Corporate compliance capability of EMNEs: a prerequisite for overcoming the liability of emergingness in advanced economies
International Journal of Emerging Markets
ISSN: 1746-8809
Article publication date: 22 October 2021
Issue publication date: 21 November 2023
Abstract
Purpose
The literature on how emerging market multinational enterprises (EMNEs) overcome the liability of emergingness/origin has sidestepped a prerequisite for any efforts to overcome liability, namely, corporate compliance. The authors argue that EMNEs build corporate compliance capability as a knowledge-based firm-specific advantage (FSA) to adapt to institutional norms in advanced economies. In this study, the authors empirically examine the intricate relationships between corporate compliance capability and performance in the US subsidiaries of Chinese firms.
Design/methodology/approach
In this study, the authors use survey data to empirically examine the intricate relationships between corporate compliance capability and performance in the US subsidiaries of Chinese firms.
Findings
The findings reveal a positive relationship between corporate compliance capability and subsidiary performance, as mediated by local financing.
Originality/value
The study suggests that corporate compliance capability helps a subsidiary gain legitimacy, which leads to local resource acquisition and utilization. Corporate compliance capability thus serves as a source of a knowledge-based FSA for EMNEs in developed economies.
Keywords
Acknowledgements
The first three authors contribute equally and their names are listed in the alphabetical order.
The authors are grateful for the financial support provided by the China Business Studies Initiative at University of San Francisco. This research is also in part supported by grants from Social Science and Humanities Research Council of Canada and National Natural Science Foundation of China (72072124, 71732005, 71672123, 71772096, 71772165, 72091214).
Citation
Wang, L., Xie, Z., Zhang, H., Yang, X. and Tan, J. (2023), "Corporate compliance capability of EMNEs: a prerequisite for overcoming the liability of emergingness in advanced economies", International Journal of Emerging Markets, Vol. 18 No. 10, pp. 3486-3505. https://doi.org/10.1108/IJOEM-04-2020-0324
Publisher
:Emerald Publishing Limited
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