Previous scholars have assumed that multinational enterprises (MNEs) can reduce the liability of foreignness and increase profitability by investing in corporate social…
Abstract
Purpose
Previous scholars have assumed that multinational enterprises (MNEs) can reduce the liability of foreignness and increase profitability by investing in corporate social responsibility (CSR). However, empirical validation of this assumption has rarely been attempted. This study aims to provide empirical evidence that the adoption of multi-stakeholder initiatives, which are globally recognized as signals of CSR, helps MNEs increase profits from internationalization.
Design/methodology/approach
Fixed effect models, which address model misspecification problems, and instrumental variable estimation, which controls for the endogeneity in firms’ choice of internationalization, offer empirical evidence supporting the moderating effects of global multi-stakeholder initiatives on the relationship between internationalization and firm performance.
Findings
This study examines the moderating role of multi-stakeholder initiatives in the relationship between internationalization and firm performance, drawing on signaling and stakeholder theories. The results suggest that the signaling effect of multi-stakeholder initiatives can help MNEs overcome the liability of foreignness and, therefore, profit from overseas markets.
Originality/value
Although the internationalization–firm performance relationship has been a subject of debate in the field of international business, the role of firms’ stakeholder engagement in this relationship has been largely overlooked in previous studies. In this study, the authors explore the impact of multi-stakeholder initiatives on the internationalization–firm performance relationship. Our primary contention is that multi-stakeholder initiatives have moderating effects on this relationship by reducing the liability of foreignness experienced by MNEs in host countries. Furthermore, the findings suggest that active engagement in multi-stakeholder initiatives significantly contributes to the financial success of MNEs as they internationalize.
Details
Keywords
Sung-Bum Kim, Kathleen Jeehyae Kim and Dae-Young Kim
This experimental study aims to examine the effectiveness of cause-related marketing messages that incorporate both text and visuals, as compared to messages comprised solely of…
Abstract
Purpose
This experimental study aims to examine the effectiveness of cause-related marketing messages that incorporate both text and visuals, as compared to messages comprised solely of text, on the attitudes and behavioral intentions of restaurant customers, and to see if the impact varies across four categories of social causes (health, animal welfare, human services and the environment).
Design/methodology/approach
This experimental study uses a 2 (type of message) × 4 (cause category) between-subjects design.
Findings
Restaurant messages that combine text and visuals are more effective than restaurant messages with only text in engendering positive attitudinal and behavioral responses. This paper also found interaction effects between advertisement type and cause category on individuals’ responses (i.e. attitudes and behavioral intentions).
Practical implications
The messaging strategies suggested by this research will allow the restaurant industry to capitalize on the value of cause-related marketing initiatives.
Originality/value
This research contributes to the hospitality literature by expanding the realm of research on effective cause-related marketing initiatives.