“Corporate Social Responsibility (CSR) engagement of Multinational Corporations (MNCs) and their effect on firm financial performance in emerging economies.”
This master thesis deals with the impact of Corporate Social Responsibility (CSR) engagement of Multinational Corporations (MNCs) on firm financial performance in emerging economies. CSR is a widely used term in today’s business world and refers to the responsibility of companies of their impact on society. This thesis compares varies definitions of CSR and comes up with a suitable solution. Furthermore, companies are driven to engage in CSR not only because of financial but also due to legitimacy reasons. Emerging economies, on the other side, are markets that are characterized by a liberal trade policy and show high economic growth rates. CSR in those markets differs from CSR in developed markets in a way as CSR is more adapted to local circumstances. However, the actual on-site practices are similar. Due to the political and economic environment, Brazil, as one figurehead of emerging markets, turns out to be a suitable environment for companies to engage in CSR. Within a statistical analysis it is analyzed if CSR increases firm financial performance in Brazil and if the origin of the MNC has a moderation effect. Results state that indeed engaging in CSR pays out financially. On the other hand, the origin of the company, i.e. if local or foreign, does not seem to play any role. Fast adaptation to local market conditions may seem to be responsible for that situation, however, further investigation is needed. One interesting finding this thesis bears is that the engagement in general CSR topics, like fighting climate change, is sufficient to extract financial gains. Finally, this thesis contributes also to less researched topics like ethnocentrism in CSR and concludes that engaging in CSR is fruitful, financially as well as for other reasons, in emerging economies.
Faculteit der Managementwetenschappen