Abstract:

We study the relationship between firm environmental engagement and the nature of import competition in emerging markets by considering differentiation-based import competition. Drawing on the institutional perspective of CSR, we argue that differentiation-based import competition is associated with a reduction in firm environmental engagement because firms in emerging markets are not used to competing on non-price factors. 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 firms in these markets 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 Turkiye over the period 2009-2015. Our study advances research on the relationship between market competition and corporate social responsibility.

General information:

Attendance to this seminar is possible by invitation only. Please send an e-mail to secbs-abs@uva.nl if your are interested in attending this seminar.