The less transparent, the more attractive? A critical perspective on transparency and place branding

According to recent surveys, transparency has become a key issue in business decisions. Foreign firms increasingly view transparent economic policies as crucial in their investment planning. Evidence has shown that clear and predictable environments play an important role in companies’ decisions to develop their activities in a specific place. Nowadays, place branding scholars and practitioners alike call for more transparency and responsibility in branding strategies, assuming that trust, enhanced by transparency, is needed to improve the attractiveness of a place. In a study by a major consulting firm, investors in Switzerland specifically mentioned stability and transparency as the most important location factors. However, the country scores poorly in terms of financial transparency. This paradox reveals a degree of confusion about the nature of transparency, which is addressed in this article. We argue that, while transparency of the regulatory framework can effectively improve the attractiveness of a place, opacity of legal requirements may also attract foreign investors. In this sense, transparency of and required by the rules can be at odds. A nuanced approach to transparency and a more detailed analysis are needed to provide a clearer explanation of the relationship between transparency and the attractiveness of a place.