The role of corporate growth and corporate culture in the relationship between corporate social responsibility and corporate sustainability among China's listed SMEs

Abstract

As an important pillar of the global economy, small and medium-sized enterprises (SMEs) play an irreplaceable role in increasing employment, technological innovation, and social stability. However, in developing countries including China, the short lifespan of SMEs greatly limited their contribution to the national economy. Thus, SMEs urgently need to find effective paths to achieve long-term corporate survival and sustainability. Corporate Social Responsibility (CSR), as a way to utilize the resources of employees, managers, investors, government and other stakeholders is appropriate for SMEs to achieve triple-bottom-line sustainability. In short, the implementation of CSR can contribute to the SME sustainability. Therefore, this study aims to provide empirical evidence for this claim. However, the transition from fulfilling CSR to achieving corporate sustainability does not happen overnight. Previous studies have shown that SMEs can grow rapidly by actively undertaking CSR, and the long-term growth experienced by a company will enable it to prosper on an economic level while driving its social and environmental success and achieve sustainability. Therefore, this study also investigates the mediating role of corporate growth in the relationship between CSR and corporate sustainability as growth is seen as a prerequisite to sustainability. Previous studies have shown that the fulfilment of CSR and the achievement of corporate growth in SMEs require them to have supportive and unified values, beliefs, and ways of doing things, which is known as corporate culture. Therefore, this study also investigates the moderating role of corporate culture in the relationship between CSR and corporate growth. In order to achieve the above research objectives, the Ordinary Least Squares (OLS) method is conducted on the 571 Chinese SMEs listed on both the SME and GEM boards of the Shenzhen Stock Exchange (SZSE) from 2015 to 2019. Based on the empirical results, the findings indicate that both CSR and corporate growth positively affect corporate sustainability, CSR also positively affects corporate growth, and corporate growth mediates the relationship between CSR and corporate sustainability. The results also show that collaborate culture can have a facilitating effect on SMEs' CSR fulfilment as well as corporate growth. This implies that SMEs can achieve sustainability by developing a positive corporate culture that promotes CSR compliance and corporate growth. This finding provides a reference for the development of SMEs in developing countries with similar institutional backgrounds. Future research could explore unlisted SMEs, SMEs in the financial industry, cross-country comparisons between China and other economies, and the roles of different corporate culture types (e.g., create and compete) to further validate and expand the findings of this study.