. Therefore, globally-exposed firms confronting such an institutional dilemma will need to make difficult tradeoffs in minimizing legal exposures: they may choose to either (1) decouple from more developed jurisdictions in order to mitigate external noncompliance risks, or (2) decouple from under-developed jurisdictions where they are unable to pursue profitable yet exclusive business opportunities due to stringent transnational anti-corruption obligations.
The project highlights the unique value of domestic judiciaries in the regulation and adjudication of multinational corporations’ cross-border activities. There is a lack of studies on the extraterritorial impact of domestic judicial systems’ functioning and output, especially when heterogeneous national judiciaries produce conflicting expectations to shape the behavior of globalized firms. This book shows that, by setting the legal standards of (mis)conduct for MNCs that play influential roles in global economy, domestic judicial proceedings may advance sovereign states’ own national interests and objectives. In this sense, national judiciaries extend a state’s regulatory toolkit to conduct foreign policy and economic statecraft.