Does market competition motivate corporate social responsibility? insight from malaysia

Maria Kontesa, Rayenda Khresna Brahmana, Gesti Memarista

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)
59 Downloads (Pure)

Abstract

This study aims to examine the role of product market competition on Corporate Social Responsibility (CSR) by engaging altruism and utilitarianism views. Using dynamic Generalized Method of Moment panel regression for 524 Malaysian non-financial industry listed companies from 2010 to 2016, we find that firms in a more competitive environments increase their CSR activities. We interpret these results as evidence that CSR is strategically chosen by firms not for the societal benefits, but more on business as usual; a support for utilitarianism view, i.e profit maximizations. It explains the rationale that CSR activities are less employed in a more monopolistic or oligarchic industry. Practically, this study suggests that the CSR activities are forced by market competition. Firms in a more competitive market need CSR as their non-market strategies.

Original languageEnglish
Pages (from-to)167-179
Number of pages13
JournalJurnal Ekonomi Malaysia
Volume54
Issue number1
DOIs
Publication statusPublished - 2020
Externally publishedYes

Bibliographical note

This article is published under the Creative Commons Attribution 4.0 International (CC BY 4.0) license.

Keywords

  • Corporate social responsibility
  • Market concentration
  • Market size
  • Product differentiation
  • Product market competition

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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