Why are multinational enterprises (MNEs) likely to adopt higher CSR standards than local firms?

Multinational enterprises (MNEs) are likely to adopt higher corporate social responsibility (CSR) standards primarily because they are more closely monitored by stakeholders. MNEs tend to engage in business practices that are under significant scrutiny from various stakeholders, including consumers, investors, governments, and non-governmental organizations across different countries. These stakeholders often have higher expectations regarding ethical practices, sustainability, and social impacts, pushing MNEs to adhere to stricter CSR standards to maintain a positive reputation and secure their market position.

Additionally, the global nature of MNEs means they operate in diverse regulatory landscapes, which may impose varying CSR requirements. Their commitment to higher CSR standards is also influenced by the need to build trust and goodwill in the communities where they operate, which can be critical for their long-term success and competitiveness.

The other options do not address the fundamental reasons for the heightened CSR standards in MNEs effectively. For instance, while affluent regions may have higher disposable income and thus more consumer demands, it isn't the primary factor driving CSR standards. Employing more local workers reflects operational strategies but does not inherently elevate CSR expectations. Similarly, having fewer legal obligations contradicts the reality that MNEs often face stricter regulations and compliance requirements than local firms