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MNCs’ Social Innovation in Emerging Markets: A Stakeholder Perspective

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Abstract

This study aimed to identify the effects of primary and secondary stakeholders on social innovation practices in local markets by subsidiaries of multinational corporations (MNCs) and to confirm the link between social innovation and the subsidiaries’ capacity to adapt to the local market. By adopting a stakeholder perspective as an overarching theoretical lens and collecting data from China—the world’s largest emerging market—this study reveals the crucial catalytic role that most primary and secondary stakeholders play in enhancing social innovation by MNC subsidiaries in host countries. In addition, we provide strong evidence of a causal relationship between social innovation and adaptive capability in host economies. Our results contribute to current scholarship by identifying theoretical cornerstones and practical managerial implications of social innovation in emerging markets.

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Notes

  1. According to GlobalEDGE (2023), developed markets are generally mature and have high gross domestic product, gross national product, and per capita incomes. Mature markets are characterized by industrialization, are stable, and have lower risk than emerging and frontier markets.

  2. The World Health Organization first reported the COVID-19 outbreak on January 30, 2020, and declared a pandemic on March 11, 2020. https://www.who.int/emergencies/diseases/novel-coronavirus-2019.

  3. They are the Academy of Management Review, California Management Review, Corporate Governance: The International Journal of Business in Society, Corporate Social Responsibility and Environmental Management, Harvard Business Review, Journal of Business Ethics, Journal of Business Strategy, Journal of Management Studies, Leadership & Organization Development Journal, Long Range Planning, Management Decision, Social Responsibility Journal, Strategic Management Journal, and Strategy & Leadership.

  4. We are grateful to an anonymous reviewer who recommended Lange & Pfarrer (2017), which is helpful for us in strengthening the structure and logic of our Introduction.

  5. “Local community” refers to a group of local residents who closely interact, pursue common regional values, and have communal social bonds based on a certain regional area, as a sub-unit of a country (Conable 2015). The local community shares common elements, such as regionality operating within a close geographic space, active social interactions between people, a common sense of belonging, and a social identity.

  6. We thank an anonymous reviewer for offering this insight.

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Funding

This work was supported by Hankuk University of Foreign Studies Research Funds.

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Author notes

  1. Shufeng Xiao and Taewoo Roh are the equally contributing first authors.

Authors and Affiliations

  1. Division of Business Administration, Sookmyung Women’s University, Seoul, South Korea

    Shufeng Xiao

  2. School of International Studies, Hanyang University, Seoul, South Korea

    Taewoo Roh

  3. Birmingham Business School, University of Birmingham, Birmingham, UK

    Pervez N. Ghauri

  4. Ingenium College of Convergence Studies, Hankuk University of Foreign Studies, Yongin-si, Kyonggi-do, South Korea

    Moon Hwan Cho

  5. College of Business, Hankuk University of Foreign Studies, Seoul, South Korea

    Byung Il Park

Authors
  1. Shufeng Xiao
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  2. Taewoo Roh
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  3. Pervez N. Ghauri
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  4. Moon Hwan Cho
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  5. Byung Il Park
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Correspondence to Byung Il Park.

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Xiao, S., Roh, T., Ghauri, P.N. et al. MNCs’ Social Innovation in Emerging Markets: A Stakeholder Perspective. Manag Int Rev (2024). https://doi.org/10.1007/s11575-024-00537-5

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