Taking a socially proactive stance that aligns to their economic imperatives has led multinational corporations (MNCs) to focus on social innovation that tackles environmental challenges (or eco-innovation hereafter). Their knowledge of eco-innovation is important to emerging markets that are facing severe environmental challenges and to emerging market firms (EMFs) whose eco-innovation activities face resource and knowledge constraints. MNCs, through their foreign direct investment (FDI) activities in host emerging markets, can divulge economic, knowledge and environmental values of eco-innovation, helping EMFs to improve their eco-innovation through knowledge spillover channels. Taking the value-based approach, we draw on the eco-innovation research and the MNC/FDI spillovers literature to develop hypotheses on the relationship between regional knowledge spillovers of MNCs and the eco-innovation of EMFs in a multi-dimensional task environment characterized by munificence, complexity and dynamism. Our empirical examination is based on a sample of Chinese manufacturing firms during the period of 2003-2013. We find support to hypotheses that regional knowledge spillovers of MNCs enhance the positive effects of munificence and mitigate the negative effects of complexity and dynamism on the eco-innovation of EMFs.
|Management International Review
|Accepted/In press - 17 Jan 2024