An assessment of the literature on the international dimension of CSR : the key role of emerging markets

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An assessment of the literature on the international

dimension of CSR: The key role of emerging markets

Renske Meijer 10467270 29 June 2015

MSc Business Administration: International Management University of Amsterdam

Final Version Master Thesis Supervisor: Dr. Niccolò Pisani Second Supervisor: Dr. Johan Lindeque

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Statement of originality

This document is written by Student Renske Meijer who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

The importance of the international domain of corporate social responsibility (CSR) is

widely acknowledged within both the academic and business field. However, the amount of

studies on international CSR is relatively limited. Also, published reviews do not focus on the

international dimension of CSR or are outdated and incomplete. This thesis reviews the existing

literature on international CSR. In addition, this thesis examines whether international CSR

research focused on emerging economies (EEs) might be associated with great impact and

whether the level of regulation, labor policies and corruption of the host countries studied

moderate the proposed association. In order to create the review and test the hypotheses a sample

of 271 international CSR studies, retrieved from Thomson Reuters’ Web of Science database, was

used. The literature review confirms that the attention for the international dimension of CSR is

especially scant in the international management and international business field. Existing studies

are mostly published in specialized journals and have a highly concentrated nature. Further

statistical analysis does not provide support for both the proposed impact of international CSR

research focused on EEs and the moderating effects of the level of regulation, corruption and

labor policies of the host countries studied. Nevertheless, the results suggest that article

characteristics such as the age of a publication and the use of a quantitative methodology have a

significant positive effect on the impact of an article in terms of the number of citations.

Keywords: corporate social responsibility; CSR; international; multinational; emerging

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1. Introduction

Over the last decade corporate social responsibility (CSR) has become a key point of

interest within the global community. Different stakeholders are expressing the importance of

corporate engagement for solving societal and environmental issues. For instance, Ban Ki-moon,

the Secretary-General of the United Nations (UN), regularly mentions the need for private-sector

engagement in his speeches. In 2007 at the UNA-USA Business Council for the United Nations

and the Association for a Better New York, he said the following:

“Business cannot survive or thrive if societies fail or if people feel that their security is threatened. Business is increasingly aware of this symbiotic relationship with society, and

of the role that responsible business practices can play in fostering the very stability that

business needs to prosper” (2007, Address to the UNA-USA Business Council, para.14).

With this statement, Ban Ki-moon highlights an essential motive for firms to act responsibly,

namely that the reduction of societal issues will enhance business success. In addition, he

explains that the current state of interdependence in the world requires firms to realize that

expansion comes with the responsibility to grow in sustainable ways. Certainly, as a result of

globalization and international trade, CSR is of particular importance to multinational enterprises

(MNEs) as operating across borders transfers the firm’s impact beyond one single nation. In the context of emerging markets, MNEs can have a positive influence on the economic

development of these markets (Tatoglu, Bayraktar, Sahadev, Demirbag, & Glaister, 2013).

However, operating in emerging markets poses challenges to MNEs as well since the institutional

environment is different, and because significant differences exist between CSR practices

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clothing factory in Bangladesh collapsed, resulting in 400 fatalities. Although this incident was

mainly caused by the reluctance of the local government to implement the national building code,

it had negative consequences for the MNEs manufacturing in this region. Ergo, in order to avoid

repetition and to minimize reputational damage, Western clothing manufacturers were urged to

develop safety plans together with the local government (The Economist, 2013).

The combination of corporate scandals and rapid global integration has increased the

attention for CSR within the scientific community as well (Rodriguez, Siegel, Hillman, & Eden,

2006). Studies explore and test the different motives for firms to engage in CSR and investigate

the results of CSR practices. Especially the relationship between CSR and firm performance is

extensively researched (Rodriguez et al., 2006). Despite the increasing academic interest in CSR,

some topics within this literature remain somewhat overlooked. To illustrate, as a consequence of

globalization the relevance of CSR within an international context is widely acknowledged, but

the research on this dimension has received relatively less attention than other CSR topics (Kolk

& Van Tulder, 2010). Rodriguez et al. (2006) note that compared to other underrepresented

themes in MNE research such as politics and corruption “the literature on multinationals and

CSR is the most embryonic” (p.736).

