This study examines how home and host country institutions, compliance management and corporate political strategy are interrelated and they affect firm performance of MNCs in emerging economies in the context of institution theory and corporate political strategy. The research employs a qualitative study using GSK China corruption scandal in 2014. The results indicate MNC subsidiaries in emerging economies are inclined to corruption despite strict regulation and enforcement by home country government and the authorities. This situation becomes more prevalent when MNCs are inadequate for compliance management or intend to leverage corruption to gain profits in emerging economies. Since ‘outsourcing corruption’ to dodge their home and host country regulations, GSK China could boost their performance far beyond average growth rate in a rapidly growing Chinese pharmaceutical industry until authorities’ disclosure. However, repeated corruption behaviors raise costs of corruption such as bribery, unjust recruitment and risks of investigation or prosecution for corruption by the authorities detecting it by whistleblowers‘ reporting. The research suggests that MNC subsidiaries’ political strategy contributes toward gaining profits and competitive advantages in the short run, however, it jeopardizes MNCs’ position and lowers its rankings about growth, profits, R&D potentials and reputation in the global pharmaceutical industry than their competitors in the long run.