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Drawing on institutional theory, this study examines the question of how host country institutions affect corporate social responsibility (CSR) adoption by multinational enterprises (MNEs). I propose that CSR encompasses a set of practices that MNEs draw on to signal legitimacy in different kinds of institutional contexts – contexts that vary in how they shape issue salience and stakeholder power in a given issue field. Building on ideas related to field opacity and the managerial implications of CSR, I study why MNEs adopt two distinct types of CSR policies: standards-based CSR in response to contexts marked by issue salience, and rights-based CSR in response to contexts marked by stakeholder power. To test these hypotheses, I use subsidiary and firm-level data from a sample of 540 Western European MNEs in the issue field of labor rights. Results show that MNEs strategically adopt these CSR policies related to their presence in distinct institutional contexts. The study offers implications for how MNEs manage the legitimacy of their global operations and how CSR, as a form of private governance, can emerge as both a substitute and complement to requlatory institutions.

Expatriate host country language proficiency is predominately assumed to have a negative linear relationship with expatriate social categorization – as outgroup members – by host country national (HCN) employees in foreign subsidiaries. Departing from this assumption, we use social identity theory (SIT) and SIT-based sociolinguistics to hypothesize that expatriate host country language proficiency, due to identity threat, has a curvilinear U-shaped relationship with HCNs’ expatriate outgroup categorization: at first, outgroup categorization decreases with increasing expatriates’ language proficiency, but, from a certain point onwards, it increases because “too good” language proficiency violates salient intergroup boundaries between HCNs and expatriates. Due to their key roles in social categorization, we also examine whether HCN allocentrism and uncertainty avoidance moderate the proposed curvilinear relationship. Results from data collected from 1166 HCN employees in 956 foreign subsidiaries in Japan provide support for the main curvilinear relationship and the moderating curvilinear relationship of uncertainty avoidance. Our results suggest that the language-proficient expatriate social categorization relationship is more complex than previous international business research has evoked. Our study contributes to the international business literature by casting doubt on the widely held assumption that expatriate adaptation towards the host country always carries beneficial effects. Our study cautions, in particular, against the common assumption that higher proficiency in the host country language will automatically lead to better relationships with HCNs in foreign subsidiaries.

Empirical studies of bilateral foreign direct investment (FDI) activity show substantial differences in specifications with little agreement on the set of included covariates. We use Bayesian statistical techniques that allow one to select from a large set of candidates those variables most likely to be determinants of FDI activity. The variables with consistently high inclusion probabilities include traditional gravity variables, cultural distance factors, relative labour endowments and trade agreements. There is little support for multilateral trade openness, most host-country business costs, host-country infrastructure and host-country institutions. Our results suggest that many covariates found significant by previous studies are not robust. Les études empiriques des déterminants des activités d'investissement direct bilatéral à l'étranger ont des spécifications substantiellement différentes et peu d'accord sur les variables co-reliées incluses. On utilise des techniques statistiques bayesiennes qui permettent de balayer un vaste ensemble de variables à la recherche de celles qui sont davantage susceptibles d'être des déterminants des activités d'investissement direct à l'étranger. Les variables qui se retrouvent de manière régulière dans la liste de haute probabilité d'impact sont les variables reliées à la gravité, les facteurs liés à la distance culturelle, les dotations relatives en facteur travail, et les accords commerciaux. Il y a peu de support pour des variables comme l'ouverture au commerce multilatéral, la plupart des coûts d'affaires, les infrastructures et les institutions dans les pays hôtes. Ces résultats suggèrent que plusieurs co-variations qu'on a jugées significatives dans les études antérieures ne sont pas robustes.

We extend the internalization literature by theorizing on how public disclosure of corporate social irresponsibility (CSI) can damage reputation-based firm-specific advantages of multinational companies (MNCs) and how foreign subsidiary governance can subsequently be used as strategic responses. Specifically, we distinguish between two foreign subsidiary governance mechanisms – information control and ownership control – that the prior literature has often assumed operate in parallel, and posit that they function in divergent directions in this context. Furthermore, we explain how two hostcountry characteristics–press freedom and regulatory quality – amplify the need for MNCs to utilize different governance mechanisms as responses to CSI disclosure.

