The Role of Entrepreneurial Finance in Corporate Social Responsibility and New Venture Performance in an Emerging Market

Corporate social responsibility (CSR) has over the past decades transformed from a philanthropic attribute to something compulsory. It has become the imperative duty of organisations, irrespective of their size, nature of business and age. However, because of poor financial capabilities and lack of support, newly established ventures too often fail to voluntarily participate in social and environmental activities. This is one reason why national governments have initiated various programs and policies to encourage CSR and environmental activities in new ventures. However, previous studies have yet to fully reveal the effects of entrepreneurial finance on CSR and the environmental, financial and innovative performance of newly established ventures. To fill this gap, we used a survey to gather empirical evidence from 255 newly established ventures. The results indicate that entrepreneurial finance directly contributes to financial performance, while indirectly contributing to environmental and innovative performance through CSR. Our research recommends that new ventures efficiently utilise entrepreneurial finance to configure CSR activities that achieve high profitability, and environmental and innovative performance. Moreover, our research encourages governments to make financial loans to ventures engaged in social and environmental activities to help them reach their sustainable development goals.