Social Investments of Russian Businesses Abroad

The article discusses the current state of socially oriented investments of Russian business abroad, in order to assess the role of corporate social responsibility (CSR) in the activities  of companies.  Academic literature encompasses various explanations driving enterprises to assume social responsibility. Such pluralism as well as difficulties in identifying of long-term consequences of social investments makes it hard to assess their effectiveness. Nevertheless, CSR has become the generally accepted  standard  of business behavior, and in some cases, the mandatory requirement of national  regulators.  In  Russian practice, this recognition is often less pronounced than abroad. As a result, Russian enterprises are also less inclined to implement CSR projects than Western companies. A similar trend is also characteristic of foreign businesses operating in Russia. However, when entering foreign markets, Russian corporations adopt international rules of the game. In particular, when they operate in developing countries, they often imitate practices of foreign competitors, investing in social infrastructure in areas of their activities, in formation of local human capital, and in compliance with high environmental standards. Moreover, CSR activities carried out by Russian companies abroad demonstrate sectoral specificity. Real sector enterprises focus on the development of physical infrastructure and human capital, while  representatives  of  the financial sector implement their social responsibility through supporting and lending projects that meet a range of environmental and social international standards. In conclusion, the author draws a number of recommendations to Russian  businesses regarding adoption  of CSR in  operations in foreign  markets. First, in the context of high competition from foreign players, CSR should be integrated in a systematic manner by Russian businesses and implemented as part of a overall business strategy in foreign countries. Second, in order to increase direct commercial benefits for business in the framework of socially-oriented projects, it seems necessary to reconcile social and environmental goals with financial ones. Third, in the context of expanding the scale of a ‘lean’ economy and growing environmental responsibility, investing in CSR projects should remain a priority for companies.

1. Bebbington A. (1993). Non-Governmental Organisations and the State in Latin America: Rethinking Roles in Sustainable Agricultural Development. London: Routledge. 210 p.

2. Henderson D. (2001). Misguided Virtue: False Notions of Corporate Social Responsibility. Wellington, N.Z.: New Zealand Business Roundtable. 94 p.

3. Hopkins M. (1998). The Planetary Bargain: Corporate Social Responsibility Comes of Age. London: Macmillan. 272 p.

4. Hopkins M. (2012). Corporate Social Responsibility and International Development: Is Business the Solution? London: Earthscan. 243 p.

5. King B.G. (2008). A Political Mediation Model of Corporate Response to Social Movement Activism. Administrative Science Quarterly. Vol. 53. No. 3. P. 395–421.

6. Kotler P., Roberto E.L. (1989). Social Marketing: Strategies for Changing Public Behavior. N.Y.: Free Press. 401 p.

7. International Trends. Volume 16. No. 3 (54). July–September / 2018

8. Mayer F., Gereffi G. (2010). Regulation and Economic Globalization: Prospects and Lim its of Private Governance. Business and Politics. Vol. 12. No.3. P. 1–25.

9. McIntosh M, Leipziger D, Jones R, Coleman G. (1998). Corporate Citizenship: Successful Strategies for Responsible Companies. Financial Times/Prentice Hall. 346 p.

10. Pava M.L., Krausz J. (1995). Corporate Social Responsibility and Financial Performance: The Paradox of Social Cost. Westport, CT: Quorom Books. 176 p.

11. Raftopoulos B. (2010). The state, NGOs, and democratization. In: Moyo S., Makumbe J., Raftopoulos B. (eds) NGOs, the State and Politics in Zimbabwe. Harare: SAPES. P. 115–134.

12. Soysa I. Oneal J. (1999). Boon or Bane? Reassessing the Productivity of Foreign Direct Investment. American Sociological Review. Vol. 64. No. 5. P. 766–782.

13. Stiglitz J.E. (2002). Globalization and Its Discontents. N.Y.: Norton. 282 p.

14. Udayasankar K. (2008). Corporate Social Responsibility and Firm Size. Journal of Business Ethics. Vol. 83. No. 2. P. 167–175.

15. Zaytsev Yu. (2017). International multilateral assistance for socio-economic development of the poorest countries of South-East Asia. Journal of International Development. Vol. 29. No. 2. P. 249–258.