Substituting Expats with Locals: Indigenization Policies of Saudi Arabia and TNCs

Abdullah, Alanezi, Tamer, Darwish ORCID: 0000-0003-1815-9338, Satwinder, Singh and Anne, Miroux (2020) Substituting Expats with Locals: Indigenization Policies of Saudi Arabia and TNCs. Transnational Corporations, 27 (1). pp. 63-86.

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Owing to rising unemployment among Saudi nationals, the Kingdom of Saudi Arabia (KSA) has proclaimed Saudization, a localization policy that strives to replace expats with locals. A major gap in the literature is the lack of empirical investigation regarding the relationships between indigenization and the underlying principles of its process. This study fulfils this gap. In this empirical study of the success or otherwise of this initiative, we uncover several interesting features. We find that TNCs that perceive the external pressures for localisation and those that wish to enhance their social legitimacy are more likely to comply with the Saudization. Further, TNCs do not believe that the process of localisation would provide them with economic gains. Legal coercion to adhere to Saudization initiative turns out to be a highly significant instrument in making TNCs adhere to localisation process. Age or size of the firm has no impact on the Saudization program. We draw out the implications for theory and practice.

Item Type: Article
Article Type: Article
Uncontrolled Keywords: Indigenization; Transnational corporations; Work force localisation; Hierarchical regressions; Kingdom of Saudi Arabia
Related URLs:
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HF Commerce > HF5001 Business
H Social Sciences > HF Commerce > HF5001 Business > HF5549 Personnel management. Employment management
H Social Sciences > HN Social history and conditions. Social problems. Social reform
K Law > K Law (General)
Divisions: Schools and Research Institutes > School of Business, Computing and Social Sciences
Research Priority Areas: Applied Business & Technology
Depositing User: Tamer Darwish
Date Deposited: 02 Apr 2020 11:55
Last Modified: 03 Aug 2023 09:23

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