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Can multinational companies foster institutional change and sustainable development in emerging countries? A case study
Author(s) -
Forcadell Francisco Javier,
Aracil Elisa
Publication year - 2019
Publication title -
business strategy and development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.488
H-Index - 7
ISSN - 2572-3170
DOI - 10.1002/bsd2.45
Subject(s) - multinational corporation , business , corporate social responsibility , emerging markets , sustainable development , institutional theory , entrepreneurship , developing country , face (sociological concept) , process (computing) , economic system , industrial organization , economic growth , economics , public relations , political science , finance , management , social science , sociology , computer science , operating system , law
Emerging countries present institutional necessities that hinder their sustainable development. In the face of this challenge, companies, and in particular multinational companies (MNCs), can foster sustainable development through their corporate social responsibility (CSR) initiatives. This study focuses on the role of institutional change in transforming CSR into sustainable development in emerging countries. To this end, we propose a view of CSR focused on its institutional determinants and outcomes from a social and developmental perspective. By using quantitative and qualitative data, we analyse the case of three MNCs from different industries based in Europe and operating in Mexico. The case study shows how firms can stimulate institutional change in developing economies and contribute to their sustainable development as measured by the sustainable development goals. Various mechanisms about how this process is made are devised: institutional entrepreneurship, multistakeholder initiatives, interconnection of different institutional dimensions, and subsidiary entrepreneurship. The case study highlights the interaction among MNCs, developing countries, and institutions and how firms' sustainable actions scale up to the macro level.