Multinational companies and the corporate social responsibility at home: the stakeholder approach

Eun Woo Kim, Soonkyoo Choe, Jooyoung Kwak

Research output: Contribution to journalArticle

Abstract

Purpose: The purpose of this paper is to integrate stakeholder and international business (IB) theories to explore the relationship between the international diversification of emerging-market multinational corporations (EMNCs) and corporate social performance (CSP) in their home markets. While the IB literature generally assumes a positive effect from international diversification on CSP as a result of global learning, the study aims at investigating the complicated effects in the link to the stakeholder theory. Design/methodology/approach: This paper used combined sources of public survey data (corporate social responsibility (CSR) of the Korean firms) and archival data (foreign direct investment and corporate data). A truncated regression is used for statistical model. Findings: International diversification helps MNCs to enhance CSP in their home countries. Thus, EMNCs can develop CSR capabilities at the global level, thereby benefiting domestic stakeholders. Also, significant investment in domestic research and development (R&D) and advertising negatively moderates the relationship between international diversification and domestic CSP. In this regard, expanding R&D and advertising facilitates global competitiveness. Moreover, as international diversification increases, EMNCs may redirect resources and re-orient CSR policies toward foreign stakeholders. Consequently, the relationship between international diversification and domestic CSP weaken. Practical implications: Acceleration in international diversification may weaken domestic CSP, which arises from transformation into the global enterprises. Originality/value: The study highlights the difficulties of EMNCs in serving domestic stakeholders effectively when their businesses are increasingly internationalized.

Original languageEnglish
Pages (from-to)2383-2400
Number of pages18
JournalManagement Decision
Volume57
Issue number9
DOIs
Publication statusPublished - 2019 Oct 15

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All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)
  • Management Science and Operations Research

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