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Small and medium-sized enterprises (SMEs) in Bali: Corporate social responsibility, competitive advantage and its impact on financial performance

Author

Listed:
  • Ni Luh Putu Normadewi A.P

    (Bali State of Polytechnic)

  • I Nyoman Abdi

    (Politeknik Negeri Bali)

  • Ni Made Mega Abdi Utami

    (Politeknik Negeri Bali)

Abstract

Climate-related concerns have drastically made companies realize the need for better environmental regulations and consolidate them in corporate business strategies such as Corporate Social Responsibility (CSR). CSR improves firm performance by valuing the stakeholders' interests and substantially achieving a competitive advantage over competitors. Recognising a firm's competitive advantage in the market indicates performance and might help the company perform better. The objective of this research is to provide concrete proof related to how CSR affects competitive advantage and its effects on company performance, especially financial performance in SMEs in Bali Province. This study uses primary data in the form of questionnaires distributed to SMEs both directly and online. The sample of this research is the manager / owner of SMEs in Bali Province. Data analysis tools using SmartPLS 4.0. The study's findings indicate that CSR has a direct impact on financial performance (SMEs) and CSR indirectly affects the financial performance (SMEs) through competitive advantage. Competitive advantage was found to partially mediate the impact of CSR and financial performance (SMEs). These findings will be used by SME managers in Bali Province in order to enhance the company's financial performance by considering the use of CSR strategies and strengthening competitive advantage. Implementing CSR can help a company become more competitive and separate itself from competitors by providing an innovative product or service. Finally, corporate social responsibility (CSR) can give a company a competitive advantage by strengthening its marketing abilities, which leads to improved performance. Key Words:CSR, Competitive Advantage, Financial Performance

Suggested Citation

  • Ni Luh Putu Normadewi A.P & I Nyoman Abdi & Ni Made Mega Abdi Utami, 2024. "Small and medium-sized enterprises (SMEs) in Bali: Corporate social responsibility, competitive advantage and its impact on financial performance," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(7), pages 66-78, October.
    • Handle: RePEc:rbs:ijbrss:v:13:y:2024:i:7:p:66-78
    DOI: 10.20525/ijrbs.v13i7.3603
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    References listed on IDEAS

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    1. Elif Akben Selcuk & Halil Kiymaz, 2017. "Corporate Social Responsibility and Firm Performance: Evidence from an Emerging Market," Accounting and Finance Research, Sciedu Press, vol. 6(4), pages 1-42, Novebmer.
    2. Wang, Kun Tracy & Kartika, Fiki & Wang, Wanbin Walter & Luo, Guqiang, 2021. "Corporate social responsibility, investor protection, and the cost of equity: Evidence from East Asia," Emerging Markets Review, Elsevier, vol. 47(C).
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