Financial giants and moral pygmies? Multinational corporations and human rights in emerging markets

Purpose - How should a multinational corporation (MNC) from a mature democracy deal with the human rights issues in a country with a poor human rights standard? The paper aims to discuss these issues. Design/methodology/approach - The authors develop a mathematical model to depict MNC's behavior in response to human rights violations in the host country. Findings - The authors show that, first, in a country with a high level of human rights abuses, a firm will have to lower its human rights standards to survive; but, second, a collective effort by all firms is essential to improve the human rights conditions in the host environment; and third, a firm's human rights practices may have a multiplicative effect that can significantly affect the momentum of human rights development in a host country. Originality/value - This study is one of the first attempts to provide a theoretical framework on the issue of MNCs and human rights in host countries.