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FDI Spillovers on Corporate Social Responsibility: The Channel of Labor Mobility

Author

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  • Yi Zhang

    (Jinhe Center for Economic Research, Xi’an Jiaotong University, Xi’an 710049, China)

  • Qianqian Shang

    (Center for Monetary and Financial Studies (CEMFI), 28014 Madrid, Spain)

  • Chun Liu

    (Jinhe Center for Economic Research, Xi’an Jiaotong University, Xi’an 710049, China)

Abstract

This paper examines the spillover effects of foreign direct investment on corporate social responsibility of domestic firms, with a focus on the channel of labor mobility. With a corporate social responsibility measure based on corporate responsibility toward the environment, the public, the employees, and the consumers, we test whether and how foreign direct investment affects corporate social responsibility of Chinese firms. Our results show that firms run by entrepreneurs who have work experience and, especially, management experience in multinational enterprises investing in China conduct more corporate social responsibility activities compared with firms run by entrepreneurs without such experience. We further find that multinational enterprise management experience may enhance the entrepreneurial self-assessment of social status, broaden the international vision of entrepreneurs, and reduce the level of firm family control, which help increase firms’ uptake of corporate social responsibility activities. Our results suggest that foreign direct investment can serve as a vehicle for sustainable development, through the transfer of corporate social responsibility-related managerial knowledge from foreign to local firms.

Suggested Citation

  • Yi Zhang & Qianqian Shang & Chun Liu, 2018. "FDI Spillovers on Corporate Social Responsibility: The Channel of Labor Mobility," Sustainability, MDPI, Open Access Journal, vol. 10(11), pages 1-22, November.
  • Handle: RePEc:gam:jsusta:v:10:y:2018:i:11:p:4265-:d:183734
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