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The consequences of corporate corruption control (CCC) have either been investigated outside the firm (e.g. foreign direct investment inflows) or inside the firm (e.g. profitability). Yet prior research addresses these implications separately, treating them as distinct phenomena, ignoring questions at their intersection. However, corruption control can be leveraged to benefit both organizations (internally) and environments (externally). In line with open systems theory, this study aims to explore a ripple effect of corruption control not only inside organizations (efficiency through adoption of sustainable resource management practices) but also outside [community-centered corporate social performance (CSP)].

Using a longitudinal sample of multinational enterprises from Forbes list of “The World’s Largest Public Companies,” the authors use a cross-lagged panel design to provide clarity regarding causal effects.

Results confirm causal directionality and support the positive effect of corruption control on resource management and community CSP, contributing toward understanding implications at the organization–environment interface.

The authors examine both internal and external implications of CCC. The use of a cross-lagged design that is relatively novel to the management field allows to check for casual effects between CSP elements that were previously assumed to have reciprocal casual effects.