The impact of formal and informal institutional distances on MNE corporate social performance

Dawn L. Keig, Lance Eliot Brouthers and Victor B. Marshall

International Business Review, 2019, vol. 28, issue 5, -

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) (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:28:y:2019:i:5:12

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DOI: 10.1016/j.ibusrev.2019.05.004

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