Escaping the iron cage: Liabilities of origin and CSR reporting of emerging market multinational enterprises

Valentina Marano (), Peter Tashman and Tatiana Kostova
Additional contact information
Valentina Marano: D’Amore-McKim School of Business, Northeastern University
Peter Tashman: School of Business Administration, Portland State University
Tatiana Kostova: Darla Moore School of Business, University of South Carolina

Journal of International Business Studies, 2017, vol. 48, issue 3, No 6, 386-408

Abstract: Abstract This article examines the link between the condition of institutional voids in emerging markets and the use of the practice of corporate social responsibility (CSR) reporting by emerging market multinational enterprises (EM-MNEs). Based on neo-institutional theory and in light of the specificity of emerging markets, we propose a positive relationship between institutional voids and CSR reporting. Home-country institutional voids push companies to internationalize as a way to escape the institutional constraints and inefficiencies in their own markets, but at the same time create legitimacy challenges for these companies abroad. In particular, EM-MNEs from less institutionally developed countries are likely to face liabilities of origin – negative perceptions in host countries about these firms’ willingness and ability to conduct legitimate business. CSR reporting is an effective strategy to overcome such liabilities and barriers to legitimation as it conveys to host countries and global stakeholders alignment with global meta-norms and expectations. Internationalization, listing on developed country stock exchanges, and time, further magnify EM-MNEs’ legitimacy challenges and thus the use of CSR reporting to mitigate them. Our hypotheses are supported in a longitudinal study of 157 of the largest EM-MNEs ranked by the United Nations Conference on Trade and Development (UNCTAD) between 2004 and 2011.

Keywords: institutional theory; institutional voids; corporate social responsibility; emerging market multinationals; liabilities of origin; legitimacy (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (180)

Downloads: (external link)
http://link.springer.com/10.1057/jibs.2016.17 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:jintbs:v:48:y:2017:i:3:d:10.1057_jibs.2016.17

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2

DOI: 10.1057/jibs.2016.17

Access Statistics for this article

Journal of International Business Studies is currently edited by John Cantwell

More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().