The Effect of National Corporate Responsibility Environment on Japanese MNCs' Location Choice

We examine the relationship between MNC location choice across countries and the three dimensions (internal, external and environmental) of the national corporate responsibility index (NCRI) using corporate social responsibility (CSR) and international business theories. Based on multidimensional analysis using data from Accountability, Toyo Keizai and other sources, we find that Japanese MNCs are: more likely to locate their subsidiaries in countries with higher levels of corporate governance, ethical practices, and human capital development (the internal dimension), and this relationship is stronger for developed countries; and less likely to locate their subsidiaries in developed countries with higher levels of civil society development (the external dimension), but this relationship is not significant for developing countries; and the relationship between MNCs' location choice and the environmental dimension is not significant in either developed or developing countries. There exist complicated interactions among the three dimensions and a country's development stage in determining MNCs' location choice. The theoretical and practical implications of these findings are discussed in terms of extending CSR theories and attracting MNCs