Entrepreneurial Orientation, Environmental Dynamism, and Disruptive Sustainability in Emerging Markets: Evidence From MNE Subsidiaries in China

Shufeng Xiao, Taewoo Roh and Byung Il Park

Business Strategy and the Environment, 2025, vol. 34, issue 8, 10012-10032

Abstract: This study theorizes and empirically examines the relationship between multinational enterprises' (MNEs) entrepreneurial orientation (EO), environmental dynamism (ED), and their pursuit of disruptive sustainability in emerging markets. It also explores the moderating effects of host‐market governmental pressures and liabilities of foreignness (LOF) on these relationships. We test our hypotheses using hierarchical regression analysis on a dataset of 218 MNE manufacturing subsidiaries in China. Given China's growing emphasis on sustainability‐driven economic transformation—reflected in national policies promoting green innovation and environmental governance—MNE subsidiaries face increasing pressure to pursue disruptive sustainability in this dynamic market. The findings reveal that EO and ED positively influence disruptive sustainability, both individually and interactively. Moreover, host‐market governmental pressures and LOF exert distinct moderating effects on these relationships. By integrating two key theoretical concepts (i.e., EO and ED), this study contributes to the literature on disruptive sustainability and responds to calls for a deeper understanding of how MNE subsidiaries can achieve disruptive sustainability in foreign markets.

Date: 2025
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