Power, CSR strategy, and performance in foreign‐owned subsidiaries

Abstract

We investigate how a subsidiary's power base influences its strategic corporate social responsibility (CSR) focus on international and local issues, and performance. We develop a theoretical framework and test symmetric hypotheses as well as non‐symmetric research queries based on insights from resource dependency theory and institutional theory. We use survey data collected from foreign‐owned subsidiaries located in the mid‐range emerging economy of Taiwan. We find that a large power base positively influences an international CSR strategic focus in subsidiaries. Furthermore, our symmetric results indicated that only international CSR strategies are conducive to performance. However, our complementing non‐symmetric results show that the distinct power‐base dimensions in combination with a local CSR strategic focus can also lead to high performance outcomes.