Multinational enterprises and disadvantaged communities in emerging markets: A review and theoretical framework

Abstract

Multinational enterprises (MNEs) face growing pressures from stakeholders to address global challenges and alleviate inequalities endured by disadvantaged communities in the regions where they operate. Given the fragmented conceptual approaches to understanding the relationships between MNEs and these communities, the complex mechanisms underpinning these interactions remain underexplored. This study seeks to uncover existing knowledge in the management literature and supplement it with work from closely related fields—including economics, area studies and development studies—to consolidate current knowledge and gain a broader understanding of how MNEs interact with these communities. We explore the actions, mechanisms and strategies MNEs use to interact with these communities in emerging markets and how they may contribute to integrating disadvantaged communities into the socio‐economic ecosystem. Understanding how MNEs and communities interact is important since MNEs can help address several SDG‐related issues pertinent to these communities, such as poverty and inequality. To achieve our research objective, we conduct a semi‐systematic literature review of 119 carefully identified papers. Our findings reveal the array of actions employed by MNEs to facilitate interactions with communities. Such actions, which often involve multi‐stakeholder partnerships, are shown to promote MNEs’ accountability and social legitimacy in the local environment, leading to various relational benefits. Our study advances theoretical knowledge by synthesising current findings in the management and closely related literature on the interactions between MNEs and disadvantaged communities, offering a novel integrative conceptual model of MNE–community interactions and advancing recommendations for future research.