Title: LOVE WELL, WHIP WELL: POLITICAL AFFINITY, ESG VIOLATIONS, AND REPUTATIONAL PENALTIES

Lecturer: Jun Xia, Professor, Loyola Marymount University

Time: November 3, 2024 (Sunday) 9:30-11:00 am

Venue: School of Business 405

Organizer: Department of Business Administration

Synopsis:

  This study examines how political affinity influences the reputational penalties multinational corporations (MNCs) incur in their home countries for violating environmental, social, and governance (ESG) standards in host countries. Grounded in expectancy violations theory, we argue that stronger political affinity between home and host countries raises home stakeholders’ expectations for responsible corporate behavior abroad. Thus, when ESG violations occur in politically aligned host countries, home stakeholders respond with greater disappointment, leading to more severe reputational penalties. We also identify three key contingencies—violation severity, intentionality, and frequency—that amplify the impact of political affinity on reputational penalties by intensifying stakeholder disappointment. Analyzing a data set of 9,153 ESG incidents involving 547 U.S.-based MNCs, we find evidence largely supporting these claims.

Introduction to the Lecturer:

 Professor Jun Xia currently serves as Professor of Strategic Management at the Kinda Business School at the University of Texas at Dallas. As a renowned Chinese-American expert in international strategic management, his research focuses on four primary areas: ① Organizational Theory (resource dependence, power, and institutional processes); ② Corporate Strategy (mergers and acquisitions, joint ventures, alliances, and divestitures); ③ Social Networks (outcomes of embeddedness); ④ International Business (foreign market entry, state-owned enterprises, and institutional change in transition/emerging economies). ③ Social Networks (Embeddedness Outcomes); ④ International Business (Overseas Market Expansion, State Ownership, and Institutional Change in Transition/Emerging Countries). He has published over 30 high-impact academic papers in leading journals including the Journal of Management, Journal of Strategic Management, Organization Science, Chinese Journal of Management, Management Research, and Organizational Research Methods. His research findings are widely cited within the international strategic management community.