Influences of ownership structure on CSR performance in emerging markets

Abstract

We study a timely and important business phenomenon: corporate social responsibility (CSR) performance in emerging markets. Emerging markets constitute an interesting context in which to analyze CSR performance, due to their institutional voids and the upsurge of social media usage. Our research brings together the literature on ownership structure, institutional voids, social media, and CSR performance to develop a conceptual framework. The framework comprehensively demonstrates that (1) state-owned enterprises (SOEs) and multinational enterprises (MNEs) pursue different CSR strategies depending on levels of state ownership, (2) institutional voids bring difficulties due to unclear statements on how firms carry out CSR activities, and (3) social media increases the speed of CSR communication. We argue that institutional voids and social media are characterized differently between emerging markets and advanced ones. Therefore, we propose that MNEs perform CSR activities better than do SOEs, while institutional voids and social media influence firm CSR performance differently in the two structures. Furthermore, depending on the levels of voids and how social media is developed, the influence of ownership structure on CSR performance is modified. Our research encourages SOEs and MNEs in emerging markets to review their CSR strategies and switch from the conventional focus on market expansion and profit growth.