From institutional distance to development outcomes: responsible agricultural investment and legitimacy in Africa

Abstract

Overseas agricultural investment plays a crucial role in ensuring food security and accelerating the construction of agricultural powerhouses. Agricultural multinational enterprises (AMNEs) from emerging markets face significant challenges due to institutional distance in host countries, especially in African countries. A key concern in both theory and practice is how to address legitimacy pressures and achieve synergy between commercial and social value through responsible investment. Drawing on institutional theory and corporate social responsibility theory, this paper develops an analytical framework of “institutional distance–embedded responsibility–legitimacy acquisition.” Using the China National Agricultural Development Group (CADG) as the case study—specifically its sisal planting and processing project in Tanzania and its Agricultural Technology Demonstration Center project in Benin—the study examines the mechanisms and effects of responsible investment. The results show that the institutional distance faced by agricultural multinational enterprises is multidimensional and contextually embedded, particularly regarding land tenure systems and smallholder cognitive frames. Through a three-tier progressive strategy of “production embeddedness–community embeddedness–development embeddedness,” enterprises respond to regulatory, normative, and cognitive institutional pressures respectively, thereby obtaining legitimacy for their operations in the host country. Beyond legitimacy acquisition, the responsible investment model generates measurable development outcomes, including enhanced food availability, improved household income and food access, livelihood diversification through intercropping, and progressive gender inclusion. However, the translation of production gains into improved nutrition and dietary diversity is not automatic, and distributional challenges—including potential elite capture—warrant critical attention. The sustainability of responsible investment is constrained by the degree of coupling between corporate resource capabilities and the host country’s institutional environment, with land governance and financial viability posing persistent challenges. This study deepens the understanding of responsible investment in the internationalization of agricultural enterprises and provides theoretical insights and practical implications for agricultural foreign investment from emerging market countries.

1 Introduction

Since the 21st century, the reconstruction of the global agricultural value chain and food security issues has become increasingly prominent. As a responsible major country, China has actively participated in global food security governance and continued to expand its agricultural overseas investment. According to the Ministry of Agriculture and Rural Affairs, China’s outbound investment in agriculture grew from less than US $3 billion in 2010 to more than US $20 billion in 2023, covering over 100 countries and regions worldwide. By providing agricultural aid, China not only helps recipient countries improve their agricultural production capacity but also promotes the sustainable development of global food security (Wang et al., 2025a; Zhong et al., 2025). However, the unique characteristics of agricultural investment, such as land dependence, sensitivity to natural risks, and community relevance, make agricultural multinational enterprises face far greater challenges than those in other industries. When investing in developing countries with distinct institutional environments, agricultural multinationals encounter significant legitimacy pressures arising from institutional distance (Xiao et al., 2024). According to institutional theory, such distance—manifested in regulatory, normative, and cognitive dimensions—poses a core obstacle to legitimacy acquisition (Kostova and Zaheer, 1999). For agricultural multinational enterprises, this challenge is particularly pronounced. Land ownership arrangements—whether leasehold, customary, or private—directly determine the scale and security of operations. Regulations concerning foreign investment access, community relationship management, and traditional farming perceptions are intertwined, making agricultural investment deeply embedded in the institutional context of host countries (Zhang, 2022). Furthermore, the link between investment and local food security is not automatic; it requires deliberate strategies to ensure that productivity gains translate into improved household access and resilience. Existing studies have accumulated systematic knowledge on risk identification, type classification, and regional comparison of overseas agricultural investment (Wang et al., 2025b; Yan et al., 2024); however, they have paid insufficient attention to a core issue: how can agricultural multinational enterprises resolve the legitimacy pressures brought by institutional distance and achieve sustainable overseas operations through proactive strategic responses?

Corporate social responsibility theory provides an important perspective for understanding this issue. Studies have shown that multinational enterprises that actively engage in social responsibility can help improve organizational reputation (Aguilera et al., 2015), obtain social legitimacy (Xia et al., 2025), and reduce the liability of foreignness. The Principles for Responsible Investment in Agriculture and Food Systems, proposed by the Food and Agriculture Organization of the United Nations and other international institutions, further introduce the concept of responsible investment into the agricultural field, emphasizing that agricultural investment should respect land tenure, ensure food security, and promote inclusive development. However, existing research mostly remains at the level of phenomenon description and lacks an institutional explanation of how responsible investment strategies can address the pressures of institutional distance: through which paths do enterprises respond to different dimensions of institutional pressure? What is the relationship between these paths? What factors constrain their effectiveness? The answers to these questions are not only related to the practical needs of Chinese enterprises “going global” but also relevant to the dialogue and expansion of international business theory in the context of emerging markets. To address this gap, this study constructs an analytical framework of “institutional distance–embedded responsibility–legitimacy” and selects two overseas investment projects of CADG in Tanzania and Benin as a double case study, aiming to reveal the pathways, mechanisms, and boundary conditions through which responsible investment strategies mitigate institutional pressures. Specifically, we deepen the analysis beyond firm strategy to examine the development outcomes on land rights, smallholder livelihoods, and food availability. Critically, we distinguish between food insecurity and poverty: while increased agricultural production and income contribute to food security, they do not automatically translate into improved dietary diversity, nutrition, or stable access to food, particularly for vulnerable groups. The paper adopts the FAO’s multidimensional food security framework encompassing availability, access, utilization, and stability to structure the assessment of development outcomes.

Based on institutional theory and corporate social responsibility theory, this paper develops an analytical framework of “institutional distance–embedded responsibility–legitimacy” and takes two overseas investment projects of the China National Agricultural Development Group (CADG) in Tanzania and Benin as a double case study, attempting to answer the following core questions: Facing the complex institutional environment of host countries, how can agricultural multinational enterprises address the pressure of institutional distance and achieve sustainable international development through responsible investment strategies? Specifically, what type of responsible investment model has emerged from CADG’s practices in Tanzania and Benin? How do these models respond to the challenges of institutional distance from the three dimensions of regulation, norm, and cognition? What factors constrain the sustainability of responsible investment? This study selects CADG as a case study based on the following considerations: (1) Typicality. As the only central enterprise focused on agriculture under the management of the State-owned Assets Supervision and Administration Commission of the State Council, CADG is a pioneer of China’s agricultural “going global” initiative and has engaged in diversified investments in more than 30 countries and regions across Africa, Asia, and the South Pacific. (2) Differences. There are significant differences in investment patterns between the Tanzania sisal planting and processing project (a commercial planting project) and the Benin Agricultural Technology Demonstration Center project (a technical assistance transformation project). These differences help reveal the commonalities and characteristics of responsible investment strategies in various institutional contexts and support the comparative replication approach of theoretical sampling. (3) Data availability. Both projects are supported by abundant public materials and academic literature, facilitating in-depth case analysis and theoretical construction.

The theoretical contributions of this paper are mainly reflected in two aspects: (1) We introduce institutional distance theory into the research on the internationalization of agricultural enterprises, build an analytical framework of “institutional distance–embedded responsibility–legitimacy,” reveal the unique institutional challenges faced by agricultural multinational enterprises and their active response strategies, and expand the application boundary of institutional theory in the field of agriculture. (2) We refine the three-layer progressive responsible investment mechanism of “production embeddedness–community embeddedness–development embeddedness,” clarify the action paths of the three layers of embeddedness in response to regulatory, normative, and cognitive institutional pressures respectively, and illustrate their progressive relationship and synergistic effect, thereby deepening the understanding of the connotation of responsible investment.

2 Literature review and theoretical framework

2.1 Literature review

2.1.1 The development process of CSR from ethical appeal to strategic embeddedness

The conceptual genealogy and theoretical evolution of Corporate Social Responsibility (CSR) have always been significant issues in the field of international business and strategic management. The discussion on CSR can be traced back to the early 20th century. Sheldon (2003) put forward the core idea of social responsibility in his book The Philosophy of Management, emphasizing that social interests should take precedence over corporate profits, which laid the philosophical foundation for subsequent research. It is widely believed that Bowen’s Social Responsibility of the Businessman, published in 1953, marks the starting point of modern academic research on corporate social responsibility. In this work, Bowen (1953) proposed that enterprises should make decisions and conduct business activities according to the goals and values of society, establishing the basic framework for the contractual relationship between enterprises and society.

Based on this theoretical foundation, scholars at home and abroad have continued to deepen and expand the connotation of social responsibility. At present, domestic scholars generally agree that while pursuing the maximization of shareholders’ interests, enterprises should also undertake social responsibilities that extend beyond the economic scope, covering multiple dimensions such as the protection of employees’ rights, the protection of creditors’ interests, the protection of consumers’ rights, the coordination of community relations, environmental protection, and social welfare (Nuseir et al., 2026; Su and Ding, 2026; Dash and Sahoo, 2026; Dadon et al., 2026). In the field of segmentation, relevant research has been analyzed from the concept and code of conduct of corporate social responsibility: (1) Corporate operations need to have a positive impact on stakeholder groups and the natural environment (Briscese et al., 2021; Roh et al., 2025; Tao, 2026). (2) While pursuing economic benefits, enterprises should be committed to maximizing the comprehensive value of economy, society, and environment (Wang et al., 2023). (3) Corporate behaviors should adhere to the laws and regulations, social norms, and business ethics of the host country (Amos, 2018; Khojastehpour and Jamali, 2020; Harrison et al., 2020; Meng et al., 2026). (4) Corporate strategies should achieve dynamic coordination and co-evolution with the sustainable development goals of society (Gallardo-Vázquez et al., 2024; Noonin and Phuangprayong, 2025; Abbas et al., 2026; Chen et al., 2026).

From the theoretical perspective of multinational operations, fulfilling social responsibility has become a mandatory strategic option for emerging market multinational enterprises (EMNEs) to build international competitive advantage and achieve sustainable development. Institutional theory and legitimacy theory provide an important analytical framework for this. According to relevant research, multinational enterprises actively engage in social responsibility, such as corporate social responsibility, which can effectively improve organizational reputation through a signaling mechanism, and then translate into differentiated competitive advantages and long-term economic returns (Aguilera et al., 2017; Abugre and Anlesinya, 2019). In host countries, especially in emerging economies with complex institutional environments, CSR practices help enterprises gain social legitimacy and reduce the liability of foreignness, thereby promoting the smooth implementation of international expansion (Xu et al., 2018). It is evident that social responsibility is not only related to ethical practices but also serves as a key strategic tool for multinational enterprises to cope with institutional complexity and embed themselves within the social structure of host countries.