Until now there has not been a review that fully captures the current state of international

CSR literature. Existing reviews merely focus on CSR in general and not on the international

dimension or are outdated and incomplete. To demonstrate, in their review of CSR literature,

Aguinis and Glavas (2012) focus on the predictors, outcomes of CSR and the mediators and

moderators in the CSR-outcomes relationship. They make a major contribution to the literature

by identifying CSR studies conducted at the institutional, organizational and individual levels of

analysis. However, the authors do not dedicate special attention to the international dimension of

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Conversely, Egri and Ralston (2008) provide a review of international CSR literature and

focus on the themes, number of countries, geographical scope and empirical methodologies of

CSR studies. Yet, their review covers literature published in international management and

business journals and excludes contributions from specialized CSR journals such as the Journal

of Business Ethics. Also, the authors review literature published within a relatively small time

frame, namely between 1998 and 2007. Considering the relevance of specialized journals and the

increase in CSR research of the last years, the review is not covering a substantial part of the

published literature. Furthermore, Egri and Ralston (2008) record the geographical orientation of

the empirical articles in terms of country and scope, but they do not make a distinction between

home and host countries. This distinction could add to a deeper understanding of the current state

of international CSR research as it identifies which home and host country combinations are

studied the most or which ones are underrepresented. Considering the limitations of existing CSR

reviews, this thesis aims to provide an updated and extensive overview of the CSR literature

within an international context between 1985 and 2014.

Within the international domain of CSR, scholars are in agreement that emerging

economies present a particularly important subject area due to the institutional and cultural

challenges that MNEs face when implementing responsible practices. Furthermore, it is widely

acknowledged that the need for CSR in emerging economies is especially high as there is often a

lack of institutions providing a social support structure (Dobers & Halme, 2009). Considering the

prevailing notion that an urgent need exists for CSR in emerging markets, I posit that studies on

CSR focused on emerging markets are more impactful than the ones focused on developed

regions. Hence, the second aim of this study is to investigate the following research question:

Does CSR research have greater impact when it is investigated in the context of emerging

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This thesis will contribute to the literature by providing an updated and comprehensive

overview of international CSR research. This will encourage scholars to study the international

domain of CSR while addressing underrepresented topics and regions. At the same time, an

increase in international CSR research might help business leaders to obtain a better

understanding of the challenges that can be expected when being socially responsible at an

international level. Moreover, this thesis will contribute to the literature by investigating whether

CSR research focusing on emerging economies is more impactful than ones focused on

developed countries. This will be relevant since the outlook of a more impactful study might

persuade scholars to study CSR across emerging markets and managers of scientific journals to

publish these studies.

The structure of this thesis is as follows. In the next section relevant literature about the

drivers, outcomes and the international dimension of CSR will be discussed. Chapter 3 covers the

review process, the results of the literature review and its implications. Subsequently, hypotheses

will be discussed in relation to international CSR research focused on emerging markets.

Following the hypotheses development, the methods, analysis and results will be discussed.

Chapter 6 addresses the interpretation, academic relevance and the limitations of both the review

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2. CSR in the international domain

The following sections will discuss the existing CSR literature, starting with the general

CSR concept, the factors that drive CSR and the results of CSR practices. Next, the literature on

the international dimension of CSR will be discussed. Furthermore, the relevance of CSR in

emerging markets will be addressed. Finally, the research gap and the research question will be

identified.

2.1 CSR definition, drivers and outcomes

Although it might seem to be a rather recent topic, formal writings on social responsibility

of business go as far back as the 1930s (Caroll, 1999). In the early years of CSR, there was a lack

of agreement on its conceptualization; some scholars claim that social responsibility constitutes

actions beyond the economic responsibilities of the firm and others argue that the only obligation

of the firm is to make a profit (Caroll, 1979).

Difficulties with the conceptualization of CSR have remained, for instance there is a lack

of consensus regarding the definition of CSR (Lindgreen & Swaen, 2010). The term CSR has

been used to refer to business ethics, corporate philanthropy and environmental regulations

(Rodriguez et al., 2006). One of the main causes for the absence of a common definition is that

scholars study CSR from a number of different theoretical perspectives such as institutional

theory, stakeholder theory and the resource-based view of the firm (McWilliams et al., 2002;

Carroll, 1979; Wartick and Cochran, 1985; Windsor, 2006, in Lindgreen & Swaen, 2010).

Aguinis and Glavas (2012) draw the same conclusion and demonstrate that the CSR literature is

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organizational and individual level. In general, the inconsistent nature of existing CSR research

creates difficulties in comparing studies and understanding CSR (Rodriguez et al., 2006).

Regardless of the absence of a common definition, there seems to be a preference for

specific definitions of CSR, as they are cited more than others. One of the most widely used

definitions is the one by Carroll (1979) who notes that “the social responsibility of business

encompasses the economic, legal, ethical, and discretionary expectations that society has of

organizations at a given point in time” (p. 500). In contrast to other definitions of CSR, this

definition describes CSR in a broad manner since it covers four categories of firm responsibilities

(Crane, Matten & Spence, 2013). First, it consists of economic responsibilities, which means that

the main responsibility of a firm is to provide society with goods and services while making a

profit. Second, legal responsibilities entail that when a firm is delivering goods and services to

society, it should abide rules and regulations. Third, ethical responsibilities refer to expectations

that society has beyond a firm’s economic and legal responsibilities. Last, CSR includes discretionary responsibilities; these entail responsibilities of which society has no specific

expectations. Accordingly, this last dimension has a voluntary basis (Carroll, 1979). In sum,

Carroll’s definition brings forward both the compulsory and voluntary nature of CSR. Over the years, researchers obtained more insight into the different factors that can lead to the adoption of

CSR practices.

