CSR Strategy Choice Of Multinational Corporation In Forward Direct Investment With Game Analysis

In the twentieth century, the rapid development of economic globalization stimulates the rapid growth of forward direct investment, and Multinational Corporations constitute the major economies because of its powerful economic strength and intense desire of extending business scope. However, during this process, the lack of corporate social responsibility (CSR) has caused a great concern for society as a whole. Actively caring out social responsibility investment will help Multinational Corporations to establish a good corporate image, further to obtain a successful investment in the host country. So, Multinational Corporations should take into account their own interests at the same time appropriate to carrying out social responsible investment. For Multinational Corporations, how to carry on strategy choice according to the type of themselves and the host response strategies to develop investment plans becomes a new research topic, and this is just the theme of this thesis.Based on the theory of Multinational Corporation’s CSR, this thesis introduces signaling model to analyze how to come to equilibrium in international trade for Multinational Corporations. The model consists of two players:Multinational Corporation and the host country, and their strategic collection includes cooperation and non-cooperation. Multinational Corporations determine the equilibrium type (separating equilibrium or mixed equilibrium) according to the type of companies and the host response strategies, and thus determine the best response strategies, which seek to maximize their own interests while also form a Nash equilibrium with the host country, making overseas investment smoothly and profitably. This mode includes a discussion of the types of Multinational Corporations, the boundaries of the socially responsible investment and host country tax, providing a theoretical reference to CSR strategy choice in forward direct investment. To further illustrate the significance of the existence of the model, this thesis cites an example to verify the improvement of the benefits for the Multinational Corporations and the host country. In order to practice the actual, this thesis analyzes the CSR strategy choice of Wal-Mart China and TCL Vietnam in forward direct investment. Time as a clue, compared to the transformation of Multinational Corporation’s CSR strategy and profit, this thesis further illustrates the significance of CSR strategy of Multinational Corporations.Finally, on the basis of the above study and the current status quo of CSR in China, this thesis provides recommendations for Chinese enterprises’ overseas investment and how to regulate Multinational Corporations in China, which involves sophisticated system, social supervision and awareness of their own responsibility sense, and so on.