TITLE:
Inertia of Original Country’s CSR Impact on Corporate Financial and Market Performance: Evidence of Multinational Corporations in China
AUTHORS:
Bo Wu, Hamrila Binti Abdul Latip, Mahani B. T. Mohammad, Sharizal Bin Hashin
KEYWORDS:
Multinational Corporations, Corporation Social Responsibility Inertia, Corporation Market Performance, Stakeholder Theory
JOURNAL NAME:
iBusiness,
Vol.15 No.1,
March
29,
2023
ABSTRACT: After entering the host country, multinational corporations often adopt a
series of localization strategies in order to overcome the maladjustment caused
by the inertia of some corporations when operating in the host country. This paper selects the corporate social responsibility
inertia, which is most easily ignored
in the corporate organizational inertia, as the analysis point to explore the
impact of corporate social responsibility inertia on corporate performance
and market. This paper analyzes three inertia dimensions through the combination of stakeholder theory and
corporate social responsibility: structural inertia,
environmental protection inertia and moral inertia. And use fixed effects
mode in econometrics to empirically test the market performance data of
multinational corporations in China from 2017 to 2022. The research finds that
the structural inertia of corporate social responsibility negatively affects
corporate performance. The moral inertia and environmental protection inertia
of corporate social responsibility effects on corporation market performance is
shown as a Kuznets curve. Through the improvement of localization strategy, corporations
can overcome the inertia of the original country.