Multinationals in emerging markets: are there institutional pressures for sustainable development?
DOI:
https://doi.org/10.6008/CBPC2179-684X.2021.002.0028Keywords:
Multinational Theory, Institutional theory, Sustainable Development, Emerging Markets, Environmental PoliciesAbstract
Multinational companies have been operating their factories in emerging and underdeveloped contexts. In these contexts, companies encounter soft environmental legislation, fragile labor laws, abundant raw materials, and low wages. This essay aims to discuss the performance of multinational companies and their environmental policies in emerging institutional environments. Thus, this theoretical essay seeks to contribute to the discussions about institutional pressures that multinationals suffer in emerging contexts, in the light of Institutional Theory, since there is an absence of theoretical essays that work on this aspect. To this end, this essay uses as a background for discussion the Multinational Theory and Institutional Theory. The institutional environment affects the performance of multinationals, changing their environmental policies and practices. Emerging countries are characterized by social problems and high levels of corruption. Companies setting up in these environments encounter unclear rules and consumers with low leverage for environmental products, actions and policies. Therefore, these unclear rules leave room for firms to act in ways that achieve their organizational objectives, without concern for the demands of all stakeholders.
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