CSR orientation for competitive advantage in business-to-business markets of emerging economies: the mediating role of trust and corporate reputation

Abstract

Purpose This study aims to examine the link between corporate social responsibility orientation (CSRO) and competitive advantage (CA) in the context of emerging economies. More specifically, the mediating role of intangible resources, namely, trust and corporate reputation (CR), is investigated to explain the above linkage. Design/methodology/approach This study considered a sample of 326 Saudi Arabian businesses that have extensive business-to-business operations across international markets. The analysis uses the partial least-squares-based structural equation model, involving first- and second-order constructs and mediation tests using the Hayes PROCESS macro. Findings The results confirm that the relationship between CSRO and CA is partially mediated. Moreover, CSRO does have a direct as well as an indirect positive impact on CA via the two intangible resources, e.g. trust and CR. In addition, results support the serial mediation model where CSRO was found to exercise its influence on CA via trust and CR in a sequential manner. Research limitations/implications This study enriches the limited literature on CSRO in the context of emerging economies. However, further studies should explore the opposite relationship, i.e. the impact of CA on CSRO. In addition, the authors believe that it would also be useful to study the moderating role of the industry sectors. Practical implications From a practical point of view, this study suggests new applications with respect to the link between CSRO and CA. To enhance their company’s CA, managers need to ensure that intangible resources are managed efficiently. Originality/value This paper contributes to the literature by examining how a firm’s intangible resources mediate between CSRO and CA. Second, originality is related to studying the link between CSRO and the trust and reputation of business organizations in emerging economies. Third, the findings suggest that the scope of a business is more than being responsible to its stakeholders, and stakeholder-driven CSRO leads to sustainable CA.

Affect-based dimensions of trust: a study of buyer-supplier relationships in Thai manufacturing

“…Third, PLS-SEM is more suitable for relatively small sample sizes (Sarstedt et al , 2019) and has, thus, been applied in recent industrial marketing studies with similar sample sizes (e.g. Hossain et al , 2020; Husain et al , 2022; Zhou et al , 2022; Salam and Jahed, 2023). Therefore, we used the PLS-SEM approach with SmartPLS 3.3.3 for testing the model and report Barron and Kenney approach as a robustness test (see Appendix).…”

Corporate Social Responsibility Strategy Practices, Employee Commitment, Reputation as Sources of Competitive Advantage

“…Although there existed a correlation between CSR and CCA, the exact nature of the correlation was unknown (Mackey et al, 2007; McWilliams & Siegel, 2001; Porter & Kramer, 2006). While the majority of research supported the idea that CSR and CCA were positively correlated (El-Garaihy et al, 2014; Melo & Galan, 2011; Rasheed & Ahmad, 2022; Salam & Jahed, 2023; Vilanova et al, 2009), some studies found the opposite correlation between the two factors (Cordeiro & Sarkis, 1997) and some confirmed a neutral relationship (Wagner, 2005). Orlitzky et al (2003) proposed the idea that CSR was mutually reinforcing under some conditions.…”

“…Businesses are striving for market position and domination in an unstable environment, resultantly, the strategic advantage in practicing CSR is the foundation upon which this degree of success is constructed. Over decades, scholars have strived to explore factors that foster CCA and found that corporate social 1 International University, Ho Chi Minh City, Vietnam 2 Vietnam National University, Ho Chi Minh City, Vietnam 3 Thu Dau Mot University, Binh Duong, Vietnam responsibility (CSR) acts as one of its most crucial drivers (Rasheed & Ahmad, 2022;Salam & Jahed, 2023). During the global recession, firms are under the pressure to act ethically, environmentally, morally, philanthropically, and economically responsible for the society and the environment where they operate in order to improve their reputation, employee commitment, achieve sustainable long-term development (El-Garaihy et al, 2014;Luo & Bhattacharya, 2006).…”

“…While some studies revealed that the CSR-CCA relationship is positive, and socially responsible firms can obtain and sustain a competitive edge (McWilliams & Siegel, 2011; Nyuur et al, 2019), others argue that the cost for CSR implementation has caused collateral and financial damage to the company (Barauskaite & Streimikiene, 2021; Tencati et al, 2008). This results in a belief among scholars that there might be other factors that affect or mediate the CSR-CCA relationship (Bashir, 2022; Salam & Jahed, 2023). Unfortunately, there has been little research in this domain, which highlights a gap for future research.…”

Employee perspective on site accidents and corporate reputation in developing countries

“…Activities of firms that tend to serve as cues or signals to stakeholders include strategic postures and social responsibility actions (Vander and d'Angelo 2022). Other aspects of the signalling theory include market signals, institutional signals and strategic signals (Zerbini 2017;Constantino et al 2021;Salam and Jahed 2023). Market signals refer to unintentional information sent to stakeholders such as competitors, customers, suppliers, governments, bondholders and communities (Herbig 1996).…”