Will Institutional Distance Affect Multinational Firms’ CSR Performance in a Host Country?

Xiao Hongjun
Institute of Industrial Economics, Chinese Academy of Social Sciences, Beijing, China

Abstract:  Taking multinational firms operating in China as objects of research, this paper has discovered through empirical study that economic institutional distance and cultural institutional distance have negative effects on the corporate social responsibility (CSR) performance of multinational firms in a host country; when the legal system of home country is far better than that ofhost country, legal institutional distance has a positive effect on the CSR performance of multinational firms in the host country; entry mode has negative adjustment effect on the relationship of legal institutional distance and cultural institutional distance with the CSR performance of multinational firms in a host country; business experience of multinational firms in a host country has a negative adjustment effect on the relationship between legal institutional distance and their CSR performance in the host country.

Keywords: social responsibility, institutional distance, multinational firms, liability of foreignness

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