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The impact of formal and informal institutional distances on MNE corporate social performance
Institution:1. School of Business, Whitworth University, 300 W Hawthorne Road, Spokane, WA, 99251, USA;2. Department of Management and Entrepreneurship, Coles College of Business, Kennesaw State University, 560 Parliament Garden Way, MD #0404, Kennesaw, GA, 30144, USA;3. Wright School of Business, Dalton State, 650 College Drive, Dalton, GA, 30720, USA;1. School of Management, University of Michigan-Flint, 2104 Riverfront, Flint, MI, 48502, USA;2. Romain College of Business ? BEC 2089, University of Southern Indiana, 8600 University Boulevard, Evansville, IN 47712, USA;3. School of Business, University of Houston-Victoria, 14000 University Blvd, Sugar Land, TX 77479, USA;1. Department of Management, University of Miami, Coral Gables, FL 33124, United States;2. Sun Yat-Sen University Business School, Guangzhou, China;1. College of Business, Illinois State University, 345 SFHB, Normal, IL, 61790-5580, USA;2. Indian Institute of Management, Tiruchirappalli, Tamil Nadu, 620 015, India;3. Department of Management, Ca’ Foscari University of Venice, Cannaregio 873, San Giobbe, 30121, Venice (VE), Italy;1. Durham University Business School, Mill Hill Lane, Durham, DH1 3LB, United Kingdom;2. NEOMA Business School, 59 rue Pierre Taittinger, 51100, Reims, France
Abstract:Can host country selection affect the corporate social performance (CSP) of multinational enterprises (MNEs)? Using institutional distance as our theoretical lens, we propose and empirically examine the notion that greater institutional diversity can have disparate influences on the social performance of different types of MNEs. We conceptualize each MNE as a unique portfolio of locations and use that “footprint” to examine the impact of formal and informal institutional distances on CSP. We hypothesize and find (1) a moderating influence of greater formal institutional distance in the MNE portfolio that slows the rate of increased benefits associated with greater international scope; and (2) a direct influence of greater informal institutional distance that lowers the overall levels of CSP independent of the international scope of the MNE. Managerial implications for international location selection are discussed.
Keywords:Multinational enterprise (MNE)  Institutional theory  Institutional distance  Institutional environment  Corporate social performance (CSP)  Corporate social responsibility (CSR)
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