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Corporate Social Responsibility in Global Supply Chains: Deeds Not Words

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  • Görg, Holger
  • Hanley, Aoife
  • Seric, Adnan

Abstract

The disconnect between the lofty aspirations of firms claiming Corporate Social Responsibility (CSR) and their shortcomings in practice have caused some observers to question its usefulness. The fallout from events like the Rana Plaza catastrophe has highlighted some of these shortcomings—namely, deficiencies in how multinational enterprises (MNEs) transact with suppliers in developing countries. Specifically, our paper aims to investigate whether or not MNEs behave hypocritically by examining the alignment of CSR to business practices in MNE affiliates in developing countries. To answer this question, we apply standard ordinary least squares (OLS) techniques to data for over 1000 MNEs that claim to have a CSR ethos. We find that CSR-active enterprises report significantly higher worker wages, ceteris paribus. Local African suppliers benefit from CSR through knowledge transfer, but only when MNEs make tangible investments in supplier development.

Suggested Citation

  • Görg, Holger & Hanley, Aoife & Seric, Adnan, 2018. "Corporate Social Responsibility in Global Supply Chains: Deeds Not Words," Open Access Publications from Kiel Institute for the World Economy 226016, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkie:226016
    DOI: 10.3390/su10103675
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    Cited by:

    1. Philipp Herkenhoff & Sebastian Krautheim & Finn Ole Semrau & Frauke Steglich, 2021. "Corporate Social Responsibility along the Global Value Chain," CESifo Working Paper Series 9498, CESifo.
    2. Shahid Karim & Kong Xiang & Abdul Hameed, 2021. "Investigating social development inequality among steel industry workers in Pakistan: A contribution to social development policies," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-16, June.
    3. Oliver Godart & Holger Goerg & Aoife Hanley, 2020. "Harnessing the Benefits of FDI in African Countries," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 21(02), pages 32-37, July.
    4. Görlich, Dennis & Hanley, Aoife & Liu, Wan-Hsin & Semrau, Finn Ole, 2020. "Fostering the development of the coffee global value chain," Kiel Working Papers 2170, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    corporate social responsibility; corporate hypocrisy; Africa; wages; knowledge transfer;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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