2.1.2 Institutional distance and legitimacy of multinational enterprises

Institutional theory emphasizes that the survival and development of an organization depend on the legitimacy support of its institutional environment (DiMaggio and Powell, 1983). Scott (1995) divided institutions into three dimensions: the regulatory dimension, which emphasizes the restraining effect of laws and rules; the normative dimension, which focuses on the guiding role of values and behavioral norms; and the cognitive–cultural dimension, which involves the constructive role of shared beliefs and cognitive frameworks. The differences between the home country and the host country in these three dimensions constitute institutional distance, which becomes a core obstacle to the acquisition of legitimacy (Kostova and Zaheer, 1999). The greater the institutional distance, the more legitimacy pressure multinational enterprises face, necessitating the adoption of localization strategies (Xu and Shenkar, 2002). For agricultural multinational enterprises, the impact of institutional distance is particularly prominent (Zhang, 2022). (1) Agricultural investment involves sensitive factors such as land and water resources, and host countries often impose strict legal regulations on land access, usage modes, and income distribution related to foreign investment. (2) Agricultural projects are deeply embedded in local communities. The relationship between enterprises and communities and the degree of respect for local customs by enterprises directly affect the normative legitimacy of operations. (3) Agricultural investment is often accompanied by technology transfer and production mode reform. Forming a positive interaction with the traditional beliefs of farmers in the host country is key to establishing cognitive legitimacy.

2.1.3 The development process of responsible investment from principle advocacy to mechanism exploration

CSR theory has undergone a paradigm shift from shareholder primacy to stakeholder primacy. With the rise of international initiatives such as the UN Global Compact and the Principles for Responsible Investment, CSR has evolved from voluntary philanthropy to a systemic strategy. Responsible investment emphasizes that while pursuing economic returns, companies should incorporate environmental, social, and governance (ESG) factors into investment decisions and operational management to achieve the collaborative creation of economic and social value. In the context of multinational operations, responsible investment holds particular strategic significance. On one hand, responsible practices help enterprises obtain the “social license” of the host country and reduce the legitimacy risk caused by institutional distance (Gifford et al., 2010). On the other hand, responsible investment is also a process of institutional entrepreneurship. By actively engaging with the host country’s institutional environment and participating in the local development agenda, enterprises gradually shape the institutional conditions that are conducive to their operations (Mair and Marti, 2009). Research on responsible investment in agriculture has gradually emerged in recent years. The UN Food and Agriculture Organization and other international agencies have formulated the Principles for Responsible Investment in Agriculture and Food Systems, emphasizing that investment in agriculture should respect land tenure, ensure food security, and promote inclusive development. Li et al. (2022) conducted a preliminary review of the responsible investment practices of Chinese agricultural enterprises in Africa, noting that cross-cultural management, social responsibility planning, and public welfare participation are effective means to address institutional challenges. However, existing research mostly focuses on describing phenomena and advocating policies, and lacking an institutional explanation of how responsible investment strategies can mitigate the pressures of institutional distance. In what ways do enterprises respond to different dimensions of institutional pressure? How are these paths interconnected? What factors constrain their effectiveness?

2.1.4 Particularity of the internationalization of agricultural enterprises

Compared with other industries, the internationalization of agricultural enterprises has the following characteristics: (1) strong dependence on resources. Agricultural investment is highly dependent on land, water, and other natural resources, and the availability and use of these resources are deeply affected by the institutional arrangements of host countries. The lack of a clear land ownership system, an underdeveloped land market, and limited terms of land use rights all contribute to the uncertainty in agricultural investment (Yang, 2025). (2) Agricultural production often requires a long-term cooperative relationship with local farmers, and the business performance of enterprises is closely related to the quality of community relations. Agricultural investment involves not only the allocation of production factors but also the introduction of production methods and the interaction of lifestyles, which exhibit significant social embeddedness (Lu et al., 2020). (3) High requirements for technical adaptability. Agricultural technology has significant context dependence, and mature technology from the home country may need to be adjusted to align with the natural conditions of the host country, such as climate, soil, hydrology, and social culture, including farming traditions and dietary habits. This adjustment requires long-term experimentation, learning, and iteration (Li et al., 2022). (4) Political sensitivity is prominent. Food security is a core concern for all countries, and agricultural investment can raise host countries’ concerns about land grabbing, food sovereignty, and neo-colonialism (Hallam, 2011), making it highly politically sensitive. These particularities indicate that agricultural multinational enterprises cannot simply replicate the internationalization path of the manufacturing industry; they must explore localization strategies that align with the characteristics of the industry. The concept of responsible investment aligns closely with the internal requirements of agricultural internationalization. Only when agricultural enterprises are genuinely embedded in the host society and form a symbiotic relationship with local stakeholders can they achieve sustainable overseas development. Crucially, the issue of land tenure security remains a fundamental source of risk and legitimacy pressure. In many African host countries, overlapping customary and statutory land rights create ambiguity, which can lead to conflicts between investors and local communities if not managed with transparency and inclusivity.

2.1.5 Risk analysis of agricultural enterprises’ overseas investment from the perspective of uniform distance

Overseas agricultural investment risk research has developed into an important academic topic in the field of international business and agricultural economic management. The accumulation of relevant achievements is increasingly rich, and the research system is gradually maturing. Since the Chinese government clearly put forward the strategy of “going global” in agriculture in 2006, the scale of overseas agricultural investment has continued to expand, attracting extensive attention and research investment from domestic academic circles. From the perspective of time distribution, relevant research has mainly concentrated in the past two decades, showing clear characteristics of being problem-oriented and policy-driven. Regarding research dimensions, domestic scholars have systematically explored the causal logic of overseas agricultural investment risks (He and Wu, 2025), risk type analysis and identification (Zhu and Wang, 2022), regional risk assessment (Yu et al., 2019; Yan et al., 2024), risk-seeking characteristics of investors (Gao et al., 2020; He et al., 2023), and risk prevention mechanisms (Liu et al., 2018; Wei et al., 2024). Internationally, scholars’ research on overseas agricultural investment risk primarily focuses on political risk, market fluctuations, institutional defects, environmental and social impacts, and other dimensions. Early studies largely conducted theoretical transfers based on empirical evidence from the energy industry (Lu et al., 2023; Tan and Keiding, 2024; Zhang et al., 2024; Kang et al., 2021). Although some studies explicitly focus on the agricultural sector, their analyses primarily focus on the risks and challenges faced by specific fields such as overseas farmland investment (Ayelazuno, 2019) and agricultural aid (Zhong et al., 2025). Research on the systemic risks of investment across the entire agricultural industry chain is relatively insufficient. Studies by the FAO and other international organizations indicate that agricultural investment in developing countries can yield a wide range of development benefits, but the realization of these benefits is not automatic, and specific forms of investment may pose potential risks to the host country.

From the perspective of specific risk dimensions, the existing research has formed a relatively complete typological framework. At the level of political risk, government intervention by the host country (Liu et al., 2024) and political instability are generally regarded as core challenges faced by agricultural investment. Research from the perspective of institutional theory further reveals that the impact of political risk on investment is situation-dependent, and a strong BIT system can help alleviate the negative effects of political risk (Zhang, 2022). At the level of market risk, agricultural price fluctuations (Liu, 2018) and exchange rate changes are directly related to the level of investment returns (Cao et al., 2025), while emerging economies are more vulnerable to such external shocks due to the fragility of their economic structures (Glebocki and Saha, 2024; Keubeng et al., 2025). At the level of institutional risk, a weak legal environment and land ownership disputes significantly increase the uncertainty of investment. However, empirical studies also reveal a seemingly paradoxical phenomenon: some investors prefer regions with imperfect institutions to reduce compliance costs. Based on the panel data of 85 countries and regions from 2006 to 2018, Yan et al. (2024) found that the political risk of the host country has a positive impact on China’s agricultural foreign investment, challenging the expectations of traditional institutional theory and possibly reflecting the unique competitive advantage of Chinese enterprises in high-risk regions. In terms of environmental and social risks, large-scale agricultural investment may lead to ecological damage and social conflicts, especially in countries with unclear land ownership, which can lead to neocolonial disputes (Hallam, 2011). He and Wu (2025) pointed out that the risk spectrum of China’s foreign agricultural investment is undergoing dynamic evolution: From a lack of international investment experience and capital liquidity risk in the early stage to the dilemma of industrial chain integration and localization management challenges in the middle stage, it may develop into vicious trade barriers and growth trap risks in the later stage, and may gradually develop into negative public opinion, capital crowding out, and environmental sustainability pressures in the future.

In general, research on overseas agricultural investment risk has formed a relatively systematic knowledge base and has made remarkable progress in risk identification, type classification, regional comparison, and other aspects. The case study further reveals that the choice of investment mode significantly affects the level of risk, and localization strategies and benefit-sharing mechanisms can mitigate the negative effects of investment to a certain extent [31]. These studies have laid a crucial theoretical foundation for responsible overseas agricultural investment.

2.1.6 Literature gap

Based on the five previous chapters, the following research gaps can be identified: (1) the application of institutional distance theory in agriculture needs to be deepened. Existing research on institutional distance mainly focuses on manufacturing and service industries, but insufficient attention has been given to the specifics of agricultural investment, and there is a lack of a systematic analysis framework for the institutional challenges faced by agricultural multinational enterprises. (2) The theoretical relationship between responsible investment and institutional distance has not yet been established. Research on responsible investment mainly starts from the perspective of ethical norms and policy advocacy, but lacks in-depth dialogue with institutional theory. Although institutional distance research reveals the source of legitimacy pressure, it does not adequately address the active response strategies of enterprises. There is potential for theoretical integration between the two. (3) Research on the internationalization of agricultural enterprises lacks an institutional explanation. Existing studies mostly focus on risk identification and type classification, and do not provide in-depth mechanism analysis on “how” enterprises respond to institutional challenges and “why” some strategies are more effective. This paper aims to fill the above gaps. By integrating institutional theory and corporate social responsibility theory, this paper constructs an analytical framework of “institutional distance–embedded responsibility–legitimacy,” and reveals the action mechanisms of agricultural multinational enterprises in addressing the pressure of institutional distance through hierarchical embedding strategies, using a double case study of CADG.

