Hostname: page-component-cd9895bd7-dk4vv Total loading time: 0 Render date: 2024-12-27T13:04:55.380Z Has data issue: false hasContentIssue false
  • English
  • Français

The Corporate Social Performance of Developing Country Multinationals

Published online by Cambridge University Press:  05 July 2016

Stelios Zyglidopoulos ,
Peter Williamson  and
Pavlos Symeou
Stelios Zyglidopoulos
Affiliation:
University of Glasgow
Peter Williamson
Affiliation:
University of Cambridge
Pavlos Symeou
Affiliation:
Cyprus University of Technology
Get access Rights & Permissions [Opens in a new window]

Abstract:

In this article, we explore the Corporate Social Performance (CSP) of Developing Country Multinationals (DMNCs). We argue that in competing internationally, DMNCs often face both reputation and legitimacy deficits, which they address by improving their CSP. We develop a series of hypotheses to explain the variation in CSP between DMNCs and domestic-only firms from developing countries and also examine variations in CSP between DMNCs depending on the extent of their multinationality and portfolio of host countries. Our findings support all our hypotheses, which suggest that DMNCs display enhanced levels of CSP compared to their domestic-only counterparts. CSP is also found to be positively related to the DMNCs’ degree of multinationality, but with a declining incremental impact, whereas entry into developed markets leads to a greater improvement in DMNCs’ CSP than expansion into developing markets. We highlight the implications of our findings for managers and researchers.

Keywords

Corporate Social PerformanceDeveloping Country Multinationals
Type
Special Section
Information
Business Ethics Quarterly , Volume 26 , Issue 3 , July 2016 , pp. 379 - 406
Copyright
Copyright © Society for Business Ethics 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Allison, P. D. 2012. Logistic regression using SAS: Theory and application. Cary, NC: SAS Institute.Google Scholar
Ashforth, B. E., & Gibbs, B. W. 1990. The double-edge of organizational legitimation. Organization Science, 1: 177–194.CrossRefGoogle Scholar
Aulakh, P. S., Rotate, M., & Teegen, H. 2000. Export strategies and performance of firms from emerging economies: Evidence from Brazil, Chile, and Mexico. Academy of Management Journal, 43: 342–361.CrossRefGoogle Scholar
Barin Cruz, L., Boehe, D. M., & Ogasavara, M. H. 2015. CSR-based differentiation strategy of export firms from developing countries: An exploratory study of the strategy tripod. Business & Society, 54: 723–762.CrossRefGoogle Scholar
Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17: 99–120.CrossRefGoogle Scholar
Baskin, J. 2006. Corporate responsibility in emerging markets. Journal of Corporate Citizenship, 24: 29–47.Google Scholar
Belsley, D. A. 1984. Demeaning conditioning diagnostics through centering. The American Statistician, 38: 73–77.Google Scholar
Bhanji, Z., & Oxley, J. E. 2013. Overcoming the dual liability of foreignness and privateness in international corporate citizenship partnerships. Journal of International Business Studies, 44: 290–311.CrossRefGoogle Scholar
Bilkey, W. J., & Nes, E. 1982. Country-of-origin effects on product evaluations. Journal of International Business Studies, 13: 89–100.Google Scholar
Bowman, E. H. 1975. A strategic posture toward corporate social responsibility. California Management Review (pre-1986), 18(2): 49.CrossRefGoogle Scholar
Brammer, S., & Millington, A. 2005. Corporate reputation and philanthropy: An empirical analysis. Journal of Business Ethics, 61: 29–44.CrossRefGoogle Scholar
Brown, T. J., & Dacin, P. A. 1997. The company and the product: Corporate associations and consumer product responses. Journal of Marketing, 61: 68–84.CrossRefGoogle Scholar
Campbell, J. T., Eden, L., & Miller, S. R. 2012. Multinationals and corporate social responsibility in host countries: Does distance matter? Journal of International Business Studies, 43: 84–106.Google Scholar
Cavusgil, S. T. 1980. On the internationalization process of firms. European Research, 8: 273–281.Google Scholar
Chambers, E., Chapple, W., Moon, J., & Sullivan, M. 2003. CSR in Asia: A seven country study of CSR website reporting . Working paper no 09–2003, International Centre for Corporate Social Responsibility, Nottingham.Google Scholar
