earticle

영어

Cross-national distance between the home and host country in terms of GAGE (cultural, administrative, geographic, economic) is a key concept in the field of international business. The types of four distance influence different businesses in different ways. And the CAGE framework may also be used to understand patterns of trade, capital, information and people flows. Prior studies have demonstrated that foreign subsidiaries of multinational enterprises (MNEs) suffer from liability of foreignness (LOF). Through corporate social responsibility (CSR), foreign subsidiaries of MNEs may able to overcome LOF and improve their social legitimacy in a host country. Despite the MNE’s strategic motivation to reduce its LOF by engaging in CSR activities in the host country, we argued that foreign subsidiaries from more distant home countries are less likely to engage in CSR activities in the host country. This argument focuses on the ways in which CAGE distance affects the MNE’s ability (strategic driver) and willingness (social driver) to engage in CSR activities in the host country. On both ability and willingness grounds, foreign subsidiaries CSR spending may be inversely related to CAGE distance. Using data for 505 HCNs in 77 MNE subsidiaries that originating from 24 countries, we found strong support for the hypotheses. We discuss the theoretical and managerial implications, and provide suggestion for future research.