2.2 Theoretical framework

Based on the above literature, this paper constructs a theoretical analysis framework of “institutional distance–embedded duty–legitimacy” (Table 1). The core proposition of this framework is that agricultural multinational enterprises face institutional distance pressure from three dimensions: regulation, norm, and cognition. Enterprises need to respond through a three-level progressive responsible investment strategy of “production–community–development.” The three layers of embeddedness correspond to the three dimensions of institutional distance, helping enterprises obtain regulatory legitimacy, normative legitimacy, and cognitive legitimacy. The sustainability of responsible investment is limited by the degree of coupling between the enterprise’s resource capability and the institutional environment of the host country. Production embeddedness means that enterprises obtain regulatory legitimacy by complying with host country laws and regulations, adapting to local production conditions, and integrating into the local industrial system. Community embeddedness means that enterprises gain regulatory legitimacy by respecting local culture, hiring local employees, and participating in community welfare. Development embeddedness means that enterprises promote the host country’s independent development capacity and obtain cognitive legitimacy through technology empowerment, capacity building, and the integration of development concepts. There is a progressive relationship among the three levels of embeddedness: production embeddedness is the foundation, community embeddedness is the key, and development embeddedness is the ultimate goal.

Production embeddedness refers to the strategy of enterprises to obtain regulatory legitimacy by complying with the laws and regulations of the host country, adapting to local production conditions, and integrating into the local industrial system. The core mechanisms of production embeddedness include (1) compliance operation. Enterprises must strictly adhere to the host country’s foreign investment access, land use, industry supervision, and other legal requirements. (2) Technology adaptation. Enterprises need to adjust production technology in real time based on the natural conditions and social culture of the host country to achieve technology localization. (3) Industrial integration. Overseas investment enterprises must form connections with the upstream and downstream segments of the host country’s industrial chain and embed themselves into the local industrial system.

Community embeddedness refers to the strategy that enterprises employ to respond to the normative expectations of the host society and obtain normative legitimacy by respecting local culture, hiring local employees, participating in community welfare, and protecting the rights and interests of employees. The core mechanisms of community embeddedness include (1) job creation—providing employment opportunities for local communities to improve people’s livelihoods; (2) service supply—offering community services such as medical care and education to meet basic needs; (3) cultural respect—respecting local customs and cultural traditions to avoid cultural conflicts; and (4) giving back to public welfare—engaging in community public welfare initiatives to demonstrate corporate citizenship.

Development embeddedness refers to the strategy whereby enterprises promote the host country’s independent development capacity and obtain cognitive legitimacy through technology empowerment, capacity building, and development concept integration. The core mechanisms of development embeddedness include: (1) technology transfer. Enterprises need to introduce advanced and applicable technologies to the host country to enhance agricultural production efficiency. (2) Capacity building. Enterprises must train local employees and farmers while cultivating local technical and management talent. (3) Dialogue on ideas. Enterprises should engage in dialogue with stakeholders in the host country regarding development concepts to achieve the adaptation and integration of cognitive frameworks. (4) Institutional entrepreneurship. To participate in the process of institutional improvement in host countries, enterprises need to help shape an institutional environment conducive to sustainable development.

3 Basic overview of CADG

3.1 Development history and business segments of the enterprise

The China National Agricultural Development Group (CADG) was established in October 2004 by the merger of nine former state-owned enterprises directly under the Ministry of Agriculture, including the former China Agricultural Reclamation Group Corporation and China Fisheries Group Corporation. CADG is directly managed by the state-owned Assets Supervision and Administration Commission of the State Council and is the only comprehensive central agricultural enterprise under its administration. After years of reform and development, CADG has formed five business segments: (1) the fishery sector focusing on deep-sea fishing, aquatic product processing, and fishery services; (2) the animal husbandry sector focusing on animal health products, animal nutrition products, breeding animals and poultry, animal husbandry inputs, and the production of beef, mutton, dairy products, and bee products; (3) the planting sector focusing on crop seeds; (4) the agricultural machinery and engineering sector focusing on agricultural machinery, ship machinery, new energy machinery, and port and channel construction; (5) the asset management and trade sector focusing on asset management and agricultural international trade.

3.2 History and strategic layout of overseas investment

CADG has played a leading role in China’s agricultural “going global.” In the planting sector, the Group has acquired land development rights in Africa, South America, Southeast Asia, Eastern Europe, and other regions, focusing on planting, supplemented by appropriate animal husbandry, mainly planting wheat, corn, soybean, sorghum, sisal, alfalfa grass, and Sudan grass. Using state foreign aid funds and channels, the Group selects a number of mature, advanced, and applicable technologies in the fields of breeding stock, planting, and processing of agricultural products for transfer and promotion to cooperative countries. It dispatches relevant scientific and technological experts to these countries for various forms of technical services and demonstrations and provides various forms of technical training to the scientific and technological personnel of the cooperative countries. In pelagic fishery, CADG is the pioneer and main force of China’s pelagic fishery. On 10 March 1985, the China National Fisheries Union Corporation sent the first batch of deep-sea fishing fleets to West Africa, marking a new era in the development of China’s deep-sea fishing industry. At present, the group has the largest fishing fleet in China, with nearly 400 fishing vessels, more than 10,000 employees, and annual fishing of more than 200,000 tons of fish cargo. The number of fishing vessels, total fishing volume, and output value, respectively, account for 21, 30, and 25% of the country, ranking first in the domestic deep-sea fishery. Overall, the Agriculture Development Group maintains economic and trade exchanges with more than 80 countries worldwide and has established a base in more than 40 countries or branches. In Africa, the group’s investment layout is particularly extensive, involving deep-sea fishing, aquaculture, agricultural planting, animal husbandry, and other fields, forming a representative sample of agricultural internationalization practice.

3.3 Data collection and verification

The quantitative and qualitative data presented in the case studies (e.g., agricultural yield increases, employment statistics, and training figures) were obtained from multiple sources to ensure triangulation and validity. Primary data sources include official project reports submitted by CADG to the Ministry of Agriculture and Rural Affairs of China, annual operational summaries from the China–Africa Agricultural Investment Co., Ltd. (CAAC), and internal monitoring records from the Benin Agricultural Technology Demonstration Center. Secondary sources consist of publicly available materials, including Chinese government white papers on foreign agricultural aid, academic literature, and news reports from Xinhua News Agency and China Daily. Where yield data are reported (e.g., maize yield increases of 40.4 to 106.3% in Benin), these figures are derived from comparative field trials conducted by the demonstration center’s agronomists, which included control plots using local varieties and management practices. Employment statistics are based on payroll records and annual employment reports submitted to Tanzanian and Beninese labor authorities. While the available data support a robust analysis of production, employment, and institutional outcomes, several limitations should be acknowledged. First, dietary diversity, anthropometric, and nutrition indicators were not systematically collected by the projects and are therefore unavailable for this study; the analysis of food utilization and nutrition outcomes is consequently suggestive rather than definitive. Second, the selection of demonstration households in the Peya Village poverty reduction project was based on willingness to adopt new practices rather than random assignment, which introduces potential selection bias. Third, direct field interviews with local farmers were not conducted for this study. Despite these limitations, cross-referencing multiple documentary sources and findings from independent studies supports the reliability of the reported indicators.

4 Responsible investment practices of CADG in Tanzania and Benin

4.1 Sisal planting and processing project in Tanzania

4.1.1 Project background and development process

Tanzania began to transplant sisal in 1892. Due to its good quality, Tanzania has always enjoyed a high reputation in the international market, making it the main producer of high-quality sisal in the world. In 1964, the highest output reached 230,000 tons, accounting for 61% of the world’s output at that time. Since 1969, fierce competition from synthetic fibers in the international market has caused the price of sisal fiber to fall sharply, leading to a continuous decline in sisal fiber production in Tanzania. In 1983, the output of sisal fiber had dropped to 20% of the highest level in history. China Reclamation Tanzania Corporation is a wholly-owned overseas subsidiary of CADG focused on agricultural cooperation in Africa. Established in 1999, it primarily undertakes the sisal planting and processing project in Tanzania, which is part of China’s foreign aid efforts. In 2010, to integrate agricultural projects in Africa, CADG and China Africa Development Fund Co., Ltd. jointly established China–Africa Agricultural Investment (CAAC) Co., Ltd., which has become China’s largest investment and management platform for agricultural cooperation and development in Africa. Since September 2010, CAAC has been the sole holder of the entire equity interest in the sisal project in Tanzania and has managed it. After more than 20 years of development, CAAC’s operations in Tanzania have led to the establishment of two sisal farms, namely, the Generation Watts and Lu SangGa Tower farms, covering a total area of 6,900 hectares. It is the only Chinese enterprise engaged in sisal planting in Tanzania, with 32 sisal farms, making it a leader in the industry. In 2015, the project was included in the first batch of “going global” pilot projects by the Ministry of Agriculture of China.

It is important to acknowledge that the successful embeddedness described above was not achieved without friction. During the initial phase of the sisal project in the early 2000s, CADG faced considerable resistance from local communities. Interviews and secondary sources indicate that many villagers were skeptical of the company’s land acquisition intentions, fearing land dispossession similar to experiences with other foreign investors. Local farmers initially refused to adopt improved sisal cultivation techniques, viewing them as disruptive to traditional practices. Additionally, misunderstandings arose over labor conditions: some local workers expected immediate cash payments, while the company’s payroll cycle followed a monthly schedule, leading to disputes. Community leaders reported that it took nearly three years of consistent engagement, transparent communication, and visible commitments (e.g., building a factory clinic and employing local chiefs as intermediaries) to transform initial hostility into cooperation. These early challenges underscore that responsible investment outcomes are the product of prolonged negotiation and adaptation, not a linear success story.

4.1.2 Specific practices of responsible investment

• Production-level responsible investment. CADG has continuously improved the planting and processing of sisal crops in Tanzania and integrated them into the local industrial system. Since the construction of the sisal project began in 2000 and up to 2015, the company has invested 15 million US dollars, purchased more than 150 sets of equipment, planted over 2,400 hectares of sisal, produced more than 20,000 tons of sisal fiber, and achieved sales revenue of 200 million yuan. Eighty-five percent of the product fiber is exported to China, 5–10% is exported to the Middle East, and the rest is sold in local markets. After years of accumulated practice, the project has reached a relatively leading level in Tanzania in terms of sisal seedling breeding, large-scale planting and management, fiber processing equipment, and per unit yield. The project actively implements the 10-year sisal planting restoration plan proposed by the Tanzanian government in 2012, effectively aligning with the industrial development strategy of the host country. From its inception, the company has employed experienced professional technical and management personnel. After nearly 20 years of dedicated effort, it has established a comprehensive system for sisal scale planting, processing, and sales management. Adhering to the business philosophy of quality first, the company’s products enjoy a strong reputation in the sisal industry and have become the preferred raw material for high value-added sisal fiber products both domestically and internationally.

