MNEs' capabilities and their sustainable business in emerging markets: Evidence from MNE subsidiaries in China

Abstract

This study aims to identify the causal relationship between innovation ambidexterity and multinational enterprises' (MNEs) sustainable performance. It emphasizes how innovation ambidexterity driven by dynamic capabilities can allow MNE subsidiaries to achieve social and environmental performances. Additionally, we asserted the moderating impacts of host governments' pressures on the association between dynamic capability and innovation ambidexterity. We evaluated our hypotheses using a dataset consisting of 228 MNE manufacturing subsidiaries in China using partial least square-structural equation modeling. Utilizing dynamic capability and ambidexterity theories, our research contributes to the ongoing sustainable performance literature by addressing a growing call to understand how MNE subsidiaries may achieve long-term sustainability when conducting business abroad.