Institutional isomorphism pressure and multinational corporations’ environmental and social performance

Abstract

ABSTRACT The influence of institutional isomorphism pressure (IIP) on multinational corporations’ (MNCs) environmental and social responsibility has attracted considerable attention from academics. Therefore, this study uses data from MNCs on the 2019 Forbes Global 2000 list to investigate the relationship between IIP (coercive, normative, and mimetic) and MNCs’ environmental and social performance. Our results show that (1) IIP effectively enhances MNCs’ environmental and social performance; (2) compared with other institutional factors, the current coercive-related institutional factors (e.g. regulations) fail to promote environmental performance, and (3) normative related institutional factors (e.g. social norms) do not improve MNCs’ environmental performance in China and Japan. Our study reveals the relationship between IIP and MNCs’ environmental and social performance and provides a more comprehensive description approach of IIP measurement. Moreover, suggestions on enhancing MNCs’ environmental responsibility by strengthening IIP also provide policymakers and MNCs.