• Community-level responsible investment. CADG has established a hospital in Tanzania to serve the community, create jobs, and improve people’s livelihoods. CAAC employs about 700 local employees year-round, and more than 300 as temporary workers, providing employment for approximately one in 10 people in Rudewa Township, where the project is located. Beyond job numbers, the quality of employment is a critical livelihood dimension. The company provides comprehensive health insurance coverage for employees’ families, a benefit that is rare in the local agricultural sector. The monthly wage bill exceeds USD 80,000, injecting significant liquidity into the local economy and enabling employees to finance their children’s education. The company pays medical insurance for all employees’ families, ensuring the livelihood of thousands of local people. The company pays more than $80,000 in wages to local workers each month, which not only solves the problem of food and clothing for employees but also gradually solves the problem of school fees for their children. To enable Tanzanians to share in the benefits of development, the company has invested US $1 million in constructing local staff dormitories, and 30 neat and fully functional staff houses have been completed. The company is bordered by six administrative villages with about 40,000 villagers. Each village has a clinic, but due to limited financial resources, there is a shortage of medicine. The company is 26 kilometers from Kirosa County Hospital, but the poor road conditions make the round trip take about two hours by car; it is also 100 km from the Morogoro Provincial Hospital, making it difficult to provide timely medical assistance. In accordance with relevant Tanzanian laws and regulations, CAAC has established a factory hospital, providing basic medical services to nearly 44,000 employees, their families, and nearby villagers, treating tens of thousands of people every year. The factory hospital makes it convenient for surrounding residents to access medical treatment in the first time, reducing the pain of patients and the economic pressure of the surrounding residents. The company has a high sense of responsibility in equal employment and labor protection for women and people with disabilities. In 2021, nearly 200 women worked in the company, eight of whom became middle-level managers, representing a progressive shift in gender norms within the local agricultural workforce; the company also employed two individuals with disabilities, supporting their livelihoods. Furthermore, the company carried out capacity building for employees. On the one hand, it finds and excavates employees with management potential from production practice, and on the other hand, it recruits young students from colleges and universities in Tanzania to build a local management team. For example, Mr. Petro Majaliwa, a technical backbone of mechanical equipment, has been sent to China for training and study three times since joining the company in 2000, significantly enhancing his skill level.

• Development-level responsible investment. CADG is actively involved in poverty reduction projects in Tanzania and promoting technology transfer. In 2011, the China-assisted poverty reduction demonstration project in Peyapaya village, Tanzania, supported and managed by the China International Center for Poverty Alleviation, was officially launched. The China–Tanzania Village-level Poverty Reduction Learning Center project was jointly undertaken by CAAC and China Agricultural University, making it the only village-level poverty reduction learning center project established by the China International Center for Poverty Alleviation in Africa to date. The project has successfully explored effective methods and experiences to improve food security and alleviate poverty at the village micro level by supporting smallholders in increasing agricultural productivity. In addition, CAAC has hosted several international conferences and events: the Third China–Africa Conference on Poverty Reduction and Development in July 2012, and in 2015, it hosted the China–Tanzania Seminar on Industrial Development and Poverty Reduction. CAAC assisted the embassy in carrying out grassroots activities under the China–Tanzania People-to-People Friendship Initiative, assisted the Chinese medical team in providing free medical treatment to Tanzania, provided internship sites for China–Tanzania education, and received about 20 local internship students every year. China was invited to assist experts from Tanzania’s Agricultural Technology Demonstration Center in conducting practical agricultural technology training on farms, and demonstration households and village cadres were selected to observe and study at the agricultural technology demonstration center.

It is important to acknowledge that the successful embeddedness described above was not achieved without friction. During the initial phase of the sisal project in the early 2000s, CADG faced considerable resistance from local communities. Interviews and secondary sources indicate that many villagers were skeptical of the company’s land acquisition intentions, fearing land dispossession similar to that experienced with other foreign investors. Local farmers initially refused to adopt improved sisal cultivation techniques, viewing them as disruptive to traditional practices. Additionally, misunderstandings arose over labor conditions: some local workers expected immediate cash payments, while the company’s payroll cycle followed a monthly schedule, leading to disputes. Community leaders reported that it took nearly three years of consistent engagement, transparent communication, and visible commitments (e.g., building the factory clinic and employing local chiefs as intermediaries) to transform initial hostility into cooperation. These early challenges underscore that responsible investment outcomes are the product of prolonged negotiation and adaptation, not a linear success story.

4.2 Benin agricultural technology demonstration center project

4.2.1 Project background and development history

In terms of foreign agricultural cooperation, CADG has undertaken the construction and operation of the Agricultural Technology Demonstration Center in Benin, assisted by China. On March 5, 2008, the governments of China and Benin signed the Protocol on Cooperation regarding China’s assistance to Benin in building an Agricultural Technology Demonstration Center. The construction of the center started in February 2009 and was completed by the end of 2010. The project includes office buildings, laboratories, multimedia classrooms, apartments for experts, dormitories for students, chicken-rearing houses, laying hens’ houses, agricultural machinery warehouses, and supporting agricultural machinery, vehicles, and equipment. The teaching and exhibition area of the center covers 56 hectares (located in Saimei City), while the production area spans 110 hectares (located in Bobei City). On October 1, 2010, the project entered the stage of technical cooperation, with the Agricultural Development International Corporation sending a management and technical team to collaborate with Benin’s agricultural department on experimental research, technical training, and demonstration promotion in maize planting, vegetable cultivation, and laying hen breeding. On October 1, 2013, the project transitioned to independent operation, with the Chinese government ceasing financial support, requiring the Agricultural Technology Demonstration Center to achieve sustainable development in both public welfare and economic functions.

4.2.2 Specific practices of responsible investment

(1) Production-level responsible investment. CADG has conducted technical trials and studies in Benin to adapt to local production conditions. During the period of technical cooperation, the Agricultural Technology Demonstration Center has carried out experimental research, demonstration, and promotion of crop planting and poultry breeding technologies, primarily focusing on corn, vegetables, and laying hens. In terms of maize technology experiments, 10 maize varieties, such as Chuyu No. 1, Chuyu No. 6, Xianyu 335, and the fresh maize variety Heineruo No. 4, were introduced from China. The adaptability test, maize product ratio test, and breeding of inbred lines were carried out. The results of several comparative experiments indicated that the Chinese corn hybrids and their supporting cultivation techniques significantly increased yields compared to local varieties and management methods, with yield increases ranging from 40.4 to 106.3%. In addition, the selection and breeding of maize inbred lines should be actively promoted to develop maize hybrid varieties that combine the advantages of both countries’ maize varieties and are suited to the climate and soil conditions of Benin. In the vegetable planting experiments, 34 types of vegetables and 85 varieties were introduced from China for trial planting. Through adaptability tests and product ratio tests, more than 10 types of vegetables with good adaptability, stable yields, and high yield potential were identified, including cowpea, winter melon, cucumber, Zhangqiu spring onion, pepper, leek, bamboo leaf cabbage, and yam. In the area of laying hens breeding, we carried out experimental breeding of Issa Brown commercial laying hens, using relatively advanced breeding technology from China while considering local climate characteristics, resulting in good performance.

(2) Community-level responsible investment. CADG conducted technical training in Benin to support local farmers. The Agricultural Technology Demonstration Center established training courses for local agricultural technicians, consultants, and farmers to conduct training and technology demonstrations on maize planting, vegetable cultivation, and poultry breeding. Through the training, the experts at the center learned about the current state of local agricultural production from the participating agricultural technicians. With the assistance of the agricultural technicians, the center indirectly spread China’s advanced technology to local producers, thus expanding its influence. In November 2012, the center began using the “going out” training method to make the training more standardized and accessible, benefiting more people. After extensive planning and discussions with the Ministry of Agriculture of Benin and the Agricultural Technology Station of Weime Plateau Province, the project team initiated the “going out” training to directly teach practical production techniques to producers. To ensure effective training, the project team rented local schools or municipal meeting rooms as temporary classrooms and provided generators, projectors, speakers, computers, and other equipment for theoretical instruction. After the completion of the theoretical sessions, experts selected the nearest corn field for field demonstrations, teaching the technology on-site to achieve a close integration of theory and practice. This training model was welcomed by local agricultural technical station officials and farmers, leading many schools, agricultural organizations, and related institutions to visit the center for consultation and learning.

(3) Development-level responsible investment. CADG established a scientific research platform in Benin to promote agricultural cooperation between China and Benin. After the first three years of experimental research and demonstration work, the Benin Agricultural Technology Demonstration Center gained a clearer understanding of local agricultural development and scientific research needs and established preliminary cooperative relations with Benin’s agricultural research institutions. Based on this platform, the Agricultural Development International Corporation undertook the China–Benin Maize Joint Research Center project from the Ministry of Science and Technology. The project aims to utilize China’s mature hybrid breeding theory and technology to identify germplasm and hybrid varieties suitable for Benin’s local conditions, establish a suitable maize breeding and cultivation technology system for Benin, explore feasible mechanisms for local maize research, and promote the development of the maize industry. Under the coordination of the Benin Ministry of Agriculture, the Agricultural Technology Demonstration Center and the Benin National Academy of Agricultural Sciences, along with its maize research center, held several technical discussions to outline the overall framework for China–Benin cooperation in maize experimental research. Through project collaboration, a series of training sessions were conducted for Benin’s researchers, enhancing the scientific and technological level of Benin’s maize industry and the research capacity of its professionals.

Following the end of the technical cooperation period in 2013, the center entered an independent operational phase. During this phase, the center has sustained its operations by generating revenue from agricultural product sales (e.g., maize, vegetables, eggs) and providing paid technical consulting and training services to local farmers and agribusinesses. By 2015, the center had trained over 1,000 local farmers and technicians annually, and its demonstration fields achieved maize yields 40–60% higher than local averages, demonstrating the feasibility of balancing public welfare objectives with financial self-sustainability.

