Sustaining firm sustainability endeavors: The role of international diversification on firm CSR capability

CSR's role in the international business context has been widely noted. Yet, how firms' cross-border strategies influence firm CSR capability is largely absent in the literature. Our study examines how firm international diversification, as reflected by breadth and depth, affects CSR capability. These relationships are further built into a contingency-based model incorporating the market dynamism and competition intensity. We collect a large dataset with 6069 firm-year observations range from year 2000–2015, and we employ multiple robust methods including Newey-West robust regression and Driscoll-Kraay robust regression to estimate the model. The results demonstrate the significant driving role of international diversification on CSR capability, although diminishing return effects exist in the contingencies. Also, this relationship becomes stronger in more dynamic and more competitive environments. Our research provides unique contributions to the stakeholder theories, strategic CSR theories, dynamic capability view, and international business literature.