The Impact of Corporate Social Performance on a Firm’s Multinationality |
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Authors: | Cyril Bouquet Yuval Deutsch |
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Institution: | (1) Schulich School of Business, York University, 4700 Keele Street, Toronto, ON, Canada, M3J1P3 |
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Abstract: | Using panel data of 4,244 company years, we examine whether and how corporate social performance (CSP) affects a firm’s capacity
to achieve profitable sales in foreign markets. Based on our extension of instrumental stakeholder theory into the international
arena, we hypothesized a U-shaped relationship between CSP and multinationality. Results supported our contention that multinational
enterprises (MNEs) need to be substantially committed to social performance objectives if they are to recoup the cost of their
CSP investments, and improve their capacity to compete in foreign markets. MNEs engaged in intermediate levels of CSP achieve
lower levels of multinationality than firms operating at either anchor of the social performance continuum. In addition, this
study demonstrates that CSP moderates a well-established relationship in international business literature – the relationship
between R&D investment and a firm’s multinationality. Implications for research and practice are discussed. |
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Keywords: | corporate social performance international business multinationality |
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