Effect of CSR and Ethical Practices on Sustainable Competitive Performance: A Case of Emerging Markets from Stakeholder Theory Perspective

An extensive work has been done on corporate social responsibly practices (CSRPs) that mainly emphasized the larger firms within developed nations. Nonetheless, still work is needed to observe the importance of CSRPs’ and ethical cultural practices (ECL) in terms of sustainable competitive performance (SACP) that garnered far less attention by the existing literature. This study explores the impact of CSRPs on SACP with the mediating role of ECL from SMEs of two emerging nations, i.e., China and Pakistan based on stakeholders’ theory and practices. The results using SEM affirmed the positive linkages of CSRPs—environment responsibility (EnvR), community responsibility (ComuR), customers' responsibility (CustR), suppliers responsibility (SupR), employee responsibility (EmpR), and Govt. rules & regulations’ responsibility (GRulR)—on SACP. It found that CSRPs have positive relationships with ECL whereas ECL further positively correlated with SACP in the context of both countries. The findings revealed the positive mediating influence of ECL between CSRPs and SACP, respectively. This study furnishes insightful information for management on how firms may achieve sustainable performance by incorporating ethical cultural practices and corporate social responsibility practices as the strategic tools. The study reports numerous implications for management together with lines for future directions.