Abstract

We study the relationship between firm environmental engagement and the nature of import competition in emerging markets by distinguishing between differentiation-based and cost-based import competition. Drawing on the institutional perspective of CSR, we argue that differentiation-based import competition is associated with a greater reduction in firm environmental engagement than cost-based import competition. Firms in emerging markets are not used to competing on non-price factors. Thus, they cut corners and reallocate their resources away from environmental activities to investments in capital stocks. We also advance that the reduction in a firm’s environmental engagement is less pronounced for firms with higher product quality and more diversified product portfolios because they can leverage customer loyalty and reduce the “directness” of foreign competition, respectively. We test and find support for our arguments on a sample of manufacturing firms in Turkey over the period 2009-2015. Our study advances research on the relationship between market competition and corporate social responsibility.

Bio:

Grazia D. Santangelo is Professor of Strategic and International Management at Copenhagen Business School. She researches across the fields of international business, global strategy, and innovation management. Her most recent research concerns MNEs’ strategies in the context of Grand Challenges and geopolitical tensions. She is a Sonoco Visiting Fellow in International Business at the Darla Moore School of Business, University of South Carolina, a Visiting Professor at Henley Business School and holds a part-time professorial appointment at the University of Catania (Italy). Her research has been published in leading journals such as Journal of International Business Studies, Journal of Economic Geography and Organization Science. She is the co-editor of Global Strategy Journal and a member of the Editorial Review Board of Academy of Management Review, Journal of International Business Studies, Journal of Management Studies, and Journal of World Business. She is a Fellow of the Academy of International Business and the European International Business Academy, and an elected member of the Executive Committee of the Academy of Management International Management Division.