Competitive intensity: bridging the gap between corporate social responsibility and competitive advantage

Abstract

Purpose

The concept of corporate social responsibility (CSR) is still at a growing stage in developing economies, so this research aims to examine a novel causal link between CSR (disclosure and expenditure) and competitive advantage (CA), by including competitive intensity (CI) as a moderator.

Design/methodology/approach

The panel data of non-financial firms were collected for eight years (2013–2020). This study used distinct proxies of CA, including adjusted firm return on assets and adjusted firm Tobin's q, and a third proxy used to discover the combined validity of the findings. The CSR disclosure was measured by developing an index, while the amount of CSR expenditure was collected from firms' annual reports.

Findings

The empirical results of Arellano–Bond estimator showed that CSR disclosure and expenditure have a positive and significant impact on CA. This relationship is also tested with CI as a moderator, the results of moderation showed that CI strengthens the relationship between studied variables.

Originality/value

This research tries to bridge the gap between CSR and CA through CI. It is also an addition to the existing literature by addressing the issue of CA generated from CSR activities. This study also explores the area of CA with three different types of proxies with the moderating effect of CI.

Citation

Rasheed, B. and Ahmad, M. (2022), "Competitive intensity: bridging the gap between corporate social responsibility and competitive advantage", Journal of Strategy and Management, Vol. 15 No. 4, pp. 745-765. https://doi.org/10.1108/JSMA-08-2021-0177