New Horizons in International Business series
Edited by John R. McIntyre, Silvester Ivanaj, Vera Ivanaj and Rabi N. Kar
Chapter 5: Convergence and divergence of transnational regulation: the issue of MNEs and corporate social responsibility
Globalization of the marketplace has resulted in the diffusion of common norms and the emergence of a globalized society accentuated by transnational networks of governmental and non-governmental organizations. The extent of the norm diffusion is not only influenced by the institutional environment but also by the extent of governments’ and citizens’ patronage. Multinational enterprises (MNEs) have therefore become major players in the globalized world economy and are consequently wielding great influence on economic dynamics in developed and developing countries alike. Trends toward global economic integration are raising questions concerning regulatory convergence and divergence in new scope and context. Several researchers (Potoski and Prakash, 2004; Walter, 2008; Helleiner and Pagliari, 2011) have established that informal regulatory convergence, regulatory fragmentation (Drezner, 2007) and co-operative regulatory decentralization (Singer, 2004) are fueled by the forces of globalization as adopted by MNEs operating in emerging economies. Though globalization has increased the strength, number and diversity of stakeholder pressures and consequently compelled MNEs to promote CSR activities, recent research highlights disparities in the way MNEs address corporate social responsibility (CSR) (Gardberg and Fombrun, 2006).
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