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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.
    2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    3. 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.
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    10. 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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    Cited by:

    1. Goerke, Laszlo, 2020. "Trade Unions and Corporate Social Responsibility," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224609, Verein für Socialpolitik / German Economic Association.
    2. Forgione, Antonio Fabio & Migliardo, Carlo, 2020. "CSR engagement and market structure: Evidence from listed banks," Finance Research Letters, Elsevier, vol. 35(C).

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