EURAM Annual Conference - EURAM 2023, Dublin (Ireland). 14-16 June 2023
Summary:
Multinational Enterprises (MNEs) build a reputation across their host countries using Corporate Social Responsibility (CSR). Corporate reputation results from the host country stakeholders’ judgment on the reliability of MNEs’ CSR signals. Institutional factors can be decisive in these assessments. We focus on the institutional distance between home and host countries. We argue that MNEs’ CSR signals tend to lose reliability to the host country stakeholders as the institutional distance widens. We empirically test our hypotheses on a panel of MNEs’ subsidiaries operating in Latin America. We use a multi-stakeholder indicator of local reputation representing the host country’s stakeholders. Additionally, we use country-level, firm-level, and subsidiary-level variables, including one variable built using big data. Results show that institutional distance dilutes the effect of MNEs’ CSR on subsidiaries’ reputations.
Spanish layman's summary:
La reputación local de las multinacionales derivada de la Responsabilidad Social Corporativa (RSC) depende de la distancia institucional. Los resultados sobre filiales en Latam muestran que la distancia institucional reduce la confiabilidad de en las señales de RSC, diluyendo su efecto reputacional.
English layman's summary:
The local reputation of multinationals derived from Corporate Social Responsibility (CSR) depends on institutional distance. Results on subsidiaries in Latam show that institutional distance reduces the reliability of CSR signals, diluting their reputational effect.
Keywords: Institutions; Corporate Social Responsibility; reputation; institutional distance; emerging countries; ESG; Signaling theory; Big data.
Published in EURAM 2023, ISBN: 978-2-9602195-5-5
Publication date: 2023-06-16.
Citation:
F.J. Forcadell, J.J. Nájera-Sánchez, E. Aracil, F. Úbeda, So good but so far away? How institutional distance shape subsidiaries’ reputation building from multinationals’ corporate social responsibility, EURAM Annual Conference - EURAM 2023, Dublin (Ireland). 14-16 June 2023. In: EURAM 2023: Conference proceedings, e-ISBN: 978-2-9602195-5-5
