Motivating Foreign Subsidiaries of MNEs to Engage in CSP: An Integrative Approach

Abstract Building upon an institutional perspective and the resource-based view, we theorize and address questions on what drives foreign subsidiaries of multinational enterprises (MNEs) to engage corporate social performance (CSP) strategies and how CSP contributes to the competitiveness of MNE subsidiaries in the host market. Subsequently, we theorize and explore the roles governments in home and host countries play in motivating MNE subsidiaries to adopt and implement CSP strategies and activities, and how institutional effects may be moderated by the specific resources and capabilities of MNE subsidiaries. The conceptual framework presented in this work was empirically tested using survey data collected from foreign subsidiaries of Chinese MNEs. The results, which provide broad support for most of the research hypotheses, can contribute to the stream of research on the CSP of MNE subsidiaries. More importantly, this study sheds new light on the particular importance of government pressure from both home and host countries. In particular, firm-specific resources or capabilities moderate the institutional effects (i.e., government pressure) on CSP strategies of MNE subsidiaries, ultimately enhancing the competitive advantages of these subsidiaries in the host market.