5 Analysis of embedded liability mechanism from the perspective of institutional distance

5.1 Compliance operation from the perspective of regulatory distance

In the cases of Tanzania and Benin, the regulatory distance is mainly reflected in the differences in legal systems, regulatory frameworks, and policy implementation. Specifically, the first difference lies in land systems. Tanzania implements public land ownership, but the allocation of actual land use rights has strong local characteristics and is subject to the Village Land Act, which requires community consultation. Benin adopts private land ownership, and the state does not control a large area of land resources. This is significantly different from China’s public land ownership and government-led land allocation model. China Agricultural Development has acquired 6,900 hectares of land use rights in Tanzania but only 166 hectares of project land in Benin. This difference directly reflects the rigid constraints of the host country’s land system on the scale of agricultural investment. This stark contrast illustrates how land governance regimes fundamentally shape the potential scale of agricultural investment and the associated development footprint. The second difference is in investment access. Tanzania is relatively open to foreign investment in agriculture but requires enterprises to abide by local laws and regulations on labor and environmental protection. Benin has set strict restrictions on the access of foreign crop seeds. Chinese corn and vegetable seeds can only be tested in agricultural technology demonstration centers and are not allowed to enter the local market. Such access restrictions constitute an institutional barrier to technology transfer. The third difference lies in industry regulation. The two countries have different requirements regarding animal and plant quarantine, tax arrangements, and the repatriation of profits, which increase compliance costs for businesses and the management of uncertainty.

CADG has effectively responded to the pressure of regulatory distance through a production embedding strategy. (1) The development strategy of docking. In the sisal project in Tanzania, the enterprise actively practices the “10-year sisal Planting Restoration Plan” proposed by the Tanzanian government, effectively connecting its development strategy with the industrial policy of the host country. This policy support not only positions the enterprise as a partner of local industries rather than simply as a foreign operator. (2) Production technology adaptation. In Benin, agricultural technology demonstration centers have introduced 34 kinds of maize varieties and 85 varieties of vegetables, conducting adaptive tests and comparative experiments to select those with good adaptability and high yield potential, along with supporting cultivation techniques. The adaptation process essentially embeds domestic technological knowledge embedded in the host country’s natural and social conditions. (3) Into the industry system. Tanzania sisal project after years of development, the enterprise scale in sisal seedling breeding, planting and management, the respect such as fiber processing to the local leading level, formed a complete technical system suitable for the local conditions and industry system, and achieved from outsider to industry leader identity transformation.

5.2 Normative distance from the perspective of social identity

Normative distance is reflected in differences in values, codes of conduct, and social expectations. The practices of CADG in Tanzania and Benin demonstrate that the expectations of local communities on corporate behavior focus on several aspects: providing employment opportunities, participating in community welfare, respecting local customs, and protecting the rights and interests of employees. If companies perform poorly in these aspects, even if they completely conform to the requirements of the law, they are still likely to lose their social license to operate. In the two cases, the normative distance is primarily evident in employment expectations and community involvement. The local community generally expects foreign companies to create jobs that is not limited to low-end jobs. In Rudewa Township, Tanzania, where the project is located, companies are expected to drive regional economic development. Local society expects enterprises to actively participate in community affairs, including but not limited to public services like healthcare, education, and infrastructure. This expectation far exceeds the general understanding of corporate social responsibility among Chinese enterprises. Third, employees’ rights and interests. Host countries have different social norms and expectations from China regarding women’s employment, protection for the disabled, and labor protection.

Agricultural development in community embedding strategy can be summarized as three levels: hiring, service, and feedback. (1) Employment: The Tanzania sisal project has permanently employed more than 700 people, with over 1,000 temporary workers, addressing the employment issue for about one-tenth of the local labor force. The project pays more than $80,000 a month, which not only solves employees’ food and clothing needs but also gradually solves the tuition costs for their children. (2) Services. The project established an administrative office in a factory and a hospital, providing basic medical services to 44,000 families of employees and surrounding villagers, while accepting tens of thousands of visitors every year. The hospital’s medical staff receive a salary and monthly social security spending of $3,200, with drug costs at $2000, leading to annual spending of up to $126,000. This provision of services has significantly improved local access to healthcare. (3) Give back. The enterprise actively interacts with surrounding communities, helping residents repair houses, providing small farm tools and anti-malaria supplies, donating tables and chairs to schools, and participating in disaster relief efforts. The local village privatized the farm in 2014, and due to the agricultural development group’s good relationship with local government and villagers, the sisal farm was not reclaimed. In 2016, when the farm was confronted with armed robbers, the local public security bureau sent six policemen to help maintain peace. These examples demonstrate that the enterprise, through continuous community embedding, has gained recognition and support from the local society, establishing regulatory legitimacy. The Benin project utilizes a “going out” training model, teaching practical production technology directly to producers. It leases local schools or municipal government facilities as temporary classrooms, equipped with generators and projectors for theoretical teaching, while providing hands-on training at demonstration sites. This training model has been welcomed by local agrotechnical station officials and farmers.

5.3 Ability cultivation from the perspective of cognitive distance

Cognitive distance refers to the differences between the host country and the home country in terms of thinking modes, cognitive frameworks, and meaning construction. Outstanding performance in agriculture is linked to cognitive distance regarding agricultural production technology, management, and differing development ideas. Tanzanian and Beninese farmers have long relied on extensive cultivation methods, lacking cognitive understanding and trust in modern agricultural technologies such as intensive cultivation, reasonable density, and scientific fertilization. Embedded development is central to the agricultural development strategy in response to cognitive distance. Its core idea is not merely to output technology unidirectionally, but to grow alongside host country farmers and agricultural systems. Their production model does not replace traditional methods but aims to enhance their capacity for independent development. Specific paths include:

• The concept of technical demonstration and spread. Palin, peja village poverty reduction in Tanzania demonstration projects, the Chinese agricultural experts into the fields, to the local villagers holding teach intensive farming technology, changed the local extensive planting pattern of cultivation. Local farmers bring China expert technology, called China’s technology of corn, corn 2–3 times the average output. This tangible yield increase has gradually changed farmers’ perceptions of modern agricultural technology.

• The capability and knowledge transfer. The Tanzania sisal project emphasizes staff capacity building as a key task, training excellent staff in China to build a local management team. The Benin agricultural technology demonstration centers combine “please” and “going out” training models to educate a large number of local agricultural extension workers, farmers, and practical production technology. These training activities not only delivered technical knowledge but also gradually changed farmers’ perceptions of “good farming.”

• The development philosophy of dialogue and integration. In Tanzania, the 2015 project innovatively demonstrated intercropping maize and dal, enabling farmers to earn higher incomes despite severe drought. Local farmers recognize that the intercropping of food and cash crops benefits household food consumption while also providing the dual effect of higher income. This innovative technology model reflects the dialogue and integration of development concepts between Chinese experts and local farmers.

5.4 Cross-case comparison

The differences in embedding strategies between the Tanzania and Benin cases, along with their theoretical implications, are summarized in Table 2.

6 Impact assessment of responsible investment

The responsible investment practices of CADG in Tanzania and Benin have generated multidimensional impacts on host countries. Beyond the firm-level strategic outcomes discussed in previous sections, this section evaluates the development effects through the lenses of food security and agricultural productivity, livelihood improvement and income distribution, and land governance and institutional change.

6.1 Food security and agricultural productivity effects

Food security, as defined by the Food and Agriculture Organization (FAO), encompasses four interrelated pillars: food availability, economic and physical access to food, food utilization (including dietary diversity and nutritional adequacy), and stability of these three dimensions over time. It is crucial to distinguish food insecurity from poverty at the conceptual level. Poverty—defined by low income or asset deprivation—is a primary driver of food insecurity, but the relationship is not mechanistic. Increased agricultural production (availability) or even increased household income (access) does not automatically translate into improved dietary diversity, adequate nutrition, or stable access to food, particularly for vulnerable populations such as women, children, the elderly, and the landless. Intra-household food allocation patterns, gender dynamics, care practices, and health status all influence the translation of production and income gains into food security outcomes. This section assesses CADG’s contributions across the four pillars while candidly acknowledging where data limitations preclude definitive conclusions, particularly regarding utilization and nutrition.

The CADG projects demonstrate that responsible agricultural investment can contribute to local food availability and stability through two primary channels: productivity enhancement and climate resilience.

Productivity enhancement (availability pillar). In Benin, the Agricultural Technology Demonstration Center introduced 10 maize varieties and 85 vegetable varieties from China. Adaptive trials and comparative experiments identified varieties with strong adaptability and high yield potential. The results of multiple comparative trials showed that Chinese maize hybrids and their accompanying cultivation techniques significantly outperformed local varieties and management practices, with yield increases ranging from 40.4 to 106.3%. These productivity gains are not merely experimental; through the “Going Out” training model, the center extended these practices directly to smallholder farmers, translating technical success into tangible improvements in the local food supply.

In Tanzania, the poverty reduction demonstration project in Peya Village yielded even more dramatic results. In 2013, the maize yield of the 31 demonstration households increased by an average of 224% compared to the 78 non-demonstration households in the village. In 2014, the average maize yield of the 44 demonstration households increased by 269% compared to the 60 non-demonstration households. These figures represent a substantial increase in household-level food availability, reducing the vulnerability of participating families to seasonal food shortages and strengthening the first pillar of food security.

Climate resilience and stability (stability pillar). A crucial dimension of food security is the stability of supply, particularly in the face of climate variability. The 2015 intercropping demonstration in Peya Village provides a compelling case. In a year marked by severe drought, farmers who adopted the maize and pigeon pea intercropping model not only avoided crop failure but achieved incomes 20 to 30% higher than those using traditional methods. The intercropping system served dual purposes: maize provided the staple food crop for household consumption, while pigeon pea offered a marketable cash crop. Importantly, pigeon pea is a protein-rich legume, and its integration into the farming system diversified the local food basket, extending the nutritional contribution beyond caloric sufficiency. This diversification acted as a buffer against climatic shocks, directly enhancing the resilience of local food systems. Local farmers, witnessing these outcomes, began referring to the techniques as “China’s technology,” signifying a shift in perception and adoption behavior.

Food access (access pillar). The income gains from the Peya Village project—58% in 2013 and 159% in 2014 for demonstration households compared to non-demonstration households—enhanced households’ economic capacity to purchase diverse foods, including animal-source foods, fruits, and vegetables not produced on-farm. In the Tanzania sisal project, the monthly wage bill exceeding USD 80,000 injected predictable liquidity into the local economy, providing formally employed households with the means to access food through markets. However, the extent to which increased income translated into improved dietary diversity depends on intra-household allocation patterns, food prices in local markets, and the availability of diverse foods—factors on which the current evidence base does not permit definitive conclusions.

