Abstract
The aim of this study is to investigate the impact of corporate social responsibility on firm performance using a longitudinal design in small and medium-sized enterprises (SMEs). The reported study was conducted in a Sub-Saharan African developing country, Zambia. Data were collected from 153 entrepreneurs in two surveys and changes in CSR and firm performance measures were analysed over a 12-month period using SmartPLS structural equation modelling. The findings show that the relationship between CSR and financial performance is significant. Further, the association between CSR and the two measures of firm performance (corporate reputation and employee commitment) was only partially significant over time. We discuss the relevance of these results for entrepreneurs, researchers and policy makers in understanding the outcomes of sustainability practices in SMEs in developing countries, especially in Sub-Saharan Africa.
Highlights
The past couple of decades have seen a growing interest in Corporate Social Responsibility (CSR) research in both commerce and academia
We analyse the data and present the results of the study using a longitudinal approach based on the data collected at both times or waves, that is data collected in the first fieldwork (t1) and data collected in the second fieldwork (t2) to enable us conclude if CSR affects firm performance over time
The items used to measure corporate reputation, employee commitment, environmental-CSR, financial performance and Social-CSR are listed in Table 1 together with the results of SmartPLS confirmatory factor analysis (CFA), reliability test, and Average Variance Explained (AVE)
Summary
The past couple of decades have seen a growing interest in Corporate Social Responsibility (CSR) research in both commerce and academia. Kechiche and Soparnot [8] called for the investigation of the links between responsible management for SMEs and financial performance in developing countries Those that have examined the link between CSR and firm performance have used cross sectional study designs (e.g., [2,5]), and there are few longitudinal studies examining this association, making it impossible to establish the presence or absence of a causal effect. This may account for variance in the reported results [9]. The longitudinal approach could help clarify the casual structure of the relationships between CSR and firm performance [9,10]
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