Formal and Informal Institutional Influences on Multinational Enterprise Social Responsibility: Two Empirical Studies

<p>How do environmental institutional influences in a multinational enterprise’s (MNE’s) portfolio of locations affect social responsibility (and irresponsibility)? To explore this question, I engaged in two complementary empirical research studies, each exploring a particular subset of the MNE portfolio environment-social responsibility dynamic.</p> <p>The first study applies the concept of institutional distance from the international business literature to examine how the differences in formal and informal institutional environments across a firm’s full portfolio of operating locations can affect its social performance. I hypothesize and find that firms with greater <em>informal</em> institutional distance within their locations will have lower overall levels of corporate social performance. I also suggest that greater average <em>formal</em> institutional distance within the MNE’s portfolio will moderate the social responsibility benefits associated with greater international scope. These hypotheses were tested and found to be supported using secondary data on a sample of 408 firms headquartered throughout Europe, Asia, and North America.</p> <p>The second study also explores the institutional environment of MNEs and social responsibility, but from a different perspective. This study looks at the influence of institutionalized <em>corruption</em> on firms’ corporate social <em>ir</em>responsibility (CSiR). Consistent with institutional theory, I conceptualize corruption as having both a formal and informal component and hypothesize that operating in portfolios of locations with greater formal and/or informal corruption environments may lead MNEs to have higher levels of social irresponsibility. Furthermore, I explore the relationship between irresponsible behavior and firm performance, finding that higher levels of firm CSiR are related to lower performance. Support for my social irresponsibility hypotheses was confirmed using a sample of 699 MNEs operating throughout the world.</p> <p>It has been noted that institutions matter to international business. These studies help us better understand the complex institutional environments of MNEs and <em>how</em> specific institutional environments can matter to MNE social responsibility-related outcomes, providing guidance related to country selection for MNE managers concerned about maintaining high corporate social performance and minimizing incidents of social irresponsibility in their firms.</p>

Name thesis:degree_name

Doctor of Business Administration (DBA)

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Management

Year dc:date.available

2013

Author dc:creator

• Keig, Dawn L.

Contributors dc:contributor

• Dr. Lance E. Brouthers
• Dr. Keith Brouthers
• Dr. Rajaram Veliyath

• environmental institutional influences
• multinationals
• social responsibility
• corruption
• business locations
• Business Administration, Management, and Operations

Repository record dc:identifier

https://digitalcommons.kennesaw.edu/etd/537

OAI identifier oai:identifier

oai:digitalcommons.kennesaw.edu:etd-1538