Chapple, W., & Moon, J. 2005. Corporate Social Responsibility (CSR) in Asia: A seven-country study of CSR web site reporting. Business & Society, 44: 415–441.Google Scholar
Chapple, W., & Moon, J. 2007. CSR agendas for Asia. Corporate Social Responsibility and Environmental Management, 14: 183–188.CrossRefGoogle Scholar
Cheng, B., Ioannou, I., & Serafeim, G. 2014. Corporate social responsibility and access to finance. Strategic Management Journal, 35: 1–23.CrossRefGoogle Scholar
Chinen, K., Jun, M., & Hampton, G. M. 2000. Product quality, market presence, and buying behavior: Aggregate images of foreign products in the US. Multinational Business Review, 8: 29–38.Google Scholar
Cordell, V. V. 1993. Interaction effects of country of origin with branding, price, and perceived performance risk. Journal of International Consumer Marketing, 5(2): 5–20.CrossRefGoogle Scholar
Cuervo-Cazurra, A., & Genc, M. 2008. Transforming disadvantages into advantages: developing-country MNEs in the least developed countries. Journal of International Business Studies, 39: 957–979.Google Scholar
Darby, M. R., & Karni, E. 1973. Free competition and the optimal amount of fraud. Journal of Law and Economics, 16: 67–88.Google Scholar
Deephouse, D. L. 2000. Media reputation as a strategic resource: An integration of mass communication and resource-based theories. Journal of Management, 26: 1091–1112.Google Scholar
Deephouse, D. L., & Carter, S. M. 2005. An examination of differences between organizational legitimacy and organizational reputation. Journal of Management Studies, 42: 329–360.CrossRefGoogle Scholar
Deng, P. 2009. Why do Chinese firms tend to acquire strategic assets in international expansion? Journal of World Business, 44: 74–84.CrossRefGoogle Scholar
Deng, P. 2012. The internationalization of Chinese firms: A critical review and future research. International Journal of Management Reviews, 14: 408–427.Google Scholar
Dierickx, I., & Cool, K. 1989. Asset stock accumulation and the sustainability of competitive advantage: Reply. Management Science, 35: 1514.Google Scholar
Doh, J. P., & Guay, T. R. 2006. Corporate social responsibility, public policy, and NGO activism in Europe and the United States: An institutional-stakeholder perspective. Journal of Management Studies, 43: 47–73.Google Scholar
Donaldson, T. 1996. Values in tension: Ethics away from home. Harvard Business Review, 74(5): 48–62.Google Scholar
Dowell, G., Hart, S., & Yeung, B. 2000. Do corporate global environmental standards create or destroy market value? Management Science, 46: 1059–74.CrossRefGoogle Scholar
Du, S., & Vieira, E. T Jr. 2012. Striving for legitimacy through corporate social responsibility: Insights from oil companies. Journal of Business Ethics, 110: 413–427.CrossRefGoogle Scholar
Ettenson, R., & Gabrielle Klein, J. 2005. The fallout from French nuclear testing in the South Pacific: A longitudinal study of consumer boycotts. International Marketing Review, 22: 199–224.Google Scholar
Etzioni, A. 2000. Social norms: Internalization, persuasion, and history. Law and Society Review, 34: 157–178.CrossRefGoogle Scholar
Fombrun, C., & Shanley, M. 1990. What’s in a name? Reputation building and corporate strategy. Academy of Management Journal, 33: 233–258.Google Scholar
Fombrun, C. J. 1996. Reputation: Realizing value from the corporate image. Cambridge, MA: Harvard Business School Press.Google Scholar
Fukuyama, F. 2000. Trust: The social virtues and the creation of prosperity. Collingdale, PA: Diane Publishing Company.Google Scholar
Gardberg, N. A., & Fombrun, C. 2006. Corporate citizenship: Creating intangible assets across institutional environments. Academy of Management Review, 31: 329–346.CrossRefGoogle Scholar
Gaur, A. S., Kumar, V., & Sarathy, R. 2011. Liability of foreignness and internationalisation of emerging market firms. Advances in International Management, 24: 211–233.Google Scholar
Graafland, J. J. 2002. Profits and principles: Four perspectives. Journal of Business Ethics, 35: 293–305.Google Scholar
Granger, C. W. J. 1969. Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37: 424–438.Google Scholar
