Foreign direct investments : the role of corporate social responsibility

Marshall, Andrew and McColgan, Patrick and Liu, Mei (2021) Foreign direct investments : the role of corporate social responsibility. Journal of Multinational Financial Management, 59. 100663. ISSN 1042-444X (https://doi.org/10.1016/j.mulfin.2020.100663)

[thumbnail of Marshall-etal-JMFM-2020-Foreign-direct-investments-the-role-of-corporate-social]
Preview
 Text. Filename: Marshall_etal_JMFM_2020_Foreign_direct_investments_the_role_of_corporate_social.pdf
Accepted Author Manuscript
License: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 logo
Download (1MB)| Preview

Abstract

This paper investigates whether superior corporate social responsibility (CSR) performance leads to greater firm-level foreign direct investment (FDI). We argue that the decisions managers take on their CSR can have a positive influence in the external perception of the firm and act as an important intangible asset. Using a sample of 4,764 firms from 44 countries spanning 2003-2014, we find evidence of a positive relation between CSR performance and the propensity to engage in FDI. The positive relation between CSR performance and FDI propensity is strongest for firms without prior international experience in FDI. Our results suggest that that a strong CSR reputation can act as important intangible asset and help firms’ internationalization by increasing external legitimacy and reputation. The results are robust to controls for endogeneity, alternative measures of international experience, and alternative model specifications.

ORCID iDs

Marshall, Andrew ORCID logoORCID: https://orcid.org/0000-0001-7081-1296, McColgan, Patrick ORCID logoORCID: https://orcid.org/0000-0002-7980-6175 and Liu, Mei;
  • Item type:Article
    ID code:74580
    Dates:
    Date
    Event
    31 March 2021
    Published
    14 November 2020
    Published Online
    6 November 2020
    Accepted
    Keywords:corporate social responisibility, foreign direct investment, multinational enterprises, Finance, Finance, Economics and Econometrics
    Subjects:Social Sciences > Finance
    Department:Strathclyde Business School > Accounting and Finance
    Depositing user: Pure Administrator
    Date deposited:11 Nov 2020 16:54
    Last modified:25 Jan 2023 08:29
    URI:https://strathprints.strath.ac.uk/id/eprint/74580
CORE (COnnecting REpositories)