Can multinational companies foster institutional change and sustainable development in emerging countries? A case study

Abstract

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.

Does Technological Innovation Drive Corporate Sustainability? Empirical Evidence for the European Financial Industry in Catching-Up and Central and Eastern Europe Countries

“…In the particular case of the financial industry (e.g., [29,38]), the relationship between innovation and sustainability is said to be positive, albeit to the best of our knowledge there are only two studies, so further research is required. As stated by Forcadell et al [1], innovation can improve corporate sustainability on many fronts, such as new digital requirements, customer demand and also financial performance. Similarly, in the specific case of the financial industry, Yip and Bocken [11] show how doing good is related to doing well in the bank industry of Hong-Kong while empirically evidencing how customers prefer those banks adopting sustainable business models.…”

“…These unique capabilities can also drive sustainability. Literature has connected innovation capability from internal and external sources of knowledge to sustainability-oriented innovation (e.g., [17,34]) and to the financial and banking industry [1]. Sustainability-oriented innovation can also be part of a firm's innovation capability, albeit different scholars claim that sustainability-oriented innovation capability is more "complex and sophisticated" [62].…”

“…In the financial industry, the sustainability-oriented innovation topic is underresearched [1] and constitutes this study's goal. Innovation in the financial industry, on the one hand, is a key topic well-researched by scholars [2,3], especially referring to digitalization of banking [4].…”

“…Despite both topics being well-researched in the financial industry, they are tackled in isolation from each other, rarely being analyzed simultaneously. The link between innovation and sustainability in the financial industry, therefore, is under-researched [10], Forcadell et al [1] and Yip and Bocken [11] being the only two recent and remarkable pioneering exceptions focused on Western countries [3] and the Hong-Kong financial industry [11], respectively. Why is sustainability-oriented innovation in the financial industry so under-researched?…”

“…Why is sustainability-oriented innovation in the financial industry so under-researched? The financial industry is assumed to have a limited direct environmental impact [1], as it is not a manufacturing industry related to global warming, waste or the carbon footprint. As Yip and Bocken [11] point out, nevertheless, financial industry presents a very important impact on sustainability, broadly in all its dimensions of governance, environment and social terms.…”