Like parent, like child: MNCs’ CSR and their foreign subsidiaries’ environmental footprint

• Published in: Journal of business research Vol. 172; p. 114413
• Main Authors: Zhou, Xi, Ying, Sammy Xiaoyan, You, Jiaxing, Wu, Huiying
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.02.2024
• Subjects: Corporate environmental performance; Corporate social responsibility; Institutional theory; Multinational corporations; Multinational corporations; Corporate social responsibility; Institutional theory; Corporate environmental performance
• ISSN: 0148-2963; 1873-7978
• DOI: 10.1016/j.jbusres.2023.114413

•Using a sample of subsidiaries of U.S. MNCs operating in China, this study finds that subsidiary environmental footprint is negatively related to parent environmental performance.•The relationship is weakened by the levels of legal system development, collectivism, and political system development in regions where MNC subsidiaries operate.•The relationship is heightened by the strength of social capital and the stringency of environmental regulations in regions where MNC headquarters are located. This study examines how MNCs’ foreign subsidiaries respond to internal demands from the parent and external demands from the host and home institutions to determine their environmental footprint. Using a sample of subsidiaries of U.S. MNCs operating in China, we find that subsidiary environmental footprint is negatively related to parent environmental performance. We also find that the impact of parent environmental performance on subsidiary environmental footprint is weakened by the levels of legal system development, collectivism, and political system development in regions where MNC subsidiaries operate and is heightened by the strength of social capital and stringency of environmental regulations in regions where MNC headquarters are located. Our findings have implications for executives of MNCs and policymakers.