As noted by Young and Makhija (2014), CSR is studied through two prevailing

mechanisms; the institutional and economic perspective, where the latter can be regarded as an

aspect of the organizational level as described by Aguinis and Glavas (2012). According to

institutional theory, the main reason for firms to engage in CSR is to increase their legitimacy

perceived by social actors (Young & Makhija, 2014). Stated otherwise, pressure from social

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an important reason for firms to engage in CSR activities, as stakeholders have an impact on a

firm’s profitability and resources (Aguinis & Glavas, 2012). Although each stakeholder has a different motive, there are 3 main reasons for stakeholders to pressure firms into participating in

CSR: self-interest, relational and moral reasons (Aguilera, Rupp, Williams, & Ganapathi, 2007).

Other institutional drivers of CSR are state regulation, collective industrial self-regulation,

monitoring by non-governmental organizations (NGO) and other independent organizations,

standards and certification demands (Campbell, 2007).

With regards to economic drivers, the most researched motives for firms to participate in

CSR activities are potential improvements in competitiveness and profitability. Moreover,

normative motives such as a sense of stewardship, responsibility and duty are organizational

drivers of a firm’s CSR activity (Bansal & Roth, 2000). Finally, the alignment of CSR practices with a firm’s mission and values (Bansal, 2003) and corporate governance structure (Johnson & Greening, 1999) are also organizational drivers of CSR.

Compared to the institutional and organizational levels of analysis, CSR research focusing

on the individual level of analysis is underrepresented. Studies at this level of analysis report that

normative reasons, such as personal values and awareness of CSR, can positively influence the

commitment to CSR practices (Bansal, 2003; Bansal & Roth, 2000).

Since institutional factors coerce firms to engage in CSR, the nature of these CSR

practices might be largely symbolic rather than actually addressing social or environmental

issues. Specifically, symbolic CSR practices often lead to improved stakeholder relationships and

a better firm reputation (Aguinis & Glavas, 2012). With respect to organizational outcomes, most

studies investigate the relationship between CSR and a firm’s financial performance (Rodriguez et al., 2006). Some studies find a positive link between a firm’s CSR engagement and financial

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Makhija, 2014). In addition to financial outcomes, CSR activities can have non-financial effects

such as operational efficiency (Sharma & Vredenburg, 1998), product quality (Agle, Mitchell, &

Sonnenfeld, 1999) and demographic diversity (Johnson & Greening, 1999). At the individual

level of analysis, studies show that CSR engagement has a positive influence on the attitudes and

engagement of employees (Glavas & Piderit, 2009). Furthermore, CSR might lead to improved

organizational identification (Carmeli, Gilat, & Waldman, 2007) and employer attractiveness

(Turban & Greening, 1997).

2.2 CSR and the multinational enterprise

Aguinis and Glavas (2012) present a comprehensive review of the existing literature of

CSR in a general context, however their study does not identify published CSR studies with a

focus on the international context. The international dimension of CSR is of particular

importance to Multinational Enterprises (MNEs) because they operate across a variety of

institutional environments and cultures and since they are confronted with different stakeholder

groups and non-governmental organizations (NGOs) (Rodriguez et al., 2006).

Although the relevance of CSR for MNEs appears to be widely acknowledged and the

attention for CSR within the literature has increased over the last decade, the amount of published

studies on international CSR is limited (Egri & Ralston, 2008; Kolk & Van Tulder, 2010). Also,

existing studies are predominantly focusing on the effects of stakeholders and the institutional

environment on CSR practices of MNEs.

When operating internationally, MNEs are confronted with the, at times conflicting,

interests of different stakeholders groups (Chen, Newburry, & Park, 2009). Yang and Rivers

(2009) develop an overview of stakeholder groups that influence CSR practices in MNE

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(NGOs), industry bodies, consumers, shareholder, employees and parent firms. The stakeholder

perspective entails that stakeholders are able to influence an MNE’s CSR practices because they are able to directly control the firm’s resources and because they can indirectly disrupt the firm’s

usage of the resources (Frooman, 1999, in Yang & Rivers, 2009).

Yang and Rivers (2009) propose that MNE subsidiaries are more likely to adapt to local

practices when confronted with higher demands from their stakeholders. The authors present an

elaborate overview of the different stakeholder groups and how they influence CSR. First of all,

institutional stakeholders such as governments and NGOs, influence CSR as they have the ability

to steer MNEs in the right direction through respectively laws and partnerships. Second, the

community can use lobby groups to approach companies directly or use the media as to indirectly

pressure firms. Third, consumers have an influence on a firm’s CSR as they have the power to

stop purchasing from a company that is acting irresponsibly. Fourth, employees can motivate

firms to adopt CSR when they are demanding improved labor conditions or when they are

creating a support base for responsible conduct. Finally, parent firms can exercise control over

subsidiary CSR practices when subsidiaries are dependent on the parent firm for resources and

local legitimacy. Henceforth, subsidiaries are less likely to adapt to local practices because they

prioritize to gain internal legitimacy with the parent firm.

