Mediating Effects of Stakeholders and Supervision on Corporate Social Responsibility

The deficit of mineral resources, the aggravation of environmental problems in the world, the decrease in non-renewable resources determined the increasing role of the responsibility of enterprises for the direct and indirect impact on the economic, environmental and social systems of their functioning. The systematization of scientific work in the field of corporate social responsibility showed the lack of comprehensive studies concerning the nature and strength of the impact of direct and latent factors on enterprises' compliance with the principles of corporate social responsibility. In this research study, we hypothesized that the common contributing factors for corporate social responsibility benefits in the literature such as institutional pressures, market/societal pressures, and structural support are mediated by the factors of stakeholder influence and supervision effect. The data from an empirical survