The contribution of corporate social responsibility on SMEs performance in emerging country

Enterprises around the world, and particularly small and medium enterprises (SMEs) in emerging economies, are facing an increasing number of threats and challenges due to globalisation and rapid environmental changes. This research intends to frame a specific role of corporate social responsibility (CSR) on firm performance and then examine mediating effects of customer retention and business continuity. This research has employed a smart partial least square (PLS) structural equation model (SEM) over 548 responses. Samples were collected using a random selection method. Results from this study show that CSR practices towards society, environment, employees and other stakeholders are the important contributors to enhancing customer retention and business continuity leading to a better firm performance. The originality of this study is the provision of insight into how CSR enhances firm performance by examining the integrated model whereby customer retention and business continuity moderate this relationship. Furthermore, its application to the context of SMEs in the new economic and environmental settings in emerging economies reinforces the uniqueness of this research. The outcomes of this research are useful for entrepreneurs and management levels of firms in an effort to promote the performance of SMEs in emerging economies in a sustainable manner. Besides, the findings of this study are meaningful for policymakers regarding the consideration for the most practical policy to motivate and facilitate firms to practice CSR properly on a voluntary basis towards balancing the benefits to society, the environment and the economy. In accordance with that, theoretical and managerial implications were also provided.