Exploring Corporate Philanthropy, Home Country Foreign Aid, and Country of Origin-Based Stigma for Multinational Enterprises: An Experimental Study

This study aims to advance the understanding of the effectiveness of strategies addressing the country of origin (COO)-based stigma of a multinational enterprise (MNE), a persistent form of liability of the COO. On the basis of integrated insights from research on stigma by association and identity salience, we propose that when an MNE's home country is implicated in a negative global event, similar strategies at different levels (corporate philanthropy and foreign aid) would differentially affect its COO-based stigma resulting from its association with its home country. The results of scenario-based experimental analyses indicate that while MNEs’ philanthropic efforts reduce stigma, aid from their home country increases stigma among host country consumers.