We analyze how participating in multisectoral partnerships affects firms’ social performance. Drawing on the knowledge-based view, we propose that participating in multisectoral partnerships enhances firms’ social performance thanks to the knowledge sharing and integration among partners helping tackle knowledge complexity and allowing for better solutions of firms’ social initiatives that support the creation of positive externalities and improved impact. We also argue that greater knowledge complexity in terms of activities, targets, and geographical location modifies this relationship. We test these ideas on a hand-collected data for 1,118 firm-year observations of the 178 largest US pharmaceutical firms from 2013 to 2022. We find evidence of a bell-shaped relationship between participating in MSPs and firms’ social pillar of the ESG (Environment, Governance, Society) indicator and that complexity in activities reduces the relationship while complexity in targets increases them. We contribute on the social responsibility and performance of firms, and on MSPs as a potential support to firm’s sustainability strategy.
