When Do Multinational Companies Consider Corporate Social Responsibility? A Multi‐country Study in Sub‐Saharan Africa

• Date: 01 June 2017
• DOI: http://doi.org/10.1111/basr.12115
• Published date: 01 June 2017

When Do Multinational

Companies Consider Corporate

Social Responsibility? A Multi-

country Study in Sub-Saharan

Africa

HOLGER G €

ORG, AOIFE HANLEY, STEFAN HOFFMANN, AND

ADNAN SERIC

ABSTRACT

While African countries are becoming more and more rel-

evant as host countries for suppliers of multinational

companies little is known about corporate social responsi-

bility (CSR) in this region. To fill this gap, the present arti-

cle explores CSR considerations of foreign affiliates of

multinational companies when choosing local African

suppliers. The article suggests a model of three types of

determinants, namely firm characteristics, exports, and

intra-trade. Analyses of a large-scale and quite unique

firm level data for more than 2,000 foreign owned firms in

19 sub-Saharan African countries demonstrate that firms

importing intermediates from their parent company

Holger G€

org is Professor of International Economics at the Kiel Centre for Globalization, Kiel

Institute for the World Economy, and University of Kiel, Germany. E-mail: holger.goerg@ifw-

kiel.de. Aoife Hanley is Professor of Applied Economics at the Kiel Centre for Globalization, Kiel

Institute for the World Economy, and University of Kiel, Germany. E-mail: aoife.hanley@ifw-

kiel.de. Stefan Hoffmann is Professor of Marketing at the Kiel Centre for Globalization and Uni-

versity of Kiel, Germany. E-mail: stefan.hoffmann@bwl.uni-kiel.de. Adnan Seric is Research

Economist at the United Nations Industrial Development Organization, Vienna, Austria.

E-mail: a.seric@unido.org.

V

C2017 W. Michael Hoffman Center for Business Ethics at Bentley University. Published by

Wiley Periodicals, Inc., 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington

Road, Oxford OX4 2DQ, UK.

Business and Society Review 122:2 191–220

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abroad are more likely to implement CSR. Similarly, CSR

plays a larger role for affiliates that export to developed

countries. Different determinants affect environmental

and social CSR activities.

INTRODUCTION

In recent years, increasingly complex supply chains have

emerged to exploit advantages of different production locations.

On the one hand, extant literature suggests that multinational

enterprises’ local sourcing in developing countries provides poten-

tial benefits to host country suppliers. Transferring superior

knowledge and working practices may lead to higher productivity

and competitiveness of these firms (e.g., Godart and G€

org 2013;

G€

org and Seric, 2016; Kokko and Thang 2014). On the other hand,

concerns have been raised that, if multinationals focus on cost

reductions in the local supplier, outsourcing of production activi-

ties to low-income countries undermines environmentally and

socially responsible behavior. A striking example is the Rana Plaza

building near Dhaka, Bangladesh, which collapsed due to struc-

tural failure. The accident caused the deaths of more than one

thousand garment factory workers in April 2013 (BBC 2013). The

factories housed their manufactured apparel for many internation-

al retailers, including Benetton, Carrefour, and Walmart. Another

negative example that gained publicity in January 2012 is the pro-

test against poor working conditions of about 150 workers at the

Chinese electronic company Foxconn, an important supplier for

Apple, by threatening to commit suicide (The Telegraph 2012).

Fueled by the outlined recent tragedies alluded, the (un)ethical

behavior of multinational companies operating in global supply

chains has sparked much interest in the public debate and in aca-

demic circles. The question of corporate social responsibility (CSR)

across global supply chains has to be extended beyond such high-

profile cases to general concerns about the physical and economic

conditions of workers in the low-income links of supply chains.

Therefore, the purpose of this article is to explore the conditions

under which local affiliates of multinational companies operating

in the host country consider CSR in their choice of suppliers. To

192 BUSINESS AND SOCIETY REVIEW