Nonmarket strategy in emerging markets: The link between SMEs’ corporate political activity, corporate social responsibility, and firm competitiveness

Abstract

Motivated by inconsistent findings in prior research on nonmarket strategy (NMS), we draw on insights from the resource-based view (RBV) and institutional literature to examine the relationship between corporate political activity (CPA) and corporate social responsibility (CSR) on firm competitiveness. Data from two African and two Asian countries (N = 499) largely support the hypotheses and extend our understanding of the contingencies that affect the relationship between CPA as well as CSR and firm competitiveness. We specifically highlight the moderating role of economic adversity, marketing capability, and foreign ownership. Additionally, we show that CPA and CSR have strong combined effects that allow small and medium enterprises (SMEs) to leverage their resource complementarity to navigate the challenges in emerging markets, which in turn enhances their competitiveness.