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

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  • Maoliang Bu

    (School of Business, Nanjing University, Nanjing 210093, China
    Hopkins-Nanjing Center, Nanjing 210093, China)

  • Ying Liu

    (College of Business & Public Management, Wenzhou-Kean University, Wenzhou 325015, China)

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.

Suggested Citation

  • Maoliang Bu & Ying Liu, 2022. "Multinational Enterprises’ Dual Agency Role: Formal Institutions and Corporate Social Responsibility in Emerging Markets," Sustainability, MDPI, vol. 14(4), pages 1-22, February.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:4:p:1974-:d:745550
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    References listed on IDEAS

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