We argue that the pressure MNE subsidiaries face to engage in corrupt practices in their host country varies positively with the institutionalization of corrupt practices in both host and home country environments. We further argue that the relationship between an MNE's home country environment and the pressure it faces in the host country is moderated by its localization strategy. Results suggest a positive relationship between the host country corruption environment and the pressure subsidiaries face to engage in bribery locally. Mixed results emerged concerning MNEs from home countries participating in the OECD Convention for Combating Bribery. Results concerning the impact of the home country corruption environment are best viewed in light of significant moderating effects. When MNEs did not have local partners, firms from less corrupt home countries reported less pressure to engage in corrupt practices locally; however, the presence of local partners eliminated this relationship. Results will help managers understand the pressures their firm is likely to face when operating in corrupt host country environments, and also offer guidance concerning how the firm might reduce its exposure to those local institutional pressures.

Although extant literature has long argued that firm embeddedness within knowledge networks increases innovation, we know much less about how interactions across multiple knowledge networks jointly influence learning and innovation outcomes within firms. This paper contributes to our understanding of global innovation in multinational corporations (MNCs) by exploring how competing tensions across parent, host-country, and third-country knowledge networks in terms of knowledge domain diversity and dominance, organizational bias, and knowledge relevance perceptions influence innovation outcomes. Empirical results from a comprehensive panel of U.S. MNCs reveal different “preferred” combinations of high and low embeddedness across parent, host-country, and third-country knowledge networks for incremental versus radical innovation outcomes, reflecting how competing tensions across knowledge networks can limit or enhance knowledge search for diverse knowledge and influence innovation outcomes in the foreign operations of MNCs.

This paper examines the role of institutional analysis within the field of international business (IB) studies. Within IB, institutions matter, but the view of institutions tends to be \"thin\", utilizing summary indicators rather than detailed description, and thus approaches institutions as unidimensional \"variables\" that impact on particular facets of business activity. This paper argues that IB research would be usefully advanced by greater attention to comparing the topography of institutional landscapes and understanding their diversity. A number of alternative case-based approaches are outlined that draw on a growing \"comparative capitalisms\" literature in sociology and political science. The paper develops a number of empirical examples to show the utility and limits of these approaches for IB scholars.

Prior studies have found that foreign affiliates of multinational enterprises (MNEs) suffer from liability of foreignness (LOF). Foreign affiliates may be able to improve their social legitimacy and overcome LOF by demonstrating social commitment to host-country constituents through corporate social responsibility (CSR). If LOF is positively related to the distance between the home and host countries, and CSR activities confer social legitimacy benefits on foreign affiliates, we should expect CSR activities and distance to be positively related. However, we argue that, despite this potential motivation, foreign affiliates from more distant home countries are in fact less likely to engage in host-country CSR. Our argument focuses on the ways in which distance affects the MNE's willingness and ability to engage in CSR abroad. We also predict that hostcountry CSR reputation negatively moderates this relationship. Using Community Reinvestment Act data for foreign bank affiliates from 32 countries in the United States over 1990-2007, we find strong support for our hypotheses. The paper enriches our understanding of CSR practices in MNEs, and of when and how MNEs try to overcome legitimacy issues in host countries.

Expropriation risk has a binding effect on foreign direct investment (FDI). However, state-owned multinational corporations may counter the monopoly power of the host state by leveraging the political influence of their home government. The magnitude of this counter force, we argue, may vary, depending on the strength of political relations between the home and host state, and the level of economic dependence of the host country on the home market. We find supporting evidence of our hypotheses using Chinese firm-level FDI information between 2003 and 2010.

In today’s global economy, self-initiated expatriates (SIEs) and host country nationals (HCNs) both represent critical human resources for organizations operating globally. Yet, because these two groups of employees have been studied separately, little is known about how SIEs’ and HCNs’ perceptions of, and attitudes towards the organization compare and diverge (vs. converge) in terms of implications for human resource management. This study aims to contribute to fill this gap by examining psychological contract breach, organizational cynicism, and organizational commitment components (i.e., affective, normative, and continuance) among a sample of 156 SIEs and HCNs working in the Chinese and Malaysian transnational education sector. Using a one-year time-lagged study, we found that compared to HCNs, SIEs experienced more organizational cynicism and less affective, normative, and continuance commitment. Moreover, the breach-organizational cynicism relationship was stronger (i.e., more positive) among SIEs than HCNs. The indirect relationships between breach and affective and continuance commitment, as mediated by organizational cynicism, were also stronger (i.e., more negative) among SIEs than HCNs. Implications for human resource management are discussed under the lens of Conservation of Resources theory.