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Formal and informal institutional pressures on corporate social responsibility: A cross‐country analysis
Author(s) -
Tolmie Carri Reisdorf,
Lehnert Kevin,
Zhao Hongxin
Publication year - 2019
Publication title -
corporate social responsibility and environmental management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.519
H-Index - 73
eISSN - 1535-3966
pISSN - 1535-3958
DOI - 10.1002/csr.1844
Subject(s) - corporate social responsibility , business , multinational corporation , stakeholder , institutional theory , multilevel model , stakeholder theory , developing country , industrial organization , public relations , economics , economic growth , political science , finance , management , machine learning , computer science
This study examines the influences of cross‐country institutional pressures on multinational enterprises' corporate social responsibility (CSR). Building on institutional and stakeholder theory, we propose that different formal and informal environments have direct impacts on firm CSR. Specifically, we investigate informal institutions as they relate to self‐transcendent and self‐enhancement values. We propose that the firm's consideration of multiple stakeholder expectations moderates these complex formal and informal institutional relationships. Utilizing hierarchical linear modeling, this study analyzes institutional constraints on nearly 1,000 firms in 47 different countries. The empirical results reveal that informal values that are aligned with the firm's strategies and stakeholder desires have a strong impact on firms' CSR actions. Multiple stakeholder consideration strengthens this important relationship. These findings provide insight on how managers can utilize informal institutions to meet the global challenge of satisfying profit needs and still maintain social responsibility.