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.
| Original language | English |
|---|---|
| Number of pages | 12 |
| Journal | Review of International Economics |
| Early online date | 26 Sept 2017 |
| DOIs | |
| Publication status | Early online - 26 Sept 2017 |
Keywords
- Corporate social responsibility
- Multinational firms
- Foreign direct investment
- Exports
- Import tariffs
Access to Document
- Mitrokostas Publication RevIntEcon
This is the peer reviewed version of the following article: Manasakis C, Mitrokostas E, Petrakis E. Strategic corporate social responsibility by a multinational firm. Rev Int Econ. 2017;00:1–12, which has been published in final form at doi: 10.1111/roie.12320 . This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.