How Pressure from Home Works Out Abroad: A Micro-Level Analysis of Labor Practices in MNE Subsidiaries

Responding to calls for insight into tangible social outcomes of firms’ international activities, this article examines whether and, if so, how home-country institutional pressure (stemming from the media, non-governmental organizations, labor laws and policies, and national social consciousness) on Multinational Enterprises (MNEs) relates to the quality of labor practices in MNE subsidiaries. Our analysis of unique international micro-level data of employees in foreign-owned MNE subsidiaries—controlled for individual, firm, industry and distance variables—shows that, contrary to stakeholders’ intent and expectations, home-country institutional pressures may have an adverse effect on MNEs’ adoption of higher-quality labor practices abroad, but that the levels at which the focal effects become negative vary considerably by specific working conditions and the type of pressure at home. These findings indicate the need to disentangle contextual contingencies and consider multi-faceted interplays between home-country institutions and particular labor practices.