Title of Dissertation: national renewable energy policy

Academy of Management 
Review
33, no. 4 (2008): 994-1006.
74
Heidenreich, Martin. "The social embeddedness of multinational companies: a 
literature review." 
Socio-Economic Review
(2012): 549-579.
75
Kostova, Tatiana, Kendall Roth, and M. Tina Dacin. "Institutional theory in the study 
of multinational corporations: A critique and new directions." 
Academy of Management 
Review
33, no. 4 (2008): 994-1006.

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50 
organizations.
76
In this vein, isomorphism does not help MNCs to be legitimate. MNCs 
become less homogeneous under the activities for legitimacy. 
Focusing on the active agency of MNCs, Cantwell, Dunning, and Lundan suggest 
a framework for the co-evolution of MNCs and institutions.
77
They argue that new 
institutions are necessary to reduce the rising importance of “non-ergodic” uncertainty. 
According to North, the newly created institutions for reducing uncertainty of physical 
environment have generated a new set of uncertainties in human environment, although 
they reduce uncertainty of physical environment.
78
For instance, the development of 
technologies has enhanced the well-being in many countries, it has generated different 
types of uncertainty by global interconnectedness. Under this new set of uncertainties, it 
is not possible to predict future based on the past. In this vein, optimal institutions are 
difficult to be lasted as environmental changes over time make those institutions be far 
from optimal. Therefore, the uncertainties that firms face now are different from those 
they faced in the past 
According to Cantwell and colleagues, firms’ response can be categorized into 
three: 
institutional avoidance, institutional adaptation, and institutional co-evolution
. 
Institutional avoidance
is that MNCs select between given institutional environments. 
For instance, under weak institutions and poor regulations, a firm can decide to exit. The 
second type, 
institutional adaptation
, is to adjust the MNCs’ structure to fit with 
76
Riaz, Suhaib. "The global financial crisis: an institutional theory analysis." 
Critical 
Perspectives on International Business
5, no. 1/2 (2009): 26-35. 
77
Cantwell, J., Dunning, J. H., & Lundan, S. M. “An evolutionary approach to 
understanding international business activity: The co-evolution of MNEs and the 
institutional environment.” 
Journal of International Business Studies
, 41 (2010), 567–
586. 
78
North, Douglass C. 
Understanding the process of economic change
. (New Delhi: 
Academic Foundation, 2006).

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51 
institutional environments. In the third type of 
institutional co-evolution
, firms affect 
institutional environments. Co-evolution includes various efforts of firms such as 
transmission of home-country practices into other subsidiaries, and affecting institutional 
changes at the national, and supra-national levels. Under non-ergodic uncertainty, co-
evolution is more likely than adaptation or avoidance. As it is impossible to predict future 
based on the past trends, diverse experimentation is the way to address the uncertainty 
that firms face. In this sense, Cantwell and colleagues suggest that MNCs evolve more 
locally responsive, yet internationally connected governance structures.
Although co-evolution is a promising concept to explain the mechanism of 
institutional change by MNCs, the concept needs to be elaborated, as there are many 
unanswered questions such as which institutional environments MNCs change. In this 
sense, an empirical study showing the pattern of co-evolution is expected to contribute to 
elaborate it. Among the unanswered questions on co-evolution, this research focuses on 
the MNCs’ effect on national policies. In line with the literature on co-evolution, 
Proposition 1 is suggested:
Proposition 1. Multinational renewable energy corporations are more likely to engage in 
policymaking for favorable policies under the challenges of the global market.