A Contingent Resource-Based Perspective on Corporate Social Responsibility and Competitive Advantage: A Focus on Transition Countries.

Abstract

Although many studies investigate the relationship between corporate social responsibility (CSR) and performance, they mainly explore the U.S. and Western developed countries and ignore other emerging economies and transition countries. However, the Contingent Resource-Based View (Contingent RBV) argues that the CSR-performance link varies across different business environments. Due to the absence of relevant research, little is known about the underlying mechanisms associated with the CSR-performance nexus in transition countries. Thus, the aim of this research is to investigate the moderating role of the business environment, namely dynamism, on the CSR-performance relationship in the banking sector of 21 transition countries for the period 2002 to 2014. We specifically chose the period of 2002-2014 as this best captured a mix of turbulent and stable transition countries. This study applied system GMM while exploring an unbalanced panel sample for 319 commercial banks and considering the dynamic nature of bank performance. Moreover, this approach allowed us to control the endogeneity problems successfully. The findings indicated that the direct association between CSR and performance was negative, but the opposite was confirmed when the link was moderated by Dynamism. Specifically, system GMM showed that Total CSR, Community involvement and Environment had a positive association with banks’ competitive advantage in a dynamic context. This study concluded by highlighting the theoretical and managerial implications.