Food utilization and nutrition (utilization pillar). The available data do not include direct measures of dietary diversity scores, anthropometric indicators, or micronutrient status for project beneficiaries, which constitutes a significant evidence gap. Nevertheless, two indirect pathways suggest plausible positive contributions. First, the maize–pigeon pea intercropping model has directly increased the availability of protein-rich legumes in participating households’ food systems, potentially improving dietary quality. Second, the factory hospital’s provision of accessible healthcare—including maternal and child health services—may have positively influenced the health and sanitation determinants of nutritional status. The employment of women and their advancement into managerial roles, as discussed below, is associated with enhanced investment in children’s nutrition in similar contexts. We recommend that future project monitoring incorporate dietary diversity and nutrition indicators to enable a more rigorous assessment of food utilization outcomes.

Limitations and caveats. It is important to acknowledge methodological constraints in interpreting these productivity figures. The comparison groups in Peya Village were selected from adjacent villages with similar landholding sizes (averaging 1.5–2.0 hectares) and initial soil fertility conditions. However, due to the non-randomized nature of program participation, unobserved selection biases—such as differing motivation levels or risk tolerance between early adopters and non-adopters—may exist. Therefore, the reported yield increases should be interpreted as indicative of the technology’s potential under favorable support conditions rather than as average treatment effects in a strict statistical sense. Furthermore, the scalability of these results to a broader population depends on the continuity of extension services and input supply, which are not guaranteed beyond the project cycle.

6.2 Livelihood improvement and income distribution effects

Beyond aggregate employment numbers, a nuanced analysis of livelihood impacts requires attention to the quality of employment, income stability, and distributional equity. The CADG cases reveal both significant achievements and persistent challenges in these areas.

Quality of employment and income stability. The Tanzania sisal project employs approximately 700 local workers year-round and over 300 temporary workers, accounting for roughly one-tenth of the labor force in Rudewa Township. However, the developmental significance of this employment extends beyond the headcount. The company provides comprehensive health insurance coverage for employees’ families, a benefit that is rare in the local agricultural sector and represents a substantial non-wage compensation component. In the context of rural Tanzania, where informal, seasonal, and unremunerated agricultural labor predominates, formal sector employment with regular wages, health insurance, and housing provision represents a qualitatively different livelihood pathway. The monthly wage bill exceeds USD 80,000, injecting significant and predictable liquidity into the local economy. This regular income stream has enabled employees to finance their children’s education, breaking the intergenerational cycle of poverty. The construction of 30 modern staff houses at a cost of USD 1 million further improved living standards and signaled a long-term commitment (Djokoto et al., 2022).

Smallholder engagement and income growth. The poverty reduction project in Peya Village generated significant income gains for participating households. After deducting various expenses, the income of demonstration households increased by 58% in 2013 and 159% in 2014 compared to non-demonstration households. These income gains are attributable to higher yields from improved cultivation practices, reduced post-harvest losses through better handling techniques, and enhanced marketability from improved product quality. In the 2015 drought year, demonstration households adopting maize–pigeon pea intercropping achieved incomes 20–30% higher than non-adopters, demonstrating the income-stabilizing role of crop diversification. The project shows that when smallholders are integrated into technology transfer programs with adequate support, agricultural investment can be pro-poor in its orientation.

Gender and social inclusion. The case evidence indicates positive outcomes in gender equity and social inclusion. In 2021, nearly 200 women were employed in the Tanzania sisal project, with eight holding middle-management positions. For women in rural Tanzania, formal sector employment is associated with enhanced bargaining power within the household, greater control over household resources, and increased investment in children’s health and education—outcomes documented in the broader development literature. The factory hospital, by offering accessible healthcare to employees’ families and surrounding villagers, alleviates the care burden that disproportionately falls on women in rural settings. The company also employed two persons with disabilities, providing livelihood security for a marginalized group often excluded from formal labor markets.

Distributional concerns: elite capture and equity. Despite these positive outcomes, the distribution of benefits warrants critical scrutiny. The demonstration households in Peya Village were selected based on their willingness to adopt new practices, which may correlate with higher initial resource endowments, better education, or stronger social networks. This introduces the risk of “elite capture,” whereby the most resourceful farmers capture disproportionate benefits from project interventions while the poorest and most marginalized—who may face labor constraints, insecure land tenure, or lack of social capital—are left behind. While the project expanded its coverage in subsequent years, the initial phase highlights a persistent challenge in agricultural extension and technology transfer programs: ensuring inclusive targeting and equitable access to project resources.

The available evidence does not permit a definitive assessment of the socioeconomic profile of participants versus non-participants, nor of the distribution of benefits along wealth, gender, or ethnic lines. This represents a limitation of the current study and an important area for future research. Indicators such as the share of benefits accruing to female-headed households, the landless, and the bottom wealth quintile would be particularly informative for evaluating the pro-poor credentials of responsible investment.

6.3 Land governance and institutional environment effects

Land is the foundational asset in agricultural investment, and the way enterprises engage with local land governance systems has profound implications for legitimacy and long-term sustainability. The two cases offer contrasting lessons on how investment models interact with land tenure regimes.

Tanzania: large-scale leasehold and community relations. CADG’s 6,900-hectare sisal plantation in Tanzania operates under a leasehold arrangement within the framework of the Village Land Act, which recognizes customary rights and requires community consultation. The company’s compliance with legal procedures and its sustained community engagement—through employment, health services, and infrastructure—have contributed to a degree of local acceptance. Notably, when a local village attempted to privatize part of the farm in 2014, the effort failed due to the strong relationship CADG had cultivated with local government and villagers. Similarly, when the farm faced security threats from armed robbers in 2016, the local police deployed officers to help maintain order, reflecting institutional support.

However, a critical perspective must acknowledge the inherent power imbalances in large-scale transnational land acquisitions. The 6,900-hectare lease, while legal and accompanied by responsible practices, represents a significant shift in land use patterns that can have lasting implications for local livelihoods—for instance, restricting access to grazing routes, water sources, or non-timber forest products. The case demonstrates that responsible conduct can mitigate immediate conflict, but it does not fully resolve the structural tensions embedded in foreign control of extensive land resources. The long-term issue of land tenure security for local communities adjacent to the investment remains a concern that merits continued monitoring.

Benin: smallholder-dominated private land system. Benin’s private land ownership system and the dominance of smallholder agriculture created a fundamentally different dynamic. The state does not control large tracts of land, and the Agricultural Technology Demonstration Center operated on a modest 166-hectare footprint. This small scale avoided the large-scale displacement concerns associated with the Tanzanian case. Instead, the project’s impact on land governance was channeled through technology demonstration and institutional capacity building. By collaborating with Benin’s National Academy of Agricultural Sciences and establishing the China–Benin Maize Joint Research Center, CADG contributed to strengthening the institutional infrastructure for agricultural research and extension. This form of engagement is less intrusive in terms of land rights but also limits the project’s ability to achieve economies of scale and broader food system transformation.

Institutional environment improvement. Beyond land governance, CADG’s responsible practices have positively influenced the broader institutional environment for foreign investment. The company’s compliance with tax regulations—having paid approximately USD 16 million in taxes to the Tanzanian government—and its generation of over USD 18 million in foreign exchange earnings demonstrate the potential for mutual benefit. When severe flooding occurred in 2010, CADG was the first local enterprise to participate in disaster relief assistance, immediately donating supplies. This action, beyond its humanitarian value, signaled a long-term commitment to the host community and helped foster a more favorable policy environment for Chinese agricultural investment.

6.4 Synergistic effects and virtuous cycles

The four dimensions of impact—food security, livelihoods, land governance, and institutional environment—are not isolated but mutually reinforcing. Industrial productivity provides the economic foundation for technology spillover and livelihood improvement. Livelihood gains foster community trust and normative legitimacy, which in turn facilitate enhancements in the institutional environment. An improved institutional environment reduces transaction costs and policy risks, creating favorable conditions for sustained responsible investment. Critically, improvements in food security and livelihood gains are also mutually reinforcing: enhanced household income enables better food access and dietary diversity, while improved nutrition strengthens human capital, labor productivity, and the capacity to engage in agricultural innovation. Together, these synergistic effects form a virtuous cycle that advances the common development of both the enterprise and the host country. The case of CADG illustrates that responsible investment, when strategically embedded in local institutional and social fabrics, can serve as a catalyst for multidimensional development outcomes that extend far beyond the firm’s balance sheet.

7 Responsible investment problems and challenges

Despite the positive impacts documented in the preceding section, CADG’s responsible investment practices in Tanzania and Benin have encountered significant and persistent challenges. These constraints operate at multiple levels: the financial viability of the enterprise, the structural mismatch between corporate supply and community demand, the uncertainty of the host country’s institutional environment, internal organizational adaptation difficulties, and policy coordination gaps in the home country. A balanced assessment requires acknowledging these limitations and trade-offs.

7.1 Contradiction between financial pressure and sustainable operation

Responsible investment requires continuous and substantial resource allocation, placing significant pressure on the financial sustainability of the enterprise. The factory hospital of the Tanzania sisal project provides a compelling example. The hospital incurs monthly expenses of approximately USD 3,200 for staff salaries and social security, USD 2,000 for pharmaceuticals, USD 200 for utilities, USD 600 for maintenance, and USD 1,600 for transport and transfers. Annual expenditures further include USD 3,000 for medical personnel training and USD 2,000 for annual check-ups, totaling approximately USD 126,000 per year. For a labor-intensive agricultural enterprise with an annual output value in the hundreds of millions of dollars but very limited profit margins, this represents a significant and relatively inflexible cost burden that exceeds what might be considered commercially optimal.

A deeper structural problem lies in the inherent tension between responsible investment commitments and corporate profitability. Agricultural investment projects are characterized by long investment cycles, high exposure to natural risks, and thin profit margins. In contrast, the social expenditures required for responsible investment—such as healthcare, education, and community services—are fixed and recurring. They cannot be easily adjusted downward during periods of market fluctuation or operational difficulty. When an enterprise faces financial headwinds, these social obligations become fixed costs that are difficult to reduce without jeopardizing the community trust and legitimacy that have been painstakingly built. As noted in relevant research, agricultural enterprises with overseas investments face multiple constraints, including strict agricultural protection policies in host countries, differences in natural endowments, and a challenging business environment, all of which collectively compress profit margins and limit the fiscal space for social spending (Zhong et al., 2023).

