Functional diversity of alliance portfolio and corporate social responsibility

Abstract

This paper seeks to bridge them by exploring the impact of a firm’s alliance portfolio on its CSR. Drawing from the organizational learning lens, we propose that alliance portfolio represents an important source of knowledge and insights that are necessary for a firm to adopt and implement various CSR practices. As the functional diversity of a firm’s alliance portfolio increases, it can gain more distinctive CSR-related knowledge, and its CSR performance will reasonably increase. Further, we propose that the learning from alliance portfolio demonstrates an incremental nature and is contingent upon the governance structure of a firm’s alliances. The empirical findings in the sample of 521 public firms in China strongly support the positive linkage between functional diversity of alliance portfolio and CSR. The findings also reveal that this relationship weakens for firms with more prior alliances and a higher reputation – two variables we employ to indicate the incremental effects of learning from alliance portfolio. And the relationship becomes stronger as a firm’s portfolio includes more equity-based alliances.