Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/156412 
Year of Publication: 
2017
Series/Report no.: 
DICE Discussion Paper No. 246
Publisher: 
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE), Düsseldorf
Abstract: 
This paper investigates the determinants of a responsible multinational firm's decision to enter in a foreign country either through exports or through foreign direct investment (FDI), as well as the relevant market and societal outcomes. We find that CSR investments are higher under FDI than under exports. The multinational firm's incentives to serve the foreign country through FDI are increasing in the average consumer's valuation for CSR and in the intensity of the foreign country's market competition, but only if the average consumer's valuation for CSR in this country is sufficiently high. These incentives are mitigated by the multinational firm's liability in this country under exports. We also find that there is misalignment of preferences between the stakeholders of the two countries over the multinational firm's mode of entry in the foreign country.
Subjects: 
Corporate social responsibility
Multinational firms
Foreign direct investment
Exports
Import tariffs
JEL: 
D43
F13
F23
ISBN: 
978-3-86304-245-5
Document Type: 
Working Paper

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