Theoretical Framework for Multinational Corporate Governance

Multinational corporate governance expands the boundaries of corporate governance. Relevant theoretical research is still in its early stages, and an appropriate theoretical framework is yet to be established. As the globalisation of Chinese companies deepens, there is a need to establish a scientific theoretical model to help MNEs tackle multinational governance issues and expand the corporate governance theories. Therefore, in this chapter, we introduce the theories related to multinational corporate governance studies before discussing the basic theoretical framework for multinational corporate governance. We also review the development and evolution of MNE studies and extract five research orientations from the literature, covering the relationship between institutional distance and multinational corporate governance, governance of parent companies and subsidiaries, governance of parent-subsidiary relationships, and network governance of multinational business groups. We conclude by presenting a theoretical framework for multinational corporate governance consisting of stakeholder theory, institutional design theory, decision-making theory, network theory, and governance culture theory.