Apart from motivating a firm to adopt more responsible practices, stakeholder pressures

in the home country can lead to the transfer of socially irresponsible practices from headquarters

to subsidiaries (Surroca, Tribó, & Zahra, 2012). Specifically, MNE headquarters deliberately

move noncompliant behavior to their subsidiaries in order to regain legitimacy with home

country stakeholders. In addition, this relationship is moderated by the support that stakeholders

receive in the home country and the degree of regulation in host countries. The more power the

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the more likely MNE headquarters will transfer misconduct to their subsidiaries. Finally, Surroca

et al. (2013) point out that international NGOs play a key role in the prevention of the transfer of

socially irresponsible behavior to host countries.

Similarly to the stakeholder perspective, the relation between institutional factors and

international CSR is also widely researched. Scholars are in agreement that national institutions

influence MNE strategies. For instance, Jamali and Mirshak (2007) show that CSR practices are

shaped by national and institutional forces. Furthermore, MNEs are able to influence national

institutions as well (Chen et al., 2009) and MNEs and institutions co-evolve (Cantwell, Dunning

& Lundan, 2010).

The main reason for firms to adapt to local institutional requirements is to gain local

legitimacy (Deephouse, 1996; Kostova & Zaheer, 1999, in Chen et al., 2009). Different

institutional factors act as drivers for MNEs to adopt CSR practices. On the one hand local and

national institutions have a great impact. On the other hand, MNEs are also facing pressures from

international institutions, such as the United Nations, to adopt a common set of CSR standards

(Rodriguez et al., 2006).

There are contrasting views on the association between institutional distance and the

propensity to engage in CSR. On the one hand Yang and Rivers (2009) posit that the more

different the institutional environment the MNE operates in, the higher the likelihood that MNE

subsidiaries will adapt to local CSR practices in order to gain legitimacy. On the other hand, a

study on the interaction between the CAGE distance and CSR activities in host countries shows

that greater the distance between the home and host country the less likely foreign affiliates will

take part in CSR activities of any type (Campbell, Eden & Miller, 2012). However, Campbell et

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sense that the affiliates were willing to take in part in CSR if they already had prior experience

with implementing local CSR in the host country.

Next to the insights from stakeholder and institutional theory, existing reviews of

international CSR research contain a number of useful conclusions as well. First, most of the

existing literature focuses on issues related to ethics and governance, whereas environmental

themes and CSR are addressed less (Egri & Ralston, 2008). Second, a vast majority of studies

are empirical and using survey methodologies. Lastly, published works principally focus on CSR

in developed economies such as North America, Europe and East Asia and relatively less on

developing regions such as Central and Eastern Europe, Latin America, Africa, and poorer

regions in Asia (Kolk & Van Tulder, 2010; Egri & Ralston, 2008).

2.3 CSR in emerging economies

As a result of globalization and FDI, MNEs from developed regions such as Europe and

North America are increasingly operating in a variety of countries that have a different level of

economic development, institutional environment and culture as their home regions. Specifically,

there is an increasing amount of Western MNEs starting operations in emerging markets. Despite

scholarly attention on CSR related issues in these markets, the literature has been relatively

limited up to now, hence the purpose of this sub-section is to discuss issues associated with this

topic.

The world’s largest emerging economies (EEs) are Argentina, Brazil, China, India, Indonesia, the Russian Federation and South Africa. Considering factors such as the size of the

economies, population, Gross National Product (GNP) and growth percentages, a high level of

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largest economies in the world and are densely populated, whereas Argentina and South Africa

are substantially smaller in both terms. Even though the EEs achieved varying stages of economic

development, they have three important common economic characteristics. First, prior to the

2008-2009 global crisis, EEs experienced higher growth rates than the average of the members of

the Organization for Economic Co-operation and Development (OECD). Also, during the global

crisis EEs were more resilient than Western counterparts. Second, some EEs have experienced

significant reductions in poverty as a result of high economic growth, such as China, Brazil and

Indonesia. Nevertheless, differences in poverty between the EEs exist, with India having the

highest poverty rate of the seven largest EEs. Third, all the EEs have the potential to achieve the

income levels of OECD countries (OECD, 2011).

The fast paced growth of EEs presents countless opportunities for MNEs. Yet, operating

in these markets also poses numerous challenges for MNEs to profit from the high growth,

especially when it comes to dealing with CSR (Tan, 2009). There is an unavoidable difference

between standard CSR practices of MNEs and the prevailing CSR practices in emergent host

countries (Yang & Rivers, 2009). CSR is typically a concept from Western market economies

with strong regulatory environments (Dobers & Halme, 2009). In these economies CSR entails

activities beyond a firm’s economic and legal responsibilities. This presents a contrast to the

situation in EEs, as these have weaker institutional environments and are at the initial stage of

developing CSR measures (Yang & Rivers, 2009). Correspondingly, firms in EEs are less bound

to comply with local regulations and tax evasion, fraud and corruption are relatively common in

EEs (Jamali & Mirshak, 2007). Also, Asian businesses are less likely to have policies about

working hours and fair wages to protect employees (Welford, 2005, in Yang & Rivers, 2009).

