TY - JOUR
T1 - Developed market or developing market?
T2 - A perspective of institutional theory on multinational enterprises’ diversification and sustainable development with environmental protection
AU - Li, Ji
AU - Zhang, Ying
AU - Hu, Yanghong
AU - Tao, Xiaolong
AU - Jiang, Wanxing
AU - Qi, Lei
N1 - Funding Information:
The authors gratefully acknowledge the support for this research from FRG2/14-15/089 from Hong Kong Baptist University.
Publisher Copyright:
Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment
PY - 2018/11
Y1 - 2018/11
N2 - Integrating previous research, we propose a theoretical model predicting the different effects of global diversification on corporate social performance in environmental protection (EP) by focusing on the institutional difference between developing and developed countries. Moreover, arguing for the moderating effects of firm resources, we also predict and test the effect of firm slack resources on the relationship between the diversification and corporate social performance in EP. By analyzing longitudinal data of 847 multinational enterprises (MNEs), we found empirical evidence that when MNEs diversify mainly into developed countries, they are likely to show more EP. By contrast, when MNEs diversify into developing countries, they are likely to show less EP. Furthermore, we found that a firm's financial slack could weaken the positive effect of diversification into developed countries and enhance the negative effect of diversification into developing countries on EP. However, a firm's human resource slack could only weaken the positive effect of diversification into developed countries on EP. We conclude with a discussion of the implications of the findings.
AB - Integrating previous research, we propose a theoretical model predicting the different effects of global diversification on corporate social performance in environmental protection (EP) by focusing on the institutional difference between developing and developed countries. Moreover, arguing for the moderating effects of firm resources, we also predict and test the effect of firm slack resources on the relationship between the diversification and corporate social performance in EP. By analyzing longitudinal data of 847 multinational enterprises (MNEs), we found empirical evidence that when MNEs diversify mainly into developed countries, they are likely to show more EP. By contrast, when MNEs diversify into developing countries, they are likely to show less EP. Furthermore, we found that a firm's financial slack could weaken the positive effect of diversification into developed countries and enhance the negative effect of diversification into developing countries on EP. However, a firm's human resource slack could only weaken the positive effect of diversification into developed countries on EP. We conclude with a discussion of the implications of the findings.
KW - developed countries
KW - developing countries
KW - environmental protection
KW - financial slack
KW - geographic diversification
KW - human resource slack
KW - institutional theory
KW - multinational enterprises
UR - http://www.scopus.com/inward/record.url?scp=85041718409&partnerID=8YFLogxK
U2 - 10.1002/bse.2037
DO - 10.1002/bse.2037
M3 - Journal article
AN - SCOPUS:85041718409
SN - 0964-4733
VL - 27
SP - 858
EP - 871
JO - Business Strategy and the Environment
JF - Business Strategy and the Environment
IS - 7
ER -