The Influence of Corporate Social Responsibility Aspects on Business Model Innovation, Competitive Advantage, and Company Performance: A Study on Small- and Medium-Sized Enterprises in Iran

Abstract

This study explores how the dimensions of corporate social responsibility (CSR) as defined by Carroll, along with environmental responsibility, impact business model innovation (BMI), competitive advantage, and firm performance in small- and medium-sized enterprises in Iran. This paper proposes a theoretical framework, based on past studies. Afterward, structural equation modeling was used to test the conceptual model. The data of this research were collected face-to-face, and 483 valid questionnaires were collected from small- and medium-sized businesses in Iran. The results show that all dimensions of CSR (except philanthropic) directly and significantly affect Business Model Innovation. Furthermore, the competitive advantage is significantly impacted by the economic, legal, and ethical aspects of CSR. Additionally, the findings demonstrate that both BMI and competitive advantage play a direct and substantial role in influencing a company’s performance. This study represents one of the initial investigations to specifically analyze how each facet of corporate social responsibility influences Business Model Innovation and competitive advantage. It is worth noting that a new dimension, environmental responsibility, was incorporated into Carroll’s original model due to the growing significance of environmental concerns. This paper gives managers a better insight into CSR and its effects on company performance. In addition, it shows managers which aspects of CSR can have an impact on BMI and competitive advantage.