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Responding to public disclosure of corporate social irresponsibility in host countries
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Journal Article
Responding to public disclosure of corporate social irresponsibility in host countries
2019
Overview
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.
Publisher
Springer Science + Business Media,Palgrave Macmillan UK,Palgrave Macmillan
Subject
