Human capital in international markets: a complete guide to foreignness, CSR signals, and talent attraction

The human-capital tension in global markets

HR leaders face a constant challenge: how to attract and retain the most valuable human capital in increasingly competitive markets. The Great Resignation and growing awareness of toxic culture — as documented by Sull et al. (2022), cited by Kruse, Pyun and Raswant — made clear that compensation alone is no longer decisive. Corporate reputation, CSR commitment, and diversity & inclusion policies have become signals candidates weigh as seriously as the benefits package.

What happens when your company operates in an international market, or when you hire talent from different cultural contexts? How do candidates perceive a foreign firm versus a local one? And how do diversity initiatives shape that perception?

A recent study by Nils Kruse, Lynn Pyun and Arpit Raswant (2026) in the Asia Pacific Journal of Management, titled Human Capital and International Markets, digs into these questions. It examines the interplay between foreignness and potential advantage in the host country through a diversity lens on human-capital acquisition. The findings offer a useful frame for any HR leader building high-performing teams in a globalized environment — including Chile and Latin America.

From liability of foreignness to the outsider’s advantage

Multinationals entering foreign markets have traditionally faced the liability of foreignness: extra costs from unfamiliarity with the local market, missing networks, geographic distance, and cultural, economic, legal, and political differences. Firms usually respond in two ways:

1. Leverage firm-specific advantages: scale, superior technology, brand, or advanced organizational practices.
2. Local isomorphism: integrate with local culture to gain legitimacy and reduce the “outsider” perception.

Kruse, Pyun and Raswant explore a less-studied line: foreignness is not always a disadvantage. In some contexts, being a foreign firm can confer an outsider’s advantage — when multinationals are seen as superior to local firms, or when their country of origin is perceived as a higher economic standard.

One powerful way to capitalize on that advantage is to exploit social gaps in the host market. The study, set in South Korea — a country with high labor-market discrimination against women — suggests multinationals can attract underused talent by refusing local discriminatory practices. By not conforming to prevailing norms, they access a qualified pool that local firms leave on the table.

Without diversity signals, the experiment found foreign firms were perceived as more attractive than local ones. That initial advantage is real — but not fixed.

How CSR and diversity signaling works

In a labor market with information asymmetry, signals matter. Signaling theory (Spence) explains how firms communicate values and practices to attract the right candidates. CSR policies — especially gender-diversity initiatives — act as powerful signals of employer attractiveness.

Kruse, Pyun and Raswant confirm that adopting CSR policies positively affects organizational attractiveness. Candidates use these signals to infer anticipated pride, prestige, value fit, and expected treatment. For multinationals, CSR can mitigate the liability of foreignness by building legitimacy in the host country.

Gender-diversity signals have a generally positive effect on employer attractiveness — especially for minority or disadvantaged groups, such as women in the Korean market studied.

For CHROs, implementation is not enough: signals must be communicated coherently. Visible CSR can be a differentiator in the war for talent.

Key experimental findings

The experimental design isolated two variables: company origin (local vs. foreign) and presence of gender-diversity signals in CSR communication. Main results:

A relevant theoretical takeaway: researchers warn against blanket claims about foreign firms’ advantages or disadvantages. Overall, the effect of diversity signals on attractiveness was stronger than country of origin, so a diversity signal can make national origin less relevant.

How foreignness and diversity signals interact

The interaction is nuanced. How strongly a multinational’s signals land depends on parent-company reputation and country-of-origin perceptions. Firms from countries seen as more advanced already start with a reputational edge; for them, the marginal return of diversity signals can be relatively low.

By contrast, local firms — or those from countries with a less favorable national reputation — have a significant opportunity. The study found the positive effect of diversity signaling is stronger for local firms than for foreign multinationals. They can use diversity to offset negative national images or entrenched cultural biases, closing the attractiveness gap with global brands.

For Chilean and Latin American companies competing with global firms for talent, investing in CSR and diversity is not only ethics: it is competitive strategy.

