The role of corporations in addressing non-market institutional voids during the COVID-19 pandemic: The case of an emerging economy

Abstract

International business scholars have been urged to investigate how multinationals respond to grand challenges, one of which has been the COVID-19 pandemic. We provide insights into how corporations have mitigated social and economic externalities triggered by the pandemic in the presence of non-market institutional voids – policy failures in the provision of collective goods. We distinguish between corporate responses to long-term chronic voids and to acute voids that are contingent on crisis situations. We identify six categories of initiatives undertaken in Brazil by 55 Brazilian and foreign-owned multinationals. Due to their international experience, foreign multinationals appear to be better equipped than local ones to pursue standardized non-market initiatives, based on their technical capabilities and their established trust-based relationships with international foundations. This issue merits further investigation. We suggest that our analytical framework for understanding events and corporate responses in Brazil during the COVID-19 pandemic can be applied to many other emerging countries, and hence could be useful to policymakers, businesses, and other types of organizations in confronting acute crises in contexts where institutional failures are persistent. The ability of multinationals to alleviate sources of socio-economic disruption also advances the ongoing debate over the future role of the corporation in society.Supplementary InformationThe online version contains supplementary material available at 10.1057/s42214-022-00141-0.