How Corporate Social Responsibility Helps MNEs to Improve their Reputation. The Moderating Effects of Geographical Diversification and Operating in Developing Regions

Abstract

Multinational enterprises (MNEs) can enhance their reputations through advanced social initiatives and management practices. These firms often locate facilities in developing countries to benefit from lax environmental and social regulations, and to reduce their operating costs. MNEs can, however, also contribute positively to the development of those countries through corporate social responsibility (CSR) activities. This paper argues that MNEs operating in developing regions can enhance their level of corporate reputation through the implementation of CSR initiatives that meet specific stakeholders' expectations of the firm's activities in these areas. In addition, we argue that MNEs with units based in different regions strengthen the impact of corporate social performance on corporate reputation. Based on a sample of 113 US MNEs from the chemical, energy, and industrial machinery industries over the period 2005-2010, our findings show that CSR has a positive effect on corporate reputation. In addition, MNEs' operations in developing regions intensify the positive relationship between corporate social performance and reputation, although geographical diversification does not necessarily enhance MNEs' reputation through corporate social performance.

Corporate Social Responsibility, the Atmospheric Environment, and Technological Innovation Investment

“…When the atmospheric environment deteriorates, the public pressure faced by enterprises will also increase. Consequently, enterprises must strengthen their social responsibilities if they wish to establish a good image [38]. Therefore, when the atmospheric environment is poor, the relationship between CSR and technological innovation investment will be weaker.…”

“…By developing high-technology alternatives or improving resource utilization, enterprises can reduce their consumption of natural resources. This reduces emissions while at the same time improving the enterprise's social reputation and increasing consumer satisfaction [37,38]. Studies have shown that when pollution of the atmosphere rises, the government will tend to strengthen environmental regulation and enterprises will pay more attention to the atmospheric environment for this reason [39].…”

The triple bottom line and organizational attractiveness ratings: The role of pro‐environmental attitude

“…We argue that proenvironmental attitude is particularly relevant with regard to the environmental performance dimension of the triple bottom line and, therefore, might benefit perceptions of fit. Relatedly, Aguilera-Caracuel and Guerrero-Villegas (2017) showed that CSR activities positively influenced corporate reputation in a sample of 113 US-based, multinational enterprises. The importance of individuals' attitudes for employer attractiveness has already been demonstrated by Klimkiewicz and Oltra (2017), who showed that attitudes toward an organization's corporate social responsibility (CSR) influence how job seekers interpret information related to a company's CSR and eventually the perceived attractiveness of the organization.…”

The (in)congruence of measures of corporate social responsibility performance and stakeholder measures of corporate social responsibility reputation

“…A central proposition of the “business case” for CSR is that a company's sustainability practices and social and governance activities are linked to corporate reputation (Aguilera‐Caracuel & Guerrero‐Villegas, ; Odriozola & Baraibar‐Diez, ), which in turn influences consumers' purchasing behavior and the business' bottom line (Bear, Rahman, & Post, ; Maden, Arikan, Telci, & Kantur, ; Martinez & Rodriguez del Bosque, ; Park, Lee, & Kim, ; Truscott, Bartlett, & Tywoniak, ). Recent national and global surveys of consumers, for example, report that the CSR profile of a company plays a large part in consumers' intentions to purchase as well as boycott certain products and certain companies (Reputation Institute, ).…”