Perceived multinational subsidiary autonomy and local commitment to corporate social responsibility in China

Abstract

Most multinational firms might follow the global direction of the home country and face local stakeholders’ pressure on their CSR commitment to the host country. Past research has suggested that perceived autonomy is an essential condition that promotes local commitment to CSR, however, the relationship is not conclusive. This study aims to test a theoretical framework for the association between perceived subsidiary autonomy and local CSR practices' commitment. A survey of senior managers was conducted on multinational subsidiaries in China in 2022 to test our proposed framework. Structural equation modeling was used to analyze the collected data. It was found that there is an association between perceived commitment to local CSR practices and corporate performance. There is an association between perceived subsidiary autonomy and commitment to local CSR practices. Entrepreneurial orientation acts as a partial mediator in the relationship between perceived subsidiary autonomy and commitment to local CSR practices. Multinationals' products/brands could be more competitive in the Chinese market if their headquarters is more flexible on local CSR practices in the host country. This paper provides evidence of the association between perceived subsidiary autonomy and local CSR practices’ commitment.