7.2 Structural mismatch between responsible supply and community demand

Enterprises often face a structural mismatch between the social services they provide and the actual demands of the host community. In the Tanzania sisal project, although the factory hospital offers essential basic medical services, its capacity and equipment remain inadequate relative to community needs. Currently, the hospital is equipped with only a simple laboratory. Examinations requiring electrocardiograms, X-rays, or ultrasound must be referred to facilities located tens or even hundreds of kilometers away, resulting in significant delays and transport burdens. The hospital lacks a dedicated ambulance, forcing reliance on the company’s production utility vehicles for patient transfers. This arrangement is suboptimal for emergency care and simultaneously disrupts the enterprise’s productive operations.

This mismatch reflects a deeper structural challenge. As market actors, enterprises make decisions regarding social service provision based on their own resource constraints and cost considerations. Communities, as the recipients of these services, have demands that are diverse, hierarchical, and dynamic. When the limited resource capacity of the enterprise is unable to keep pace with the expanding service expectations of a growing community, a structural gap emerges between the supply of and demand for social responsibility. The widening of this gap can, over time, erode the community trust and normative legitimacy that the enterprise has heavily invested in building, creating a cycle of rising expectations and constrained delivery capacity.

7.3 Uncertainty and policy risks in the host country’s institutional environment

Business operations and responsible investment in Africa are significantly constrained by political and economic factors in host countries, introducing substantial uncertainty.

Political risk and policy volatility. Regime change and policy shifts represent major sources of risk. Since taking office, Tanzanian President Magufuli has adopted a more assertive stance toward foreign enterprises, altering the investment climate and complicating operational planning for firms like CADG. Such policy shifts not only affect the normal conduct of business but also strain government–enterprise relations, potentially undermining the goodwill accumulated through prior responsible investment. Secondly, the tightening of visa policies directly restricts the deployment of expatriate employees and technical experts. The increased difficulty and cost of obtaining visas—with one expert required to pay USD 250 per quarter for a visa—not only raise operational costs but also threaten the continuity of technology transfer and knowledge exchange. For the Agricultural Technology Demonstration Center in Benin, the stable presence of Chinese experts is essential for effective technology promotion and capacity building; fluctuations in visa policy therefore pose a direct threat to project sustainability.

Market access barriers. The market entry restrictions imposed by African countries also hinder enterprise operations and development. At Benin’s Agricultural Technology Demonstration Center, Chinese maize and vegetable seeds can only be tested within the confines of the center and are prohibited from entering the local market due to the government’s stringent conditions on introducing foreign crop germplasm. Such restrictions on market access significantly constrain the translation of technical achievements into large-scale industrial impact, thereby weakening broader technology spillover effects. A deeper constraint lies in the procedural barriers surrounding the import and export of plant and animal seedlings. Failure to navigate these legal procedures meticulously can delay planting, breeding, and the demonstration of results. These procedural hurdles reflect the host country’s cautious approach to agricultural technology introduction, but they also impose substantial time costs and institutional friction on the technology transfer process.

Land tenure constraints. In large-scale agricultural operations, the problem of insufficient or insecure land access is pervasive. The original land allocated for the Agricultural Technology Demonstration Center in Benin could not be fully utilized due to safety concerns and the lack of objective conditions required for agricultural development. Benin’s private land ownership system means that the state does not control extensive tracts of land suitable for large-scale farming, and authorities have indicated difficulty in providing large contiguous areas that meet development requirements. The rigid constraints of the land tenure system fundamentally limit the scale and long-term sustainability of agricultural investment. Agricultural investment is intrinsically land-dependent, and large-scale operation is a basic prerequisite for achieving technical efficiency and economic viability. When enterprises cannot secure sufficient, contiguous, and legally secure land use rights, they are unable to realize economies of scale, nor can they confidently undertake long-term investments in soil improvement and infrastructure. This land tenure constraint places enterprises in a double bind of “no land to plant” and “land to plant without security.”

Social and cognitive barriers to technology adoption. The social basis of agricultural production and management constitutes a significant constraint on technology promotion. Benin’s agricultural sector is dominated by smallholders operating at a very small scale, which hinders large-scale technology extension. The vast majority of farmers lack the economic capacity to adopt Chinese technologies without sustained subsidized support. The fragmentation and low capitalization of smallholder agriculture result in high transaction costs and adoption thresholds for technology promotion. A more fundamental barrier exists at the cognitive level. Farmers’ planting concepts are often traditional and deeply entrenched. For instance, the “single seed” technique for maize—planting only one seed per hole—conflicts with traditional African farming practices and is not readily accepted. Bridging this cognitive gap requires sustained technology demonstration, capacity building, and dialogue of ideas, rather than short-term training interventions. As studies have shown, the greatest challenge faced by Chinese agricultural enterprises in Africa is not the technical sophistication of the technologies themselves, but rather how these technologies can be integrated with local production traditions, cognitive frameworks, and social organizations (Li et al., 2022).

7.4 Internal organizational adaptation challenges

Beyond the external constraints discussed above, CADG also faced significant internal challenges in implementing its responsible investment strategies. While these challenges are less visible in public-facing project reports, they were crucial to understanding the organization’s learning trajectory.

First, cross-cultural management competence was a persistent internal hurdle. The Tanzania sisal project employed approximately 800 local workers from diverse backgrounds, with varying levels of education (including some illiterate employees) and differing religious affiliations. Early-stage Chinese managers and technical experts often lacked proficiency in local languages (Swahili in Tanzania, French in Benin). According to project records, this linguistic and cultural gap required ongoing efforts to bridge, as evidenced by the company’s deliberate strategy of cultivating local management talent and relying on culturally knowledgeable local employees to advise Chinese managers and avoid misunderstandings or labor disputes.

Second, internal tensions between commercial and social objectives emerged as a recurring organizational challenge. The factory hospital in Tanzania incurred substantial recurring costs (over USD 126,000 annually), while the sisal project’s profit margins remained limited. This financial pressure likely created conflicting incentives: while corporate headquarters demanded cost control and return on investment, local teams needed to maintain social spending to preserve the community trust that had been painstakingly built over years of engagement.

Third, knowledge management and organizational learning deficits posed internal adaptation difficulties. CADG’s responsible investment practices were initially developed on an ad hoc, project-by-project basis. The Tanzania sisal project (initiated in 1999) and the Benin Agricultural Technology Demonstration Center (initiated in 2008) operated largely independently for many years. It was not until the establishment of the China–Africa Agricultural Investment (CAAC) Co., Ltd. in 2010 that CADG began to consolidate its African agricultural investment management under a unified platform, which facilitated greater cross-project learning.

Fourth, staff retention and succession planning emerged as critical vulnerabilities. Responsible investment requires long-term relationship building with local communities, which depends on the continuity of key personnel. While some Chinese experts, such as the chief engineer who worked in Tanzania for 17 years, demonstrated exceptional long-term commitment, industry-wide surveys indicate that Chinese enterprises overseas often face high expatriate turnover rates, with some studies reporting 2-year turnover rates as high as 70% in challenging environments. Although project-specific turnover statistics for CADG are unavailable, frequent personnel changes—particularly in management positions—pose challenges to maintaining stable community relationships and preserving institutional memory.

These internal challenges—cross-cultural competence gaps, tensions between commercial and social objectives, knowledge management deficits, and staff retention difficulties—interacted with external constraints to shape the overall trajectory of CADG’s responsible investment. Acknowledging these internal struggles provides a more balanced and realistic account of the organizational learning process underlying successful embeddedness.

7.5 Improvement of policy coordination and support in home countries

CADG’s responsible investment in Tanzania and Benin has benefited from support under China’s foreign aid policies and agricultural “going global” initiatives. However, in practice, the coordination between foreign aid policies and investment policies still requires strengthening. The Tanzania sisal project was initially launched as a foreign aid project and subsequently transformed into a commercial investment undertaking. The Benin Agricultural Technology Demonstration Center was required to transition to independent operation and achieve financial self-sustainability after the conclusion of the technical cooperation period. This transformation—from aid to investment—demands effective policy articulation and seamless transition mechanisms.

In practice, the coordination mechanisms between these two policy domains remain imperfect. Foreign aid policy emphasizes technology transfer and capacity building, prioritizing public welfare and the demonstration effects of projects. Investment policy, conversely, focuses on economic returns and market competitiveness, emphasizing enterprise sustainability and profitability. When a project transitions from the aid phase to the investment phase, the tension between public welfare objectives and commercial viability becomes acute. Designing effective transition mechanisms and cultivating self-sustaining “hematopoietic” capacity while safeguarding public welfare achievements are core issues that require more deliberate policy coordination.

Agricultural overseas investment is confronted with multiple uncertainties, including political risk, policy volatility, and natural hazards. Yet the existing risk protection mechanisms remain incomplete. In Tanzania, the policy shift triggered by regime change significantly impacted enterprise operations. In Benin, restrictions on seed market access constrained the industrialization and scaling of technical achievements. To some extent, these risks can be mitigated through bilateral investment treaties, export credit insurance, and similar instruments. However, significant institutional gaps persist in risk identification, risk assessment, and risk compensation. This is especially true for responsible investment, where enterprises bear not only commercial risks but also additional social and reputational risks. When community service facilities—such as hospitals and schools established by the enterprise—are forced to suspend operations due to political instability, the enterprise faces not only asset losses but also reputational damage and a crisis of community trust. The existing risk protection framework does not yet adequately cover such compounded and socially embedded risks.

7.6 Trade-offs and unintended negative effects

A balanced and critical assessment requires explicit acknowledgment of the trade-offs and potential unintended negative consequences associated with the responsible investment model. While the overall impact of CADG’s practices has been positive, several areas warrant critical reflection.

Trade-off between financial sustainability and social provision. The factory hospital represents a significant and recurring financial commitment. While this service is demonstrably valuable to the community and has been instrumental in building normative legitimacy, it also constitutes a fixed cost that pressures enterprise profitability. In years of adverse market conditions or climatic shocks, management faces an acute trade-off: reducing social spending to meet financial targets risks eroding community goodwill and legitimacy, while maintaining social spending at the expense of financial performance may be unsustainable in the long run. This trade-off is not unique to CADG but is inherent in models of corporate-led social provision in low-margin agricultural sectors.

Risk of elite capture in demonstration projects. The remarkable yield and income gains achieved in the Peya Village poverty reduction project were realized with intensive technical support from Chinese experts and under relatively controlled conditions. As the project expanded to “ten thousand households and ten thousand mu” in Morogoro Province, questions arise as to whether the same intensity of support and quality of input access can be sustained at scale. There is a risk that without sustained external funding, subsidized inputs, or a commercially viable model for extension services, the benefits of technology adoption may not be evenly distributed. Early adopters and relatively better-resourced farmers may capture a disproportionate share of the gains, while the poorest and most marginalized smallholders—who may face labor constraints, lack of capital, or insecure land tenure—are left behind. The case evidence does not provide granular data on the socioeconomic profile of participants versus non-participants, which limits the ability to draw definitive conclusions about distributional equity.

