Do social engagement and transnational boards matter in home market environmental engagement and internationalization of BRICS MNEs to the advanced market economies?

Abstract

The internationalization of emerging market multinational enterprises (EMNEs) into advanced markets is a critical area of research. However, limited attention has been paid to how domestic environmental engagement influences this process. This study addresses this gap by applying institutional and resource dependency theory perspectives to panel data from BRICS-based multinationals. The findings indicate a positive relationship between domestic environmental engagement and the degree of internationalization into advanced markets. Furthermore, the presence of a transnational board strengthens this relationship, while domestic social engagement negatively moderates it. The results suggest the crucial roles of transnational boards and domestic social engagement in shaping EMNEs’ environmental strategies, which, in turn, influence their international expansion. This study contributes to institutional and resource dependency theory perspectives by demonstrating that local environmental innovations can help BRICS EMNEs to navigate the more demanding and complex institutional environments of advanced economies, where sustainability expectations are higher. It also highlights the importance of transnational boards, suggesting that EMNEs should consider appointing international board members to better align with the expectations of advanced market stakeholders and enhance their environmental engagement capabilities.