We examine how multinational corporations (MNC) international diversification (ID) is related to their corporate social responsibility (CSR) activities in the domestic market. We also investigate whether corporate governance, specifically the conglomerate (chaebol) structure, affects the relationship between ID and CSR activities in the domestic market. We perform empirical analysis using a sample of 606 firm-year observations of Korean-listed manufacturing MNCs from 2005 to 2010. We find that ID is negatively associated with CSR, and that this relationship is stronger for chaebol firms. These results are robust after controlling for various factors that affect measurements of ID. Our findings suggest that ID related to market diversification through exports and foreign affiliates appears to push MNCs to perform fewer CSR activities in the domestic market. Our findings also indicate that the effect of chaebol firms on the relationship between ID and CSR is greater than that of non-chaebol firms in Korean market. Our study contributes to the ID and CSR literature as the first study to provide empirical evidence on the association between ID and CSR activities in the domestic market for Korean firms using three aspects of ID measurement. Given that empirical evidence on this issue is very limited, our findings have implications for academics, practitioners, and policymakers in understanding the relationship between ID and CSR strategy.

This study investigates the effect of the COVID-19 global pandemic on the relationship between corporate social responsibility (CSR) and a firm’s sustainability. Prior studies on related topics empirically argue that CSR activities are highly likely to positively impact corporate sustainability. If this is true, firms that engage in CSR activities should demonstrate a higher degree of sustainability than their counterparts during the recent COVID-19 global pandemic. Using a sample of 390 Korean listed companies from 2019 to 2020, we find that CSR has no significant relationship with firm value variations as a proxy for sustainability during the COVID-19 global pandemic period. Our findings suggest that firms that engage in more active CSR activities do not appear to mitigate the market risk associated with the COVID-19 global pandemic compared to their counterparts who engage in less active CSR activities. That is, CSR does not provide a significant cushion that alleviates a firm’s market risk exposure, as heralded by COVID-19. Unlike previous studies that argue that CSR has positive effects on sustainability, our studies suggest that CSR’s impact on sustainability seems to be significantly lowered when uncontrollable market risks occur. It is important to note that this study has methodological limitations in that it was analyzed using proxy variables for CSR and sustainability measurement in Korea. For future studies, it would be insightful to expand the CSR concept to ESG and conduct research using longer-term data in the post-pandemic era.

We examined the relations between environmental, social, and governance (ESG) activities and the performance of subsidiaries of multinational corporations (MNCs). We further investigated the moderating effect of market-oriented organizational culture on the relationship between ESG and performance. Employing generalized least square regression analysis using survey data, we show that ESG activities of MNC subsidiaries are positively associated with financial and non-financial performance. These results suggest that ESG improves the financial and non-financial performance of subsidiaries. The test for the moderating effect of the market-oriented organizational culture shows that it weakens the positive relationship between ESG activities and financial performance. This could be due to the incongruous nature of the short-term focus of a market-oriented organizational culture versus the long-term orientation of the sustainability of ESG activities.

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