Does foreign investment matter Effects of foreign investment on the institutionalisation of corporate social responsibility by Japanese firms

Kenji Suzuki, Kanji Tanimoto, Ari Kokko

Research output: Contribution to journalArticle

10 Citations (Scopus)

Abstract

The increase in foreign direct and portfolio investment and the growing interest in the institutionalisation of Corporate Social Responsibility (CSR), such as the establishment of particular CSR sections, the appointment of CSR executives, and the documentation of guidelines for CSR, are two of the most notable phenomena in the Japanese business world in recent years. We examine whether these phenomena are associated by asking whether foreign investment matters in Japanese firms institutionalisation of CSR. To answer this question, we begin by discussing two competing views on how foreign investors are perceived by Japanese managers: Are foreign investors pursuers of short-term profit or diffusers of innovative practices? We then proceed to an empirical analysis where we examine if there is any statistically significant relationship between foreign investment and CSR, using a data set covering 749 Japanese firms. The results indicate that foreign investment is positively associated with the institutionalisation of CSR. Our analysis also suggests that the degree of international business contact, firm size and membership of certain business groups are positively related with the institutionalisation of CSR, whereas sectoral differences seem to have no effect.

Original languageEnglish
Pages (from-to)379-400
Number of pages22
JournalAsian Business and Management
Volume9
Issue number3
DOIs
Publication statusPublished - 2010 Sep
Externally publishedYes

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social responsibility
institutionalization
foreign investment
firm
investor
Institutionalization
Japanese firms
Foreign investment
Corporate Social Responsibility
documentation
profit
contact
manager

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Sociology and Political Science
  • Political Science and International Relations

Cite this

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