The impact of corporate social responsibility in home countries on the financial resilience of emerging-market multinationals: An analysis on Brazilian MNEs

In today’s volatile business landscape, understanding the impact of an uncertain institutional environment on emerging-market multinational enterprises (EMNEs) is crucial. This study compares the financial resilience (measured by financial performance) of EMNEs with corporate social responsibility (CSR) activities with EMNEs without CSR activities, as well as how local companies changed before and after the COVID-19 outbreak. Using panel data from 404 publicly listed Brazilian companies between 2018 and 2021, this study reveals that an uncertain institutional environment can lead EMNEs to increase non-market strategies and develop distinct firm-specific advantages via CSR. Our findings contribute to the literature by supporting the relevance of CSR activities at home to reduce the liability of origin and to provide global legitimation to EMNEs. Furthermore, it highlights the positive connection between CSR and financial resilience and the role of environmental, social, and governance (ESG)-driven investors in advocating for better governance, which ultimately enhances financial resilience.