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Corporate Social Responsibility in a Competitive Business Environment

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  • Carol Newman
  • John Rand
  • Finn Tarp
  • Neda Trifkovic

Abstract

Using a representative sample of more than 5,000 Vietnamese enterprises, we explore the firm-level productivity effects of corporate social responsibility (CSR). The data enables us to create 12 quantitative CSR measures, which can be grouped into two broader categories related to management and community-based CSR initiatives. We find a positive relationship between adoption of CSR initiatives and firm efficiency, and reveal that the impact is stronger for firms in non-competitive industries. Moreover, we show that local community focused CSR initiatives drive the aggregate effect. This suggests that socially responsible actions by firms are likely to pay-off when stakeholder engagement has a localised focus. We provide evidence of reciprocity by showing that employees accept a lower share of additionally generated value-added (controlling for productivity differences) in exchange for working in a company that signals ‘good’ corporate values.

Suggested Citation

  • Carol Newman & John Rand & Finn Tarp & Neda Trifkovic, 2020. "Corporate Social Responsibility in a Competitive Business Environment," Journal of Development Studies, Taylor & Francis Journals, vol. 56(8), pages 1455-1472, July.
  • Handle: RePEc:taf:jdevst:v:56:y:2020:i:8:p:1455-1472
    DOI: 10.1080/00220388.2019.1694144
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    References listed on IDEAS

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    1. Carol Newman & John Rand & Finn Tarp, 2013. "Industry Switching in Developing Countries," World Bank Economic Review, World Bank Group, vol. 27(2), pages 357-388.
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    6. Newman, Carol & Rand, John & Tarp, Finn & Trifkovic, Neda, 2018. "The transmission of socially responsible behaviour through international trade," European Economic Review, Elsevier, vol. 101(C), pages 250-267.
    7. Patricia Crifo & Vanina D. Forget, 2015. "The Economics Of Corporate Social Responsibility: A Firm-Level Perspective Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(1), pages 112-130, February.
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    11. Newman, Carol & Rand, John & Talbot, Theodore & Tarp, Finn, 2015. "Technology transfers, foreign investment and productivity spillovers," European Economic Review, Elsevier, vol. 76(C), pages 168-187.
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    2. Anteneh Mulugeta Eyasu & Demoz Arefayne & Collins G. Ntim, 2020. "The effect of corporate social responsibility on banks’ competitive advantage: Evidence from Ethiopian lion international bank S.C," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1830473-183, January.
    3. Laszlo Goerke, 2022. "Trade unions and corporate social responsibility," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(1), pages 177-203, March.
    4. Minh, Thanh Nguyen & Quang, Tuyen Tran, 2022. "The effects of corporate social responsibility on firm efficiency: Inside the matrix of corporate finance," Finance Research Letters, Elsevier, vol. 46(PB).
    5. Forgione, Antonio Fabio & Migliardo, Carlo, 2020. "CSR engagement and market structure: Evidence from listed banks," Finance Research Letters, Elsevier, vol. 35(C).
    6. Van, Huong Vu & Ly, Kim Cuong, 2021. "Does rising corporate social responsibility promote firm tax payments? New perspectives from a quantile approach," International Review of Financial Analysis, Elsevier, vol. 77(C).
    7. Yubin Zheng & Md. Harun Ur Rashid & Abu Bakkar Siddik & Wei Wei & Syed Zabid Hossain, 2022. "Corporate Social Responsibility Disclosure and Firm’s Productivity: Evidence from the Banking Industry in Bangladesh," Sustainability, MDPI, vol. 14(10), pages 1-19, May.
    8. , Aisdl, 2020. "Corporate social responsibility and firm financial performance: A literature review," OSF Preprints aymk7, Center for Open Science.
    9. Ma Ying & He Shan & Gashaw Awoke Tikuye, 2021. "How Do Stakeholder Pressures Affect Corporate Social Responsibility Adoption? Evidence from Chinese Manufacturing Enterprises in Ethiopia," Sustainability, MDPI, vol. 14(1), pages 1-23, December.
    10. Minh, Thanh Nguyen & Ngoc, Anh Mai & Tuan, Anh Nguyen & Dao, Tung Nguyen, 2022. "Corporate social responsibility, market rivalry and firm leverage: new evidence from a fixed-effect quantile regression approach," Finance Research Letters, Elsevier, vol. 47(PB).

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