At a first glance it might seem as if EEs have a different CSR orientation due to their level

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as formal institutions and culture are influencing local CSR practices rather than economic

factors. For instance, in their sample of seven Asian countries (India, Indonesia, Malaysia, the

Philippines, South Korea, Singapore, Thailand) Chapple and Moon (2005) find that India has the

lowest gross national product (GNP) but the highest level of CSR development. The authors

suggest that this is due to India’s deeply rooted religious and philanthropic traditions and the

country’s prior experience with foreign businesses through colonization. Conversely, Singapore has the highest level of economic and social development of the seven countries but was ranked

four out of seven on CSR development. This might be explained by the relatively small

geographic size, high taxes and prosperity of Singapore. However, Western countries such as the

United Kingdom and the United States have a relatively high tax base and yet have a stronger

association with CSR than Singapore (Chapple & Moon, 2005). Hence, national institutional

factors might play a role in a country’s CSR orientation.

Institutions in emerging markets influence CSR because market and legal systems are

imperfect. For instance, in China the weak institutional environment results in a low level of

support for shareholder interests, weak protection of legal rights and interests such as property

rights (Harvey, 1999; Xu & Yang, 2010, in Yin & Zhang, 2012). In addition, the fewer laws are

in place or the less the laws are enforced, the less likely MNEs will adopt responsible practices

(Yang & Rivers, 2009; Young & Makhija, 2014). Stated otherwise, when there are few

institutional incentives for MNEs to behave responsibly, there is a low likelihood that MNEs will

implement CSR practices in EEs. Apart from local institutional factors, Tatoglu et al. (2013) find

that home country factors have an impact as well; increased environmental concerns in the home

country might be an incentive to adopt environmental policies in emerging host countries.

With regards to culture scholars investigate the relation between cultural dimensions and

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attending to social issues undermines the primary role of business (Etheredge, 1999, in Axinn,

Blair, Heorhiadi, & Thach, 2004) whereas the latter argues that companies have responsibilities

towards society and should take the initiative to solve social issues (Donaldson & Preston, 1995;

Preston & Sapienza, 1990, in Axinn et al., 2004). Several studies find that more collectivist

cultures in EEs are associated with the stockholder view, for instance in comparison to American

MBA students, Malaysian MBA students have higher collectivist values and tend to adopt the

stockholder perspective as they displayed a prevailing focus on internal rather than external

stakeholders (Axinn, et al., 2004). Furthermore, Shafer, Fukukawa and Lee (2007) find that

Chinese managers with collectivist values tend to support the stockholder view rather than the

stakeholder view. In addition to views on public responsibilities, national culture also influences

ethical values in relation to bribery and corporate corruption(Su & Richelieu, 1999).

Next to the institutional perspective, recent research finds that most stakeholders (local

employees, governments, customers, media, NGOs) positively influence an MNE’s participation

in CSR activities in emerging markets (Tatoglu et al., 2013; Park, Chidlow, & Choi, 2014). In

contrast, suppliers tend to have a significant negative influence on the MNE’s CSR (Park et al.,

2014). The influence of host country employees seems to depend on the hierarchical level of

those employees in the organization. For instance, Reimann, Ehrgott, Kaufmann and Carter

(2012) stress the importance of local middle managers in driving local CSR initiatives in EEs.

They suggest that middle managers possess a substantial amount of negotiating power since they

are facing attractive employment opportunities elsewhere in the host country. However, Yang

and Rivers (2009) argue that employees in EEs commonly tend to have lower expectations of

their employers and they are less likely to take action against their employers as they fear to lose

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2.4 Research gap and research question

As illustrated, the attention for CSR has increased over the last decades. Existing studies

address the different reasons for firms to engage in CSR and potential outcomes. Also, the

international dimension of CSR is relatively underrepresented in the literature.

This study aims to address a major limitation in the CSR literature. Specifically, existing

reviews are dated or not sufficiently comprehensive. For instance, Egri and Ralston (2008)

review CSR research from 1998 to 2007, hence the last seven years of research are not included.

Also, the authors report the country and geographical scope of empirical journal articles but do

not make the distinction between home and host country.

In the light of international CSR, there is relatively little research regarding CSR in the

context of emerging markets. This is especially important as these markets are in need of

responsible business actions to reduce poverty and environmental issues. Since emerging markets

are increasingly becoming a part of the global economy, CSR research focusing on emerging

markets is particularly valuable to both theory and practice (Tan, 2009). As a result the following

research question arises: Does CSR research have greater impact when it is investigated in the

context of emerging markets?

This thesis contributes to the literature by providing an updated review of international

CSR research. This will help scholars to consider exploring less researched areas of international

CSR. The results of the review will be presented in the next chapter. In addition, this thesis

contributes to the literature by establishing whether international CSR research is associated with

greater impact and which factors might influence the impact. This might encourage scholars to

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3. Literature Review

The main purpose of this thesis is to provide an updated review of international corporate

social responsibility (CSR) research. The following section provides a description of the sample

of articles used to create the review and the way this sample was collected and reviewed. Lastly,

the results of the review and the implications will be addressed.

3.1 The review process

The sample consists of 407 articles that were obtained by completing a keyword search

using the Thomson Reuters’ Web of Science database. I used the twenty-four academic journals listed in Table 1 as search criterion to filter for publication names. These journals were selected

because they cover business research in general or because they focus on a specialized field such

as business ethics, international business, strategy or organizational science. Additionally, I used

a combination of six keywords (corporate social responsibility, CSR, regional, global,

international, multinational) to identify articles mentioning international corporate social

responsibility in the title, abstract or keywords. Finally, I further restricted the keyword search by

adding a range of publication years (1985-2014). This keyword search resulted in a total of 407

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Table 1

Academic Journals Used in Key Word Search

In order to review the articles in the database, I used qualitative analysis based on my own

interpretation. I read the title and abstract of each study to allocate them to a number of

categories. First, I determined which articles explicitly focused on the international dimension of

CSR. I excluded the ones that were not focusing on international CSR from any further

categorization. Second, I made the distinction between comparative and non-comparative studies

by determining whether a study aimed to make comparisons across different dimensions (e.g.

cross-national, industry, culture). Also, I coded the articles into one of the twelve categories of

international management research displayed in Table 2 (Werner, 2002; Pisani, 2009).

Academic Journals

Administrative Science Quarterly Academy of Management Journal Academy of Management Review Business & Society

Business Ethics Quarterly Human Decision Processes Human Relations

International Business Review Journal of Applied Psychology Journal of Business Ethics

Journal of International Business Studies Journal of International Management Journal of Management

Journal of Management Studies

Journal of Occupational and Organizational Psychology Journal of Organizational Behavior

Journal of World Business

Management International Review Management Science

Organizational Behavior Organization Science Organization Studies Personnel Psychology

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Table 2

Categories of International Management Research

4. CSR research and emerging markets: Hypotheses development

The theoretical framework of this thesis aims to uncover the association between CSR

studies focusing on emerging markets and the impact of these specific studies. First, I will

explain why CSR research on emerging markets can be expected to have a relatively great

impact. Next, I will discuss the factors that might influence the association between the CSR

research focused on emerging markets and its impact.

4.1 CSR research focused on emerging economies and its impact

Studies focusing on emerging markets use a variety of countries as empirical field. Large

emerging economies (EEs) such as China and India presumably receive most attention. Yet,

smaller EEs such as Malaysia, Thailand and Taiwan are studied as well. In addition, research on

EEs it not limited to Asia; countries in South America, Africa and the Middle East are common

as well.

There are several reasons why studies focusing on CSR in EEs should be associated with

substantial impact. In the first place, acting responsibly in EEs results in a number of challenges

for MNEs as opposed to engaging in CSR in markets more similar to the MNE’s home country.

MNEs are facing great pressure from the international community to conduct business in a

responsible manner. Over the last years MNEs are seen less as provider of capital and more as an

integrated part of society (Chen et al., 2009). Also, since MNEs are often publicly traded, their

actions are scrutinized by activists and NGOs (Rodriguez et al., 2011). Consequently, MNEs are

increasingly expected to take the responsibility to address social issues. In the context of

emerging markets this pressure becomes even more evident as CSR might be more of a necessity

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MNEs are often perceived as exploiting and profiting from the local circumstances (Reimann et

al., 2012).

Also, emerging markets present a particularly challenging context to operate in as

institutions are likely to be less developed and more prone to change than the ones in developed

countries (Hoskisson et al., 2000; Meyer, 2004, in Chen et al., 2009). The weak institutional

environment often means that a country has different standards with regards to human rights and

environmental regulations. As a consequence, voluntary CSR programs as known in developed

countries are not very effective as long as host country governments are not initiating

improvements in the rule of law (Aaronson, 2005). For instance, Tan (2009) finds that Western

MNEs in China often adopt different standards as they do not succeed in complying with home

region policies. In addition, Tan (2009) emphasizes that this effect is aggravated by the absence

of strong institutions as these situations offer “loopholes for MNEs to exploit” (p.186).