Gugler, P., & Shi, J. Y. 2009. Corporate social responsibility for developing country multinational corporations: Lost war in pertaining global competitiveness? Journal of Business Ethics, 87: 3–24.Google Scholar
Guillén, M. F., & García-Canal, E. 2009. The American model of the multinational firm and the “new” multinationals from emerging economies. The Academy of Management Perspectives, 23(2): 23–35.Google Scholar
Gunningham, N., Kagan, R. A., & Thornton, D. 2004. Social license and environmental protection: Why businesses go beyond compliance. Law & Social Inquiry, 29: 307–341.Google Scholar
Hall, R. 1992. The strategic analysis of intangible resources. Strategic Management Journal, 13: 135–144.CrossRefGoogle Scholar
Handelman, J. M., & Arnold, S. J. 1999. The role of marketing actions with a social dimension: Appeals to the institutional environment. Journal of Marketing, 63(3): 33–48.CrossRefGoogle Scholar
Harris, J. D., Moriarty, B., & Wicks, A. C. 2014. Public trust in business. Cambridge, UK: Cambridge University Press.Google Scholar
Heugens, P. P., Van Riel, C., & Van Den Bosch, F. A. 2004. Reputation management capabilities as decision rules. Journal of Management Studies, 41: 1349–1377.Google Scholar
Hitt, M. A., Hoskisson, R. E., & Kim, H. 1997. International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management Journal, 40: 767–798.CrossRefGoogle Scholar
Hoskisson, R. E., Wright, M., Filatotchev, I., & Peng, M. W. 2013. Emerging multinationals from mid-range economies: The influence of institutions and factor markets. Journal of Management Studies, 50: 1295–1321.CrossRefGoogle Scholar
Hymer, S. 1976. The international operations of national firms: A study of direct foreign investment. Cambridge, MA: MIT Press.Google Scholar
Ioannou, I., & Serafeim, G. 2012. What drives corporate social performance? The role of nation-level institutions. Journal of International Business Studies, 43: 834–864.Google Scholar
Jaffe, E. D., & Nebenzahl, I. D. 2006. National image & competitive advantage: The theory & practice of place branding, 2 nd edition. Frederiksberg: Samfundslitterature Press.Google Scholar
Jamali, D., & Mirshak, R. 2007. Corporate social responsibility (CSR): Theory and practice in a developing country context. Journal of Business Ethics, 72: 243–262.Google Scholar
Johanson, J., & Vahlne, J.-E. 1977. The internationalization process of the firm - A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8: 23–32.Google Scholar
Johanson, J., & Vahlne, J.-E. 2009. The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40: 1411–1431.CrossRefGoogle Scholar
Jones, G. H., Jones, B. H., & Little, P. 2000. Reputation as reservoir: Buffering against loss in times of economic crisis. Corporate Reputation Review, 3: 21–29.CrossRefGoogle Scholar
Kostova, T. 1999. Transnational transfer of strategic organizational practices: A contextual perspective. Academy of Management Review, 24: 308–324.Google Scholar
Kostova, T., & Zaheer, S. 1999. Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review, 24: 64–81.Google Scholar
Kotabe, M., Srinivasan, S. S., & Aulakh, P. S. 2002. Multinationality and firm performance: The moderating role of R&D and marketing capabilities. Journal of International Business Studies, 33: 79–97.Google Scholar
Kotler, P., Haider, D., & Rein, I. 1993. Marketing places: Attracting investment, industry, and tourism to cities, states and nations. New York: Simon & Schuster.Google Scholar
Lawrence, T. B. 1998. Examining resources in an occupational community: Reputation in Canadian forensic accounting. Human Relations, 51: 1103–1131.Google Scholar
Lindsay, J. R. 2015. The impact of China on cybersecurity: Fiction and friction. International Security, 39(3): 7–47.Google Scholar
Loo, T., & Davies, G. 2006. Branding China: The ultimate challenge in reputation management? Corporate Reputation Review, 9: 198–210.Google Scholar
Luo, Y., & Tung, R. L. 2007. International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38: 481–498.Google Scholar
Makino, S., Lau, C.-M., & Yeh, R.-S. 2002. Asset-exploitation versus asset-seeking: Implications for location choice of foreign direct investment from newly industrialized economies. Journal of International Business Studies, 33: 403–421.Google Scholar
