Peripheral-based subsidiaries and financial and non-financial performance: Evidence from an emerging market

Abstract

The study aims to explore the mechanisms by which peripheral-based subsidiaries not only enhance financial and non-financial performance (i.e., business performance) but also contribute to creating value for Multinational Enterprises (MNEs). Consequently, this research assesses how Corporate Social Responsibility (CSR) drives Absorptive Capability (AC) and Knowledge Ecosystems (KE), ultimately leading to Business Performance (BP). The present framework integrates Relational Strategy (RS) to examine whether it moderates the link between CSR and KE. Using a database of MNE subsidiaries in Vietnam, this study applies a Partial Least Square approach to Structural Equation Modeling. Our research highlights a significantly positive relationship between CSR and AC, KE, and BP. This result suggests that the better CSR is implemented, the higher the AC, the stronger the KE, and, finally, the better the BP. Additionally, the results confirm that RS moderates the influence of CSR on KE. This finding implies that the impact of CSR on KE varies depending on the extent of RS. Overall, this study contributes to bridging the current gap in International Business literature where little attention has been paid to periphery–core relations concerning knowledge interactions.