Title: MNEs' corporate social responsibility: an optimal investment decision model

Authors: Won-Yong Oh; Kyoung Jin Choi; Young Kyun Chang; Moo-Kyeong Jeon

Addresses: Lee Business School, University of Nevada, Las Vegas, 4505 S Maryland Pkwy, Las Vegas, NV 89154, USA ' Haskayne School of Business, University of Calgary, 2500 University Drive NW, Calgary, AB T2N 1N4, Canada ' Sogang Business School, Sogang University, 35 Baekbeom-ro, Mapo-gu, Seoul, South Korea ' Sogang Business School, Sogang University, 35 Baekbeom-ro, Mapo-gu, Seoul, South Korea

Abstract: Based on an assumption that corporate social responsibility (CSR) is an investment decision, we provide a theoretical model that suggests how multinational enterprises (MNEs) should optimally invest in CSR. Our model proposes the optimal timing (when) and level (how much) of CSR investment with an economic calculation of expected return and payoff uncertainty of CSR in local markets. We also specify various multi-level factors (i.e. individual, organisation, industry, and institution) that may affect the investment structure. Our model suggests that MNEs' CSR decisions can be understood as a strategic investment seeking the optimal economic outcomes depending on the expected return and payoff uncertainty in each foreign affiliate. This study contributes to the literature by integrating research streams that have been polarised over the issue of the necessity of CSR for MNEs, and by offering a more complete understanding of how MNEs should invest in CSR.

Keywords: CSR; corporate social responsibility; optimal investment; expected return; payoff uncertainty; multi-level perspective.

DOI: 10.1504/EJIM.2019.099422

European Journal of International Management, 2019 Vol.13 No.3, pp.307 - 327

Available online: 17 Apr 2019 *

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