REMARC UniPi

Abstract:

Prior research on the internationalization of firms from emerging countries has fruitfully invoked institutional theory to emphasize the legitimacy benefits that firms that obtain from showing isomorphism with international norms such as Corporate Social Responsibility (CSR). Without denying the intuitive appeal for these firms to communicate acceptance of CSR, we suggest that firms face a legitimacy trade-off, where the hoped-for legitimacy benefits of isomorphism must be weighed against other home-country institutional considerations. We advance and test this notion that firms will navigate this institutional complexity by engaging in anisomorphism, i.e., espousing general acceptance with international values but with selective ‘translation’ based on home country differences. We test our predictions by analysing firms’ communication of CSR, using a unique dataset comprised of 245 firms observed over the period from 2000 to 2018. Consistent with our predictions, we find that firms from countries more reliant on natural resource extraction (e.g., mining and fossil fuel industries) de-emphasize the environmental component of CSR, and firms from more autocratic countries de-emphasize the human rights component of CSR. Additionally, and consistent with our presumption of firms’ weighing the international versus home-country legitimacy trade-off, we find that these main effects are sensitive to changes in firms’ levels of internationalization.

The article is available online here.