From a stakeholder perspective, there is a larger risk of conflicts between stakeholders in

developing countries as stakeholders are competing to benefit from future economic development

(Chen et al., 2009). Furthermore, initially firm CSR strategies focused on the upper echelons in

society as opposed to the current shift towards a ‘bottom of the pyramid’ perspective that focuses

on people living on less than $2 a day (Prahalad, 2009). As a result, MNEs are required to

develop new CSR strategies to meet the expectations of this arising stakeholder group (Chen et

al., 2009).

As illustrated, operating in EEs in a socially responsible way is accompanied with a

substantial amount of pressures and obstacles. Consequently, relative to CSR research on

developed countries the importance of research focused on EEs for both academics and

practitioners is considerably larger. Both the relevance and urgent need for this type of research

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Another reason why CSR research focused on EEs should be associated with substantial

impact is since it is a relatively new area of research. Several scholars claim that the current state

of research on MNE CSR strategies in EEs is relatively undeveloped (Rodriguez et al., 2011; Hah

& Freeman, 2014; Lindgreen et al., 2009). Articles in new subject areas might be impactful since

they are more likely to lead to breakthroughs than articles in established subject areas (Sternberg

& Gordeeva, 1996, in Stremersch, Verniers, & Verhoef, 2007). In addition, the fact that existing

CSR research on developed countries is difficult to apply in the context of EEs (Dobers & Halme,

2009) and that there is a relatively small amount of studies focused on EEs might increase the

impact of the existing studies on EEs. Therefore, I hypothesize the following:

Hypothesis 1. CSR research focused on emerging (versus developed) markets is associated with greater impact

4.2 Moderators

As discussed in previous sections, it is evident that the institutional environment in

emerging markets has a great impact on MNE CSR practices. Institutional factors might decrease

or increase the complexities that MNEs face in EEs. In line with the reasoning of hypothesis 1,

one could argue that when an article investigates an emerging host country that presents a less

challenging environment, the article’s impact might be less than one that researches a country that presents a very complex environment. Hence, I posit that the association between emerging

market CSR research and its impact is moderated by institutional characteristics of the host

countries studied as these influence the degree of challenges faced by MNEs.

4.2.1 Host country regulation

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framework of the host country. A number of scholars agree that the greater the amount of

regulations, the more likely a firm is to engage in responsible behavior in that country (Young &

Makhija, 2014; Yang & Rivers, 2009; Campbell, 2007). Furthermore, firms will act more

responsibly when regulations are developed through a process of consensus and negotiation

among the government, firms and other stakeholders (Campbell, 2007). In addition, Li,

Fetscherin, Alon, Lattemann and Yeh (2010) propose that firms in more rule-based societies have

a higher intensity of CSR communications. Vice versa, Surroca et al. (2013) find that the more

permissive the host country’s regulatory framework, the more likely MNE headquarters are to transfer socially irresponsible practices to subsidiaries in those host countries. Dobers and Halme

(2009) also addressed irresponsible practices by explaining that the absence of regulations might

lead to tax evasion by MNEs through mispricing, transfer pricing and fake transactions. In sum, a

high level of regulation in a country increases the ease of implementing CSR practices for MNEs.

As a result, less research might be needed to explore CSR in highly regulated countries compared

to less regulated ones. Therefore, research studying countries with relatively high levels of

regulation can be expected to be less impactful. Hence I propose:

Hypothesis 2a. The level of regulation of the host country negatively moderates the relationship hypothesized in H1

4.2.2 Host country labor policies

Apart from the general regulatory framework of a host country, more specific regulations

might have an impact on CSR as well. As noted by Reimann et al. (2012) MNEs operating in EEs

might be regarded as exploiting local employees due to low wages and poor working conditions.

Young and Makhija (2014) suggest that the presence of strong labor-related regulatory

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overall lack of regulations, policies defining e.g. minimum wage and maximum working hours

often do not exist in EEs. For this reason, employees are not supported by the system when

fighting for their rights and this might result in employees refraining from taking actions against

their employers (Yang & Rivers, 2009). A lack of labor policies complicates the implementation

of CSR for MNEs as there are no rules protecting employees. Vice versa, when there are labor

policies in place that MNEs have to comply with it is more likely that businesses act responsibly.

Consequently, there might be a smaller need to study CSR in countries that have a high level of

labor regulations and this might reduce the impact of an article. Thus, I propose:

Hypothesis 2b. The level of labor policies of the host country negatively moderates the relationship hypothesized in H1

4.2.3 Host country corruption

Corruption can be defined as “the misuse of public power for private gain” (Rodriguez et al., 2006, p. 735). Corruption in emerging markets is omnipresent and prone to rise transaction

costs of MNEs (Ackerman, 1975, in Luo, 2006). Also, corruption can have significant effects on

the economic growth of developing and emerging countries. Dobers and Halme (2009) note that

illegal capital outflows from poor to rich countries are larger than the inflows of global aid and

that these activities are partly supported by corrupt elites and by firm officials. Also in line with

Surroca et al.’s (2013) reasoning about the effect of the absence of regulations, it is noted that companies using bribery in developing countries are often from countries with low levels of

corruption (Osuji, 2011). Stated otherwise, Western MNEs might turn to corrupt practices in host

countries with a higher level of corruption. Accordingly, corruption forms an obstacle for the

implementation of CSR activities (Luo, 2006). Specifically, Luo (2006) finds that MNEs are less

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when the observed level of corruption is high. Thus, a high level of corruption signals a high

institutional distance between home and host countries and this impacts the ability of an MNE to

implement CSR. More extensive research is needed to investigate how MNEs can act responsibly

in corrupt environments compared to non-corrupt environments. Thus, articles studying countries

with higher levels of corruption can be expected to have more impact.

Hence:

Hypothesis 2c. The level of corruption of the host country positively moderates the relationship hypothesized in H1

Figure 1 shows the proposed association between emerging markets versus developed market

research and the respective impact on an article.

Figure 1 Conceptual Model

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5. Methods

5.1 Sample

The sample consists of the 271 articles collected for the literature review that were coded

as focusing on the international dimension of CSR. This sample contains a subset of 97 articles of

international CSR literature focusing on emerging markets.

5.2 Measures

5.2.1 Dependent variable

The dependent variable in my model is the impact of a study. The impact of an article can

be operationalized by the number of citations of that specific article. A citation means the

appearance of an article in the reference list of another article (Stremersch et al., 2007) and its

analysis is an appropriate measure to evaluate an article’s contribution to the existing knowledge

base (Cote, Leong, & Cote, 1991). Nonetheless, the use of citations to measure article impact

comes with limitations. For instance, the number of citations might be inflated due to

self-citations, ‘negative’ citations or the type of journal an article is published in. Also, review articles

are normally associated with a higher number of citations (Seglen, 1997). Yet, for the purpose of

this thesis, the number of citations comprises a simple measure to identify impactful articles. To

ensure consistency, the number of citations of each study was collected from Thomson Reuters’

Web of Science database on March 13 2015.

5.2.2 Independent variable

The independent variable of this thesis is international CSR research. I used dummy

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thesis to explore the impact of the emerging markets subject area, it is not necessary to further

specify the category other. Also, using a categorical predictor variable with two categories rather

than multiple categories reduces complexities regarding analyzing the data and interpreting the

results.

5.2.3 Moderating variables

To explore the relationship between the focus of an article and the number of citations, I

identified three moderators. The data for all three moderators was retrieved from the Free the

World report of 2014 (Gwartney, Lawson, & Hall 2014). The level of regulation in the host

country is the first moderator variable. This variable is measured on a 0-to-10 scale and this

number represents the average of different regulatory dimensions, such as the level business

regulation, labor market regulation and credit market regulation. The higher the rating, the higher

the level of regulations in the host country (Gwartney et al., 2014).

The second moderator variable is the level of labor policies in the host country. This

moderator is operationalized by hiring and minimum wage policies. This variable is also

measured on a 0-to-10 scale where countries with a higher difficulty of hiring and lower

minimum wages are given a lower rating (Gwartney et al., 2014).

The third moderator is the level of corruption in the host country. Lancaster and

Montinola (2001) integrate a number of dimensions in their proposed operationalization of

political corruption such as the degree of universal literacy, openness of the economy, social

heterogeneity and independence of the judiciary system. The Free the World report offers

different ways to measure corruption such as the reliability of the police, impartial courts and the

judicial independence of a country. After the reading the descriptions of each construct, I decided

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measured on a 0-to-10 scale where a higher rating reflects higher judicial independence and thus

lower corruption (Gwartney et al., 2014). Considering the way I formulated my hypotheses and

the purpose of my model, judicial independence is a counter indicative item and I recoded this

item so that a higher rating reflects lower judicial independence and thus higher corruption.

5.2.4 Control Variables

Considering the limitations of using the number of citations as a measure of article

impact, I controlled for four other factors that might cause differences in citations across a sample

of articles. First of all, there is a likelihood that older articles are cited more often than recently

published ones. Hence, the variable that is controlled for is number of years an article could have

been cited, calculated by subtracting the publication year of an article of the current year (2015).

Second, since self-citations might inflate an article’s citedness it is likely that articles written by a

larger number of authors are cited more often. For this reason, the number of authors of an article

is also controlled for.Third, the use of a quantitative method results in a relatively higher

generalizability than a qualitative method, increasing the likelihood that an article will be cited.

Therefore, I control for the methodological orientation. Finally, I also include the level analysis

as a control variable since a broader level of analysis increases the generalizability of a study as

well.

It should be noted that the control variables methodological orientation and level of

analysis are categorical variables with more than one category. To prepare these variables for

further analysis, I created dummy variables for both controls. I coded the categories with the

highest frequencies as the baseline (0); for methodological orientation, this was theoretical and

for level of analysis the institutional level. The categories that I compared with the baseline, I

An assessment of the literature on the international dimension of CSR : the key role of emerging markets