Foreign direct investment and corporate social responsibility: evidence from South African listed firms

This study investigates empirically the impact of inward FDI on host firm Corporate Social Responsibility (CSR) performance in South Africa. The data used for the study was sourced from the Johannesburg Stock Exchange and the Public Investment Corporation Governance Survey index for a period of 3 years ranging from 2011 to 2013. The study employs Panel Corrected Standard Errors (PCSE) and Seemingly Unrelated Regression (SUR) to estimate the effect of FDI on CSR and thus addresses contemporaneous cross-correlations across the panel cross-sections as well as endogeneity between FDI and CSR. It is established from the study that FDI has a strong positive impact on firm CSR performance. When CSR is decomposed further into its major components, FDI positively impacts social and environmental components but has no impact on governance components.