Strategic corporate social responsibility by a multinational firm

Constantine Manasakis, Evangelos Mitrokostas and Emmanuel Petrakis

No 246, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This paper investigates the determinants of a responsible multinational firm's decision to enter in a foreign country either through exports or through foreign direct investment (FDI), as well as the relevant market and societal outcomes. We find that CSR investments are higher under FDI than under exports. The multinational firm's incentives to serve the foreign country through FDI are increasing in the average consumer's valuation for CSR and in the intensity of the foreign country's market competition, but only if the average consumer's valuation for CSR in this country is sufficiently high. These incentives are mitigated by the multinational firm's liability in this country under exports. We also find that there is misalignment of preferences between the stakeholders of the two countries over the multinational firm's mode of entry in the foreign country.

Keywords: Corporate social responsibility; Multinational firms; Foreign direct investment; Exports; Import tariffs (search for similar items in EconPapers)
JEL-codes: D43 F13 F23 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-bec, nep-cse and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Strategic corporate social responsibility by a multinational firm (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:246

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