Insidious institutional challenges of mature MNE subsidiaries operating in weak institutional markets: Corporate governance to the rescue

Franklin Nakpodia, Folajimi Ashiru, Emmanuel Adegbite and Nikolina Koporcic

Journal of International Management, 2025, vol. 31, issue 4

Abstract: Insidious institutional challenges are unknown versions of known challenges that exist and persist even for mature multinational enterprises (MNEs) in host markets. Although the international business literature offers valuable insights into the significance of corporate governance mechanisms, institutions, and institutional environment relationships, a practical understanding of what insidious institutional challenges are and how they can be addressed using corporate governance mechanisms, especially in weak institutional environments, is less researched. Therefore, relying on institutional theorizing and qualitative evidence from 34 interviews with executives of mature MNE subsidiaries in Nigeria, this paper documents three insidious institutional challenges encountered by mature MNE subsidiaries: the organisational identity conundrum (‘us vs them’), limited attention to social capital discordance (‘bonding capital vs trust capital’), and persistent intention contradictions (‘elaborate politically correct rhetoric vs limited believable action’). The study also identifies three corporate governance-related themes that mature MNE subsidiaries can utilize to manage institutional challenges: enhanced local stakeholder engagement, elevated accountability drivers, and digital technology and innovation deployment. The study advances international business literature as it sheds theoretical as well as practical insights into how mature MNE subsidiaries operating in a weak institutional context can overcome insidious institutional challenges.

Keywords: Mature MNE subsidiaries; International business; Weak institutional contexts; Corporate governance; Institutional challenges; Institutional theory; Nigeria (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intman:v:31:y:2025:i:4:s1075425325000365

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DOI: 10.1016/j.intman.2025.101258

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