So Good, but So Far Away? The Effect of Institutional Distance on the Parent CSR and Subsidiary Reputation Link

F.J. Forcadell, J.J. Nájera-Sánchez, E. Aracil, F. Úbeda

Business Ethics, the Environment & Responsibility Vol. 35, nº. 3, pp. 2412 - 2432

Summary:

Multinational enterprises (MNEs) leverage strategies of Corporate Social Responsibility (CSR) at the parent and subsidiary levels to build a reputation overseas. Nevertheless, institutional distance can weaken this connection in developing host countries, where MNEs face significant institutional voids. We explore the mechanisms through which CSR enhances subsidiary reputation, focusing on how stakeholders in host developing countries perceive CSR signals sent from headquarters. We further explore the moderating role of formal and informal institutional distance in this relationship. Using a panel of MNEs headquartered in developed countries and operating across Latin America, we employ a multi-stakeholder indicator of the subsidiary reputation based on assessments from key host country stakeholders. The analysis controls for country, corporate, and subsidiary-level factors, including a variable derived from big data analytics. By examining the cross-country parent CSR signals and their subsidiary reputation effects, this study advances the international business literature, providing new insights into how institutional distance shapes the local reputational outcomes of parent CSR strategies.

Spanish layman's summary:

Las multinacionales emplean la Responsabilidad Social Corporativa (RSC) para fortalecer su reputación en las filiales, pero la distancia institucional entre países puede debilitar su efecto. El estudio muestra que en países en desarrollo esta distancia reduce el impacto de la RSC en la reputación local.

English layman's summary:

Multinational companies use Corporate Social Responsibility (CSR) to strengthen their reputation in subsidiaries, but institutional distance between countries can weaken its effect. The study shows that in developing countries, this distance reduces the impact of CSR on local reputation.

Keywords: big data ; corporate social responsibility ; emerging countries ; ESG ; institutional distance ; institutions ; reputation

JCR-JIF Impact Factor and WoS quartile: 5,300 - Q1 (2025)

DOI reference: https://doi.org/10.1111/beer.70043

Published on paper: July 2026.

Published on-line: November 2025.

Citation:
F.J. Forcadell, J.J. Nájera-Sánchez, E. Aracil, F. Úbeda, "So Good, but So Far Away? The Effect of Institutional Distance on the Parent CSR and Subsidiary Reputation Link", Business Ethics, the Environment & Responsibility, Vol. 35, nº. 3, pp. 2412 - 2432, July 2026. [Online: November 2025] doi: 10.1111/beer.70043