Title: The effect of entry mode and geographic diversification on corporate social responsibility

Authors: Yung-Hwal Park; Seung H. Kim; Kevin Lehnert

Addresses: School of Business, Truman State University, 100 East Normal Street, Kirksville, MO 63501, USA ' John Cook School of Business, Saint Louis University, 3674 Lindell Boulevard, St. Louis, MO 63108, USA ' Seidman College of Business, Grand Valley State University, 40 Front Avenue, Grand Rapids, MI 49504, USA

Abstract: This study examines the effect of MNEs' choice of entry mode in foreign markets and geographic diversification on CSR, based upon the moderating effect of slack resources. Results suggest that firms with more wholly-owned subsidiaries compared to their total number of subsidiaries are generally more socially responsible than other firms. Geographic diversification was positively related to CSR. Slack resources significantly moderated the effect of geographic diversification on CSR when they were low, but the moderating effect was not significant when slack resources were moderate or high. The relationship between CSR and financial performance was found to be significant and positive when innovation and advertising were taken into account.

Keywords: corporate social responsibility; CSR; entry mode; geographic diversification; slack resources; cultural distance; MNEs; multinational enterprises; multinationals; foreign markets; market entry; wholly-owned subsidiaries; financial performance; innovation; advertising.

DOI: 10.1504/IJBE.2015.073179

International Journal of Business Environment, 2015 Vol.7 No.4, pp.327 - 346

Received: 20 May 2015
Accepted: 28 May 2015
Published online: 26 Nov 2015 *

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