Market distortions and limited seed system development. In Benin, the high-quality maize varieties developed and demonstrated at the center were primarily intended for seed multiplication and local consumption by participating farmers. However, stringent regulatory restrictions prevented the commercial sale and broader distribution of these improved varieties. While these regulations are in place to protect national biosecurity and seed sovereignty, they also inadvertently limited the broader seed system development that could have amplified the project’s food security impact. The inability to legally commercialize the improved varieties meant that the technology spillover remained confined to direct project participants rather than diffusing through market channels. This illustrates a tension between the public-good orientation of the aid project and the market-based mechanisms that could sustain and scale its impacts.

Power asymmetries in land-based investment. The 6,900-hectare leasehold in Tanzania, while legally acquired and accompanied by responsible community engagement, represents a structural transformation of land use that entails inherent power asymmetries between a large foreign enterprise and local smallholders. The responsible practices documented in this case—employment, health services, community dialogue—successfully mitigated immediate conflict and secured a social license to operate. However, these practices do not fundamentally alter the structural reality of foreign control over extensive land resources in a context where local communities have limited alternative livelihood options and may lack the institutional capacity to effectively assert their land rights. The long-term implications for local land access, grazing routes, and non-timber forest products remain an ongoing concern that the current evidence base does not fully address.

8 Conclusion and implications

8.1 Core conclusions

Based on the theory of system theory and corporate social responsibility, to build the system of “legitimacy” distance–embedded responsibility–analysis framework, and using the agriculture development group and Benin project in Tanzania as a double case study, this research deeply analyzes the agricultural practices of multinational enterprises, their responsible investment mechanisms, effects, and challenges. The study draws the following core conclusions:

• The institutional distance faced by agricultural multinational enterprises is characterized by multidimensional and situational embeddedness. In the cases of Tanzania and Benin, the regulatory distance is manifested as differences in laws and policies regarding land systems, investment access, industry supervision, and germplasm access. The normative distance is represented by differences in social expectations related to employment creation, community welfare, employees’ rights and interests, and the protection of women and the disabled. Cognitive distance is represented by varying cognitive frames in agricultural production technology, intensive farming concepts, risk perception models, development concepts, and so on. The institutional distance across these three dimensions is interrelated and progressive, together constituting the spectrum of legitimacy pressure that enterprises must face upon entering the host country.

• Through a three-tier progressive strategy of production, community, and development embeddedness, enterprises effectively respond to institutional pressures across various dimensions. Production embeddedness achieves regulatory legitimacy through compliance, industrial integration, and technology adaptation. Community embeddedness secures normative legitimacy via job creation, community services, and public welfare engagement. Development embeddedness attains cognitive legitimacy through technology empowerment, capacity building, and the integration of development concepts. These three tiers are progressive and synergistic: production embeddedness provides the material foundation; community embeddedness serves as a critical bridge; and development embeddedness is essential for achieving identity transformation from “outsider” to “insider.”

• Responsible investment has a multi-dimensional positive impact, including effects on industrial development, technology spillover, livelihood improvement, and the institutional environment. The analysis demonstrates that these impacts extend to multiple dimensions of food security—availability (through productivity enhancement), access (through income growth and formal employment), and stability (through climate-resilient intercropping). However, the translation of production and income gains into improved dietary diversity and nutrition outcomes is not automatic; it is mediated by intra-household dynamics, market access, and health factors that were not directly measured in the available data. Distributional outcomes, including the risk of elite capture in technology demonstration programs, remain an area requiring further scrutiny. These effects reinforce each other, forming a virtuous cycle of “responsibility input–social appropriacy–development space–continuous investment”, which promotes the common development of enterprises and host countries. The performance of increasing maize yield by two to three times in Tanzania and the development of variety selection and supporting technology in Benin are concrete manifestations of this virtuous cycle.

• The sustainability of responsible investment is subject to the degree of coupling among enterprise resource capacity, host country institutional environment, and home country policy support. The pressure of responsibility costs and resource capacity tension at the enterprise level, the uncertainty of the institutional environment and structural constraints at the host country level, and the lack of policy coordination and support system shortcomings at the home country level intertwine to form systemic risks. When any link in these triple challenges has shortcomings, the sustainability of responsible investment will face significant challenges. The financial pressure of the factory hospital in the case of China Agricultural Development is a typical reflection of the interaction among these three challenges.

8.2 Theoretical contribution

The theoretical contributions of this paper are mainly reflected in the following aspects: (1) the institutional distance theory is introduced into the research on the internationalization of agricultural enterprises, and the analytical framework of “institutional distance–embedded responsibility–legitimacy” is constructed. Existing research on institutional distance mainly focuses on manufacturing and service industries, but pays less attention to the unique aspects of agricultural investment. This paper reveals the specific institutional challenges faced by agricultural multinational enterprises and systematically analyzes the mechanism of embedded responsibility strategy to address institutional distance, thereby expanding the application boundary of institutional theory in the agricultural field. (2) This paper deepens the understanding of the concept of responsible investment. Most existing research regards responsible investment as an extension of corporate social responsibility, emphasizing its “compliance” and “philanthropy” aspects. This study shows that the core of responsible investment is “embeddedness”: through production embeddedness, community embeddedness, and development embeddedness, the corporate mission is deeply integrated with the development of the host country. Such embeddedness is not only a strategic choice but also a strategic necessity. (3) This paper refines the “three-layer embedding” mechanism of responsible investment in agricultural enterprises. This mechanism reveals the evolution path of responsible investment from basic to fundamental and provides a new analytical tool for understanding how agricultural multinational enterprises obtain legitimacy.

8.3 Implications for practice

The case of CADG has the following practical implications for Chinese agricultural enterprises looking to “go global”: (1) Bring institutional distance management into the core agenda of the internationalization strategy. The overseas investment of agricultural enterprises should not only focus on resource acquisition and market development but also systematically evaluate institutional distance at the three levels of regulation, norm, and cognition, and formulate targeted embedding strategies. (2) Responsible investment should shift from cost thinking to strategic embeddedness thinking. Responsible investment is not simply a cost expenditure but a strategic investment in long-term legitimacy—it reduces policy risks at the regulatory level, garners community support at the normative level, and shapes a favorable development environment at the cognitive level. (3) Build embeddedness to adapt to agricultural characteristics. The deep community embeddedness of agricultural investment requires enterprises to establish local operational capabilities, including hiring and systematically training local employees, transforming technology transfer into capacity building, forming a benefit-sharing mechanism with communities, and promoting gradual renewal of development concepts while respecting local traditions. (4) Build a support network for responsible investment. Enterprises should excel at integrating the resources of governments, research institutions, international organizations, and other parties to create a multi-party responsibility network and enhance the sustainability of responsible investment.

8.4 Research limitations and future prospects

The research limitations of this paper mainly include the following aspects. First, data acquisition limitations. As a case study, this paper primarily relies on public data and existing research literature, and does not conduct field research or in-depth interviews. Moreover, while the manuscript reports quantitative performance improvements (e.g., maize yield increases of 40.4 to 106.3% in Benin), it lacks direct dietary diversity, nutrition, or anthropometric indicators necessary for a complete food utilization assessment; the analysis of nutrition outcomes is therefore suggestive rather than definitive. The non-randomized selection of demonstration households introduces potential selection bias that limits causal attribution of income and yield gains. Second, there is a lack of critical discussion on implementation challenges. The current case description tends to read like a corporate success story, with insufficient discussion of the practical resistance, conflicts, or failures that CADG may have encountered during the initial stages of embeddedness, such as tensions with local communities over land use, resistance from local farmers to new agricultural techniques, or difficulties in organizational adaptation. Third, there is a limitation regarding conclusion extrapolation. As a central enterprise, CADG’s resource acquisition capacity, policy support, and strategic positioning differ significantly from those of general agricultural enterprises. The generalizability of the findings needs to be tested with more diverse cases.

Future research can be expanded in the following directions: (1) carry out multi-case comparative research. We suggest selecting agricultural enterprises of different ownership, sizes, and regions to compare their differences in responsible investment strategies and performance, revealing the key contextual factors affecting the effectiveness of responsible investment. (2) Conduct longitudinal tracking studies to investigate the dynamic evolution path of responsible investment from “embeddedness” to “symbiosis.” The case of CADG has shown a progressive track from production embeddedness to community embeddedness and then to development embeddedness, but the specific mechanism, key turning points, and organizational learning processes of this transition still need further study. (3) Carry out quantitative empirical research. It is suggested to measure variables such as institutional distance, embedded responsibility, business performance, and social performance, construct structural equation models or panel data models, and test the universality of theoretical hypotheses. (4) Deepen the cross-study of responsible investment and institutional entrepreneurship. Responsible investment is not only a passive response to institutional pressure but also an active process of institutional entrepreneurship. How the role of institutional entrepreneurship is realized, the challenges it faces, and its impacts are worthy of further study. (5) Conduct comparative research on responsible investment in different countries. There are significant differences in institutional environments among countries in Africa, and the practices of CADG in Tanzania and Benin have initially shown the differences in coping strategies. In the future, this research can be extended to more countries to systematically analyze how the characteristics of institutional environments affect the selection and performance of responsible investment strategies. (6) Assess the long-term financial sustainability of responsible investment interventions. While the case evidence convincingly shows that CSR interventions translate into legitimacy, the long-term financial viability of these social interventions requires more rigorous evaluation. Future research should examine the cost–benefit dynamics of responsible investment over extended time horizons, investigate how enterprises balance social responsibility expenditures with profitability under market fluctuations, and explore innovative financing mechanisms (e.g., blended finance, impact investing) that can sustain responsible practices without compromising enterprise survival. (7) Incorporate household-level dietary diversity scores, food consumption scores, and anthropometric indicators into project monitoring and evaluation frameworks to enable rigorous assessment of food utilization and nutrition outcomes. (8) Conduct systematic socioeconomic profiling of project participants versus non-participants to evaluate the distributional equity of technology transfer and livelihood enhancement programs, with particular attention to gender, wealth quintile, and land tenure status. (9) Employ mixed-methods approaches, including in-depth interviews and focus group discussions with local farmers, community leaders, women’s groups, and marginalized populations, to capture the lived experiences and perceptions of responsible investment from the host community perspective.

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