Multinational Corporations and Their Corporate Citizenships: Exploring Their Effects on Corporate Performance Under Different Legal Traditions

ABSTRACT In this paper, we focus on the conceptualization of corporate citizenship and examine the effects of its tangible manifestation, in the form of corporate philanthropy, on company performance recognizing the importance of the institutional contexts where companies are embedded. Based on a sample of 752 multinational companies that have joined the UN Global Compact, we explore the derived benefits, using as a moderator the legal environment where companies operate. The results of the random‐effect regression analysis show the existence of a positive relationship between corporate citizenship and corporate market valuation over the study period (2016–2022). Findings on corporate citizenship are consistent with previous studies, and the role of the legal tradition emerges as a salient avenue for future investigation. Companies that highly leverage the philanthropic dimension of corporate citizenship and are primarily embedded in a common‐law tradition benefit more than those operating in a civil‐law system.