Corporate international diversification and corporate social responsibility: Evidence from Korean firms

Abstract

In the process of their market globalization efforts in Korea, they have been positively utilizing corporate international diversification strategies to increase sales in overseas markets or reduce risks based on business diversification strategies. However there is mixed empirical results have been made on whether the corporate international diversification strategy made a positive or negative impact to the firm value. Extending Prior literatures, this study investigates the impacts of the level of corporate international diversification of Korean firms onto that of their corporate social responsibility activities. Empirical result suggest that there is negative (-) association between the level of corporate international diversification and corporate social responsibility activities. In particular, this study is meaningful in demonstrating an empirical result that, even if the Korean firms pushed forward corporate international diversification strategies actively due to the stagnant domestic market in the 2000s, they actually reduced corporate social responsibility activities more greatly as they were recognized as the short-term expenses.