The effect depends on gender

Gender-diversity signals are not uniform. Literature shows a consistent positive effect on the target group — women — who read inclusion signals as better treatment and person–organization fit.

For men, findings are more ambiguous. Kruse, Pyun and Raswant support a weakly negative effect among men: a zero-sum mindset where quotas or women’s advancement programs are seen as reducing male opportunity.

Companies must communicate and implement diversity carefully. A gap between diversity promised in recruiting and the real climate can drive higher turnover among groups attracted by those promises.

Tools like the interview scorecard and CV screener in Obrii App help standardize evaluation and reduce bias so diversity is an outcome of merit and fairness.

Toxic culture, diversity, and turnover

The paper situates the discussion in a broader context: acquiring human capital in international markets does not happen in a vacuum. Sull et al. (2022), cited in the study’s introduction, found that failing to address toxic corporate culture is the strongest predictor of industry-adjusted turnover — above compensation. And a central element of that toxicity is not promoting diversity.

That closes the loop: diversity signals attract talent, but if internal reality does not match, turnover spikes. Wellbeing and burnout are the visible face of a climate that does not deliver on its promise. Before scaling employer-branding policies, measure psychosocial risk in teams:

Turnover and bad hires have a concrete financial cost. When a candidate attracted by diversity signals does not fit — or when culture pushes out valuable talent — the impact goes far beyond severance:

For a quick estimate of talent cost and severance, use our free labor-cost calculator.

What this means for HR in Chile and LatAm

Kruse, Pyun and Raswant’s findings have direct implications for HR leaders in the region:

1. Read local foreignness: If you run a multinational in LatAm — or a local firm competing with them — analyze how your origin is perceived. In markets where some groups face discrimination, positioning as an equitable employer can be a competitive edge.

2. Intentional CSR and diversity: Local firms can gain a lot by emphasizing visible, authentic diversity initiatives — leveling the field against multinationals with a consolidated global brand.

3. Coherent communication: Signaling must match real culture. Use inclusive job descriptors and selection processes — from the test catalog to interviews — that reflect equity values.

4. Manage perceptions: Communicate diversity benefits for the whole organization, not as a zero-sum game. Open dialogue reduces backlash in segments that see quotas as a threat.

5. Expert partnership when it matters: For critical roles, combine technology with expert judgment. Our B2B headhunting and psychometric assessment services are designed to align external signal and internal reality.

How Obrii covers this

At Obrii we know attracting human capital in competitive markets requires coherence between what you communicate and what you measure:

• Obrii App — HR OS to standardize recruiting: CV screener, scorecard, job descriptors, and test catalog in one flow.
• Psychometric assessment — Predictive reports for hiring decisions with rigor, not intuition alone.
• B2B headhunting — Executive search with cultural fit and competency assessment.
• Labor simulator and CESQT burnout test — Free tools to quantify risk and cost before you decide.

Start your 14-day Pro trial free — no credit card.

FAQ

What is liability of foreignness, and how do multinationals overcome it?

It is the set of extra costs foreign firms face in a local market from unfamiliarity, missing networks, and cultural or legal differences. It is mitigated by firm-specific advantages (brand, technology) or local integration; but in markets with entrenched discrimination, the outsider’s advantage can outweigh those costs.

Why do diversity signals benefit local firms more?

Because they can offset negative perceptions tied to national or cultural context. Multinationals from high-reputation countries already send positive signals; the marginal impact of diversity is larger where that reputation does not exist by default.

Do diversity signals always improve talent attraction?

Not uniformly. They attract women more strongly and can create a weakly negative reaction among men if framed as zero-sum. Authenticity and coherence between external communication and internal culture are necessary conditions.

How can Obrii help align signal and reality in selection?

With Obrii App for standardized processes, psychometric assessment to measure cultural fit and competencies, and headhunting for critical roles — reducing the gap between what your employer brand promises and what your hiring process delivers.

Source: Kruse, N., Pyun, L., & Raswant, A. (2026). Human Capital and International Markets. Asia Pacific Journal of Management. https://link.springer.com/article/10.1007/s10490-026-10132-x