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Internationalization and firm performance: moderating role of multi-stakeholder initiatives

Sang-Bum Park (School of Management, University of Bradford, Bradford, UK)

Multinational Business Review

ISSN: 1525-383X

Article publication date: 22 August 2023

Issue publication date: 1 November 2023




Previous scholars have assumed that multinational enterprises (MNEs) can reduce the liability of foreignness and increase profitability by investing in corporate social responsibility (CSR). However, empirical validation of this assumption has rarely been attempted. This study aims to provide empirical evidence that the adoption of multi-stakeholder initiatives, which are globally recognized as signals of CSR, helps MNEs increase profits from internationalization.


Fixed effect models, which address model misspecification problems, and instrumental variable estimation, which controls for the endogeneity in firms’ choice of internationalization, offer empirical evidence supporting the moderating effects of global multi-stakeholder initiatives on the relationship between internationalization and firm performance.


This study examines the moderating role of multi-stakeholder initiatives in the relationship between internationalization and firm performance, drawing on signaling and stakeholder theories. The results suggest that the signaling effect of multi-stakeholder initiatives can help MNEs overcome the liability of foreignness and, therefore, profit from overseas markets.


Although the internationalization–firm performance relationship has been a subject of debate in the field of international business, the role of firms’ stakeholder engagement in this relationship has been largely overlooked in previous studies. In this study, the authors explore the impact of multi-stakeholder initiatives on the internationalization–firm performance relationship. Our primary contention is that multi-stakeholder initiatives have moderating effects on this relationship by reducing the liability of foreignness experienced by MNEs in host countries. Furthermore, the findings suggest that active engagement in multi-stakeholder initiatives significantly contributes to the financial success of MNEs as they internationalize.



The author is grateful to Chang Hoon Oh and two anonymous reviewers for their insightful feedback and constructive criticism during the review process. The author would also like to express the gratitude to Hicheon Kim, Seung-Hyun Lee, Jaeyong Song, Jay Hyuk Rhee, Jon Jungbien Moon, Olav Sorenson, Christopher F. Baum, Chengang Wang, Yingqi Wei and Weichieh Su for their valuable comments and guidance. The earlier drafts of this paper were presented at the 42nd Annual European International Business Association Conference, held in Vienna in December 2016, and at the 59th Annual Meeting of the Academy of International Business, which took place in Dubai in July 2017.


Park, S.-B. (2023), "Internationalization and firm performance: moderating role of multi-stakeholder initiatives", Multinational Business Review, Vol. 31 No. 4, pp. 518-544.



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