Margolis, J. D., & Walsh, J. P. 2003. Misery loves companies: Rethinking social initiatives by business. Administrative Science Quarterly, 48: 268–305.CrossRefGoogle Scholar
Mathews, J. A. 2006. Dragon multinationals: New players in 21st century globalization. Asia Pacific Journal of Management, 23: 5–27.CrossRefGoogle Scholar
McWilliams, A., & Siegel, D. 2000. Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21: 603–609.3.0.CO;2-3>CrossRefGoogle Scholar
Merz, M. A., Peloza, J., & Chen, Q. 2010. Standardization or localization? Executing corporate philanthropy in international firms. International Journal of Nonprofit and Voluntary Sector Marketing, 15: 233–252.Google Scholar
Meyer, K. E., & Thaijongrak, O. 2013. The dynamics of emerging economy MNEs: How the internationalization process model can guide future research. Asia Pacific Journal of Management, 30: 1125–1153.Google Scholar
Mezias, J. M. 2002. Identifying liabilities of foreignness and strategies to minimize their effects: The case of labor lawsuit judgments in the United States. Strategic Management Journal, 23: 229–244.Google Scholar
Morck, R., Yeung, B., & Zhao, M. 2008. Perspectives on China’s outward foreign direct investment. Journal of International Business Studies, 39: 337–350.Google Scholar
Nachum, L. 2010. When is foreignness an asset or a liability? Explaining the performance differential between foreign and local firms. Journal of Management, 36: 714–739.Google Scholar
Nelson, P. 1970. Information and consumer behavior. The Journal of Political Economy, 78: 311–329.Google Scholar
Noorderhaven, N. G., & Harzing, A.-W. 2003. The “country-of-origin effect” in multinational corporations: Sources, mechanisms and moderating conditions. Management and International Review, 43(2): 47–66.Google Scholar
Orlitzky, M., Schmidt, F. L., & Rynes, S. L. 2003. Corporate social and financial performance: A meta-analysis. Organization Studies, 24: 403–441.Google Scholar
Panwar, R., Paul, K., Nybakk, E., Hansen, E., & Thompson, D. 2014. The legitimacy of CSR actions of publicly traded companies versus family-owned companies. Journal of Business Ethics, 125: 481–496.CrossRefGoogle Scholar
Petersen, B., & Pedersen, T. 2002. Coping with liability of foreignness: Different learning engagements of entrant firms. Journal of International Management, 8: 339–350.Google Scholar
Petersen, B., Pedersen, T., & Lyles, M. A. 2008. Closing knowledge gaps in foreign markets. Journal of International Business Studies, 39: 1097–1113.Google Scholar
Pfau, M., Haigh, M. M., Sims, J., & Wigley, S. 2008. The influence of corporate social responsibility campaigns on public opinion. Corporate Reputation Review, 11: 145–154.Google Scholar
Prahalad, C. K. 2006. The fortune at the bottom of the pyramid. New Delhi: Pearson Education India.Google Scholar
Rabe-Hesketh, S., & Skrondal, A. 2012. Multilevel and longitudinal modeling using Stata. College Station, TX: Stata Press Books.Google Scholar
Ramamurti, R. 2012. What is really different about emerging market multinationals? Global Strategy Journal, 2: 41–47.Google Scholar
Ramamurti, R., & Singh, J. V. 2009. Emerging multinationals in emerging markets. Cambridge: Cambridge University Press.Google Scholar
Rao, H. 1994. The social construction of reputation: Certification contests, legitimation, and the survival of organizations in the American automobile industry: 1895–1912. Strategic Management Journal, 15: 29–44.Google Scholar
Rehbein, K., Waddock, S., & Graves, S. B. 2004. Understanding shareholder activism: Which corporations are targeted? Business & Society, 43: 239–267.Google Scholar
Roberts, P. W., & Dowling, G. R. 2002. Corporate reputation and sustained superior financial performance. Strategic Management Journal, 23: 1077–1093.Google Scholar
Rowley, T. I., & Moldoveanu, M. 2003. When will stakeholder groups act? An interest- and identity-based model of stakeholder group mobilization. Academy of Management Review, 28: 204–219.CrossRefGoogle Scholar
Ruef, M., & Scott, W. R. 1998. A multidimensional model of organizational legitimacy: Hospital survival in changing institutional environments. Administrative Science Quarterly, 4: 877–904.Google Scholar
Rui, H., & Yip, G. S. 2008. Foreign acquisitions by Chinese firms: A strategic intent perspective. Journal of World Business, 43: 213–226.Google Scholar
Schnietz, K. E., & Epstein, M. J. 2005. Exploring the financial value of a reputation for corporate social responsibility during a crisis. Corporate Reputation Review, 7: 327–345.Google Scholar
Shapiro, C. 1983. Premiums for high quality products as returns to reputations. The Quarterly Journal of Economics, 98: 659–679.Google Scholar
Siegel, D. S., & Vitaliano, D. F. 2007. An empirical analysis of the strategic use of corporate social responsibility. Journal of Economics & Management Strategy, 16: 773–792.Google Scholar
Smith, R. 2013. How to sell Coke to people who have never had a sip. http://www.npr.org/sections/money/2013/06/07/189184092/ (Accessed: Oct. 13, 2015).Google Scholar
Suchman, M. C. 1995. Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20: 571–610.Google Scholar
Teegen, H., Doh, J. P., & Vachani, S. 2004. The importance of nongovernmental organizations (NGOs) in global governance and value creation: An international business research agenda. Journal of International Business Studies, 35: 463–483.Google Scholar
Thompson, P., & Zakaria, Z. 2004. Corporate social responsibility reporting in Malaysia. Journal of Corporate Citizenship, 13: 125–136.Google Scholar
Tseng, C.-H., Tansuhaj, P., Hallagan, W., & McCullough, J. 2007. Effects of firm resources on growth in multinationality. Journal of International Business Studies, 38: 961–974.Google Scholar
Turban, D. B., & Greening, D. W. 1997. Corporate social performance and organizational attractiveness to prospective employees. Academy of Management Journal, 40: 658–672.Google Scholar
Ullmann, A. A. 1985. Data in search of a theory: A critical examination of the relationships among social performance, social disclosure, and economic performance of US firms. Academy of Management Review, 10: 540–557.Google Scholar
UNCTAD 2014. World Investment Report 2014. United Nations.Google Scholar
Verlegh, P. W., & Steenkamp, J.-B. E. 1999. A review and meta-analysis of country-of-origin research. Journal of Economic Psychology, 20: 521–546.Google Scholar
Visser, W. 2008. Corporate social responsibility in developing countries. In Crane, A., Matten, D., McWilliams, A., Moon, J., & Siegel, D. S. (Eds.), The Oxford handbook of corporate social responsibility: 473–479. Oxford: Oxford University Press.Google Scholar
Waddock, S. A., & Graves, S. B. 1997. The corporate social performance. Strategic Management Journal, 8: 303–319.Google Scholar
Walter, B. L. 2013. Does corporate social responsibility really contribute to reputation? In Baybars-Hawks, B., & Samast, O. (Eds.), New Challenges, New Opportunities: Interdisciplinary Perspectives on Reputation Management: 55–63. Ankara, Turkey: Reputation Management Institute of Turkey.Google Scholar
Williamson, P. J., Ramamurti, R., Fleury, A., & Fleury, M. T. L. 2013. The competitive advantage of emerging market multinationals. Cambridge: Cambridge University Press.Google Scholar
Williamson, P. J., & Zeng, M. 2009. Chinese multinationals: Emerging through new global gateways. In Ramamurti, R., & Singh, J. V. (Eds.), Emerging multinationals in emerging markets: 81–109. Cambridge: Cambridge University Press.Google Scholar
Wokutch, R. E. 2001. Nike and its critics. Organization and Environment, 14: 207–237.Google Scholar
Wood, D. J. 1991. Corporate social performance revisited. Academy of Management Review, 16: 691–718.Google Scholar
Wooldridge, J. M. 2010. Econometric analysis of cross section and panel data. Cambridge, MA: MIT Press.Google Scholar
Zaheer, S. 1995. Overcoming the liability of foreignness. Academy of Management Journal, 38: 341–363.Google Scholar
Zeng, M., & Williamson, P. J. 2007. Dragons at your door. Cambridge, MA: Harvard Business School Press.Google Scholar
Zyglidopoulos, S. C. 2002. The social and environmental responsibilities of multinationals: Evidence from the Brent Spar case. Journal of Business Ethics, 36: 141–151.Google Scholar
Zyglidopoulos, S. C., Georgiadis, A. P., Carroll, C. E., & Siegel, D. S. 2012. Does media attention drive corporate social responsibility? Journal of Business Research, 65: 1622–1627.Google Scholar