Multinational Enterprises’ Dual Agency Role: Formal Institutions and Corporate Social Responsibility in Emerging Markets

Maoliang Bu and Ying Liu
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Maoliang Bu: School of Business, Nanjing University, Nanjing 210093, China
Ying Liu: College of Business & Public Management, Wenzhou-Kean University, Wenzhou 325015, China

Sustainability, 2022, vol. 14, issue 4, 1-22

Abstract: This study systematically examines whether and how a nation’s extent of economic globalization, manifested by the presence of multinational enterprises (MNEs), and formal institutional development may jointly influence a nation’s overall corporate social responsibility (CSR) involvement across emerging markets. Drawing on institutional theory, we develop a dual agency model: on the one hand, MNEs take the role of CSR agents in demonstrating CSR practices and imposing direct influences on local firms in emerging markets; on the other hand, MNEs function as institutional agents, conducting activities of institutional entrepreneurship and channeling global institutional influences into emerging markets. Empirically, we conduct a bootstrapped test of mediation analysis across 83 developing countries. Our findings show that in the context of emerging markets, a more significant presence of MNEs in a nation positively links to its firms’ overall CSR involvement, and the nation’s formal institutional evolvement partially mediates such a positive relationship. This study ends with a conclusion and discussions on the contributions and implications.

Keywords: economic globalization; corporate social responsibility (CSR); multinational enterprises (MNEs); institutional theory; institutional entrepreneurship; a dual-agency model; CSR agents; institutional agents (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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