Firm-Level Determinants of Political CSR in Emerging Economies: Evidence from India

  • Vikrant Shirodkar
  • Eshani Beddewela
  • Ulf Henning Richter
Article

Abstract

Multinational companies (MNCs) frequently adopt corporate social responsibility (CSR) activities that are aimed at providing ‘public goods’ and influencing the government in policymaking. Such political CSR (PCSR) activities have been determined to increase MNCs’ socio-political legitimacy and to be useful in building relationships with the state and other key external stakeholders. Although research on MNCs’ PCSR within the context of emerging economies is gaining momentum, only a limited number of studies have examined the firm-level variables that affect the extent to which MNCs’ subsidiaries in emerging economies pursue PCSR. Using insights from resource dependence theory, institutional theory, and the social capital literature, we argue that MNCs’ subsidiaries that are critically dependent on local resources, have greater ties to managers of related businesses and to policymakers, and that those that are interdependent on the MNCs’ headquarters and other foreign subsidiaries, are more likely to be involved in PCSR. We obtain support for our hypotheses using a sample of 105 subsidiaries of foreign firms that operate in India. Our findings enhance our understanding of the factors that determine MNCs’ political CSR in emerging economies.

Keywords

Political corporate social responsibility Corporate political activity Resource dependency theory Institutional theory Social capital India 

Abbreviations

CSR

Corporate social responsibility

MNC

Multinational corporation

NGO

Non-governmental organization

PCSR

Political corporate social responsibility

RDT

Resource dependence theory

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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  • Vikrant Shirodkar
    • 1
  • Eshani Beddewela
    • 2
  • Ulf Henning Richter
    • 3
  1. 1.School of Business, Management and EconomicsUniversity of SussexBrightonUK
  2. 2.University of HuddersfieldHuddersfieldUK
  3. 3.Nottingham University Business School ChinaNingboChina

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