Extrinsic and Intrinsic Drivers of Corporate Social Performance : Evidence from Foreign and Domestic Firms in Mexico

The literature on corporate social performance (CSP) is largely split between approaches that consider CSP to be extrinsically driven and those that consider it to be intrinsically driven. While some studies in the management literature have paid attention to drivers of both types, the relationship between the two remains largely unstudied, particularly in the international setting. Meanwhile, the international business (IB) literature has addressed the international dimension of CSP more directly, but has focused largely on extrinsic pressures. This paper aims to link the management and IB literatures by addressing intrinsic drivers, specifically management commitment to ethics, in conjunction with extrinsic (trade-related) drivers for both foreign- and domestically-owned firms in a single-market setting. Using survey data from 121 foreign and local auto parts suppliers in Mexico, we find that management commitment to ethics is a dominant driver of CSP among both foreign and domestic firms. More importantly, management commitment to ethics interacts positively with trade-related pressures to raise CSP levels. Contrary to extant research, we find that foreign ownership is not related to higher CSP nor does it moderate the role of trade pressures or management commitment to ethics. Implications for research and practice are discussed