Host-Country Institutions and Emerging Market Multinational Enterprises’ CSR Performance

Abstract

Grounded in the institutional knowledge perspective, this study explores the mechanisms through which and the conditions under which exposure to high-quality host-country institutional environments can affect emerging market multinational firms’ corporate social responsibility (CSR) performance. In doing so, we propose a three- stage institutional knowledge learning process model, namely institutional knowledge acquisition, assimilation and exploitation. We argue that high quality of host-country institutions will enable the institutional knowledge acquisition process, but may hinder assimilation process, thus exhibiting an inverted U-shape relationship between the quality of host-country institutions and CSR performance of emerging market multinational enterprises. Moreover, we propose that institutional knowledge base of emerging market firms can positively moderate this curvilinear relationship by facilitating the institutional knowledge acquisition, assimilation, and exploitation process. The results of analyzing a longitudinal dataset of listed Chinese firms from 2009 to 2017 support our key arguments.