Doing Great by Doing Good: The Impact of Corporate Social Responsibility on Knowledge Acquisition Through Foreign Subsidiaries

This study examines how corporate social responsibility (CSR) enhances knowledge acquisition of multinational enterprises (MNEs) through overseas subsidiaries. Building on institutional theory and resource‐based view, we hypothesize a positive relationship between CSR and foreign knowledge acquisition. Specifically, CSR enhances firms' legitimacy and local embeddedness. External legitimacy allows firms to gain knowledge from their foreign partners. Meanwhile, internal legitimacy promotes trust and strong relationships between headquarters and subsidiaries, fostering knowledge acquisition. Additionally, conventional wisdom suggests that firm efficiency negatively relates to knowledge‐related activities. Without slack resources, efficiency‐focused MNEs struggle to engage in R&D. In this study, we argue that CSR weakens the negative impact of firm efficiency (financial and operational) on knowledge acquisition. The institutional logics of CSR influence MNEs to adopt a long‐term focus while enhancing resource accessibility and allocation for knowledge‐related activities. An empirical analysis of 135 US‐based pharmaceutical firms with 3393 subsidiaries during 2013–2020 supports our hypotheses.