Institutional Voids and Corporate Social Performance: Evidence from Emerging Market Multinationals in Environmentally Sensitive Industries
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2025-07-02
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en
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Abstract
This study examines the relationship between institutional voids in emerging markets and the
corporate social performance (CSP) of emerging market multinational enterprises (EM-MNEs).
Based on the institutional theory, we propose that institutional voids can act as barriers and as
drivers for EM-MNEs to improve CSP. Institutional voids create social and regulatory
uncertainty, increase transaction costs, and reduce the pressure on firms to act responsibly
which hinders CSP. However, EM-MNEs can also be driven by institutional voids to improve
CSP, to overcome the liability of origin and gain legitimacy in the global market. We propose
that operating in an environmentally sensitive industry, may moderate the impact of
institutional voids on CSP. We test the hypotheses by conducting a longitudinal study using
panel data of 291 EM-MNEs from 20 emerging countries between 2014 and 2023. Our results
indicate that institutional voids act as barriers for the CSP of EM-MNEs. Our study highlights
the distinction between symbolic corporate social responsibility (CSR) efforts and substantive
CSP, while institutional voids drive EM-MNEs to adopt symbolic CSR, they hinder the
implementation of substantive CSP.
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Faculteit der Managementwetenschappen