Abstract
Do (good) firms behave the way theory suggests? Multinational enterprises (MNEs) are often assumed to be engaged in a ‘quest for legitimacy’ – where substantial and far-reaching efforts are made to establish and protect this ‘hard won’ and ‘easily lost’ resource. However, variance in - and breaches of - corporate social responsibility (CSR) expectations across international markets indicate that even those MNEs deemed most ‘socially responsible’ may not always ‘prize’ and ‘protect’ legitimacy according to the ways in which theory suggests. In order to deepen our understanding, this paper draws on theories of legitimation to explore the entry mode choices of multinational firms into markets with varying CSR distance. We theorize that firm motivations to ‘protect’ versus ‘build’ legitimacy reflect two distinct legitimation processes, with significant consequences for the entry modes choices implemented by the MNE. Building on these insights, we unpack how increased/decreased levels of corporate social performance (CSP) shape firm legitimation and FDI behaviors in ways not widely reflected in the extant international management literature. Utilizing a comprehensive sample of 44,720 FDI events between 2013-2019, this paper contributes to advancing theory on the quest for legitimacy in international business and management.