The effect of CSR performance on firm performance: the moderating role of institutional distance
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2024-08-29
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en
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Corporate social responsibility (CSR) is already a long-existing topic for businesses. Multinationals have started to look increasingly at the effect of CSR performance on company financial performance. This is especially important for multinationals operating in different countries, where they have to deal with different institutional factors. Therefore, this study examined the effect of institutional distance on the relationship between CSR performance and a company’s financial performance. The sample of this study consist of multinational enterprises in 45 different counties with a focus on the time period 2012-2018. Through conducting a factor analysis and a panel regression analysis, it was possible to answer what the effect of institutional distance is on the relationship between CSR performance and financial performance. The findings show that CSR performance has a positive effect on the company's financial performance. Furthermore, the formal institutional distance has a positive effect and the informal institutions have no clear overall effect on the relationship between CSR performance and a company’s financial performance. Therefore, multinationals need to pay attention if they want to create CSR performance in the host country in case of institutional differences from the home country.
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Faculteit der Managementwetenschappen