Synergy Versus Trade-Off: The Influence of National Philanthropic Environment and Industry on the Relationship Between Research and Development and Corporate Social Responsibility

Abstract

International marketing research has demonstrated that research and development (R&D) and corporate social responsibility (CSR) are firm capabilities that can lead to competitive advantages in the international marketplace. A synergy versus trade-off dilemma on the R&D–CSR relationship has emerged as an important topic in the literature. The synergy approach suggests a positive link between R&D and CSR, whereas the trade-off approach suggests a negative link. The authors employ the resource-, institution-, and industry-based views to clarify this dilemma by examining two moderators at the country and industry levels. The authors envision that home-country national philanthropic environment (NPE) influences whether managers should take synergy or trade-off approach because NPE reflects the institutional pressures for firms to be more philanthropic. Further, because research finds that CSR differs between manufacturing and service firms, this industry categorization is hypothesized to moderate the effects of NPE on the R&D–CSR relationship. Estimating a hierarchical linear model with a sample of 888 firms across 15 countries, the authors show that in high-NPE countries, there is an R&D–CSR synergy, and in low-NPE countries, there is a trade-off. Furthermore, these relationships are relevant only within service industries rather than manufacturing industries.