A New Perspective on Corporate Social Responsibility for MNEs: Real Options Theory

There have been different perspectives on multinational enterprises’ (MNEs’) corporate social responsibility (CSR) involvement in their foreign affiliates (Christmann, 2004). On the one hand, some (e.g., Vernon, 1998) argue that MNEs exploit cross-country differences by adapting their subsidiaries’ environmental, legal, and regulatory standards to those of the host country, thereby reducing their CSR involvement (i.e., the local exploitation approach). On the other hand, more recent evidence (e.g., Dowell et al., 2000) suggests that some MNEs increasingly self-regulate their operations and implement more globally uniform CSR standards (i.e., the self-regulation approach).