Overseas corporate social responsibility engagement and competitive neutrality of government subsidies: Evidence from multinational enterprises in emerging markets

This study discusses competitive neutrality issues in light of government subsidies. We examine whether the engagement in overseas corporate social responsibility practices affect the ability of private multinational enterprises in emerging markets in order to compete with state-owned multinational enterprises for government subsidies. Using a sample of Chinese multinational enterprises operating between 2008 and 2018, our results indicate that the competitive advantage of state-owned multinational enterprises in obtaining government subsidies is offset when private multinational enterprises actively engage in overseas corporate social responsibility practices. Furthermore, institutional distance and the expectations set by the home country as they relate to sustainable development significantly affects the ability of multinational enterprises to receive subsidies.