CSR in developing countries – the importance of good governance and economic growth: evidence from Africa

• Published in: Social responsibility journal 2021-02, Vol.17 (2), p.226-242
• Main Authors: Inekwe, Murumba, Hashim, Fathyah, Yahya, Sofri B
• Format: Article
• Language: English
• Subjects: Developing countries; Economic development; Economic growth; Economics; Employees; Financial performance; Governance; Hypotheses; Industrialized nations; LDCs; Literature reviews; Research design; Robustness; Social responsibility; Society; Socioeconomic factors; Sustainable development
• ISSN: 1747-1117; 1758-857X
• DOI: 10.1108/SRJ-10-2019-0336

Purpose The purpose of this study is to examine the effect of public governance and economic growth on corporate social responsibility (CSR) performance in Egypt, Morocco, Mauritius, Nigeria and South Africa. It also assesses the trend of CSR performance in these countries over time. Design/methodology/approach The study is based on a sample of five countries in Africa for the period 2012-2017. The multivariate regression model was used in testing the research questions/hypotheses. Robustness tests were performed to provide evidence to strengthen the findings of the study. Findings Findings suggest that both good governance and economic growth are significantly positively associated with CSR performance. However, while good governance has a relatively substantial effect size, economic growth has a small effect size. Overall, both variables have a considerably low confidence interval ratio and therefore stand a good chance of holding up in future research. Research limitations/implications The analysis is limited to within-country effects, thereby forgoing the opportunity to explain between-countries effects. Second, the sample size is relatively small because of the limitation of data availability on CSR in Africa; hence, population generalization is not intended but theory generalization. Practical implications Findings have implications for studies on CSR performance in Africa that fail to consider the socio-political and socio-economic level of development as contextual variables in the research design. Originality/value Prior studies on CSR have focused majorly on CSR performance–corporate financial performance relationship. Furthermore, there are several calls in the literature for research for a new direction on CSR in the context of developing countries, especially Africa. This paper responds to these literature gaps.