Doctor of Philosophy
Multinationals face growing demands from nonmarket forces, making them increasingly vulnerable to social and political disruptions. This thesis investigates two sets of relationships that are at the core of multinational nonmarket strategy: firm-government and firm-society relationships, and in so doing advances our understanding of global strategies employed to tackle challenges. It comprises three essays. Essay 1 investigates the influence of the liability of stateness (LoS) on cross-border acquisitions, and I find that state-owned enterprises (SOEs) are 9% more likely to face regulatory scrutiny and that this effect is mitigated if the acquisition is indirect and when SOEs venture into host regions with high unemployment or with prior experience with state-owned employers. Essay 2 compares corporate social responsibility (CSR) performance between SOEs and private firms. I find that SOEs perform two standard deviations above private counterparts in CSR practices and that both home country CSR regulatory pressures and host country CSR regulatory pressures strengthen SOEs’ public value creation. Essay 3 focuses on corporate social responsibility (CSR) performance in the context of value chain partner misbehavior, and I find that CSR performance increases after misbehavior and that the effects vary depending on the type of partner and the presence of stricter home country CSR regulatory pressures. In summary, this dissertation outlines nonmarket challenges and strategies for multinationals to succeed globally.
Summary for Lay Audience
In today's world, multinational companies face increasing challenges from political and social forces. This thesis explores how these companies deal with these challenges by examining their relationships with governments and societies. The study is divided into three parts.
In the first part, the focus is on how state-owned companies (SOEs) make decisions about international business deals and how local factors in the countries they enter can affect these decisions. The research shows that SOEs are more likely to face regulatory hurdles due to their ties to foreign governments but can overcome these obstacles through indirect acquisitions, investing in areas with high unemployment, or with local stakeholders who have experience with state-owned firms.
The second part investigates whether SOEs have better social responsibility practices than private companies. The study found that SOEs, due to their unique public-private structure, often prioritize social value creation and, as a result, have stronger social responsibility performance. Furthermore, stricter social responsibility regulations in their home and host countries can enhance SOEs' role in creating public value.
Lastly, the third part looks at how companies respond to irresponsible behavior within their business networks. As multinational corporations expand globally, they need to improve their social responsibility performance to protect/rebuild their reputation and legitimacy due to their network partner misbehaviors. The findings show that companies increase their social responsibility efforts after events of misconduct in their networks, particularly when companies come from home countries with strict social responsibility regulations. Additionally, companies respond differently to misconduct involving suppliers compared to misconduct involving subsidiaries, adjusting their internal and external social responsibility practices accordingly.
In summary, this thesis sheds light on the challenges multinational companies face in today's global political and social environment and offers insights into the strategies they can use to overcome these obstacles to succeed on the world stage.
LI, CHENG, "Essays on Multinational Nonmarket Strategy" (2023). Electronic Thesis and Dissertation Repository. 9335.
Available for download on Wednesday, December 31, 2025