Home-country institutions and corporate social responsibility of emerging economy multinational enterprises: The belt and road initiative as an example

Abstract

This paper examines the impact of home country institutions on corporate social responsibility (CSR) of multinational enterprises from emerging markets (EM-MNEs). Taking the Belt and Road Initiative (BRI) as an example and using a sample with 2052 firm-year observations from China over the period 2008-2018, we find that the BRI exerts a positive and significant effect on overall CSR of Chinese MNEs involved in the BRI and the positive effect is stronger for Chinese stateowned MNEs. In addition, only two dimensions of CSR (Employee Relations and Products) are improved significantly under the pressure of BRI. Finally, we examine the interactive effect of home-and host-country institutions on Chinese MNEs' CSR and find the positive impact of the BRI on MNEs' CSR performance is stronger in host countries with a higher level of CSR related institutional pressure. These results provide practical suggestions for the Chinese government and 2 MNEs to further improve CSR under the BRI, and enrich our understanding of the interactive effect between home-and host-country institutions on enhancing Chinese MNEs' reputation and promoting regional cooperation with countries along the BRI.

The Belt and Road Initiative and international business policy: A kaleidoscopic perspective

“…Several papers included in this Special Issue help us better understand how the BRI influences China’s economic performance and geopolitical position through IB. Yang ( 2022 ) focuses on the link between the BRI and innovation in China. Specifically, the author studies how the development of multiple foreign railroad projects in the context of the BRI has influenced the industry’s innovation performance at home.…”

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The Current Development Status of The Corporate Social Responsibility in Multinational Companies

“…Under the pressure of the BRI. While must of CSR of participating Chinese MNCS has a positive impact on the corporate goodwill, profit, and so on, especially some Chinese owned multinational enterprises [10]. At the same time, BRI is a good way to decline institutional distance between host communities and home country institutions, which makes MNCs close with native citizens.…”

Are foreign companies a blessing or a curse for local development in Brazil? It depends on the home country and host region's institutions

“…While multinationals bring home country institutions with them, they need to adapt to the host's institutional context (Kwok & Tadesse, 2006), and their strategies will be shaped by the host (Ketteni & Kottaridi, 2018; Mazé & Chailan, 2020). As FDI is a high‐profile investment with significant sunk costs, the host's institutions, government stability, and uncertainty become especially important for foreign investors (Aleksynska & Havrylchyk, 2013; Charpin et al., 2020; Yang et al., 2020).…”

“…A variety of benefits may result from the combination of MNCs and institutional voids, as corporate social responsibility is recognized as a practice to counterbalance institutional voids (Mazboudi et al., 2020). This process is also of great interest to MNCs, as it helps with their legitimization and publicity (Yang et al., 2020). Additionally, investing in education and health may increase the MNCs' productivity levels and reduce absenteeism, for example (Bui et al., 2018; Plottier & Park, 2020).…”