Gaining legitimacy through hiring local workforce at a premium: The case of MNEs in the United Arab Emirates (original) (raw)

This study examines the process and outcomes of cultivating external legitimacy through the employment of host country nationals by multinational enterprises’ (MNEs) affiliates in the United Arab Emirates, building on the literatures of both institutional theory and legitimacy. Analysis of data obtained from 48 managers of MNE’s affiliates located in the UAE shows that in sectors where the employment of host country nationals is almost taken for granted, MNEs are driven by a sense of appropriateness and social legitimacy. In contrast, in sectors where the employment level of UAE nationals is low, those MNEs engaging in localization are driven by the logic of economic efficiency and tend to employ locals in order to extract rent from the government. The authors discuss the results and their managerial and policy implications.