An Evolutionary Game Analysis of CSR Governance in Multinational Enterprises Under External Stakeholder Monitoring

In the context of economic globalization, robust corporate social responsibility (CSR) serves as a critical source of legitimacy and competitive advantage for multinational enterprises (MNEs). However, institutional and competitive disparities between host and home countries frequently lead overseas subsidiaries of MNEs to deviate from parent company standards by substituting symbolic for substantive CSR practices and thereby creating potential threats to MNEs’ group-wide reputation. Although external stakeholder monitoring is widely recognized, most studies adopt static, dyadic perspectives and thus rarely examine the dynamic interplay between external monitoring and MNEs’ CSR governance. To address this gap, this study constructs a tripartite evolutionary game model involving the parent company, overseas subsidiaries, and external stakeholders, systematically analyzes the evolutionary pathways and the stability of their strategic interactions and uses numerical simulations to identify the conditions for system equilibriums and the influence of key parameters. The findings demonstrate that moderate incentives and penalties from the parent company and active monitoring by external stakeholders significantly promote overseas subsidiaries’ adoption of substantive CSR. This equilibrium becomes more stable when the benefits of substantive CSR increase or its costs decrease for overseas subsidiaries. However, excessive incentive expenditures may weaken the parent company’s willingness to implement strict supervision. Furthermore, information synergies and collaborative governance between the parent company and external stakeholders reduce cross-border supervision and coordination costs, thereby increasing the likelihood of an equilibrium with strict supervision and substantive CSR. By moving beyond conventional static and binary analytical frameworks, this study proposes governance pathways, including optimizing incentive mechanisms, strengthening external stakeholder monitoring, and fostering information synergies, thereby offering new theoretical perspectives and managerial implications for understanding the evolution of CSR behavior in MNEs.