How Do Stakeholder Pressures Affect Corporate Social Responsibility Adoption? Evidence from Chinese Manufacturing Enterprises in Ethiopia

Abstract

In today’s globalized world, one of the great challenges for enterprises is integrating CSR adoption into their operations. The study aims to investigate how stakeholder pressure influences the adoption of corporate social responsibility (CSR) practices by Chinese medium and large-scale manufacturing enterprises in Ethiopia. This study used a mixed-methods research approach that includes primary and secondary data sources. The employed research data were analyzed using stakeholder theory, structural equation modeling, and multivariate regression analysis to identify the causal relationship between the stakeholder pressures and CSR adoption. The finding shows that overseas Chinese medium and large-scale enterprises at least have CSR awareness to meet compliance requirements. Comparatively, employees, community, and customers are the most influential and significant factors determining the enterprises’ stakeholder pressure on the CSR engagement. The finding indicates that Chinese enterprises are unrecognized for their CSR contribution due to a lack of public relation in displaying what they display the firms are doing. There is no strong link between Chinese manufacturing enterprises and the regulatory stakeholders to implement inclusive CSR awareness and eliminate conflicts of interest on legal frameworks. The study proposed some recommendations to solve the gaps regarding indifference to CSR adoption, the community’s lack of concern for CSR, and lack of proactive involvement. Government laws are required to legally control unbalanced practices and distorted views, as well as to guide fixing conflicts of interest. These finding are important for enterprises, policymakers, government officials, and local and foreign investors to identify, understand, and use the driving factors of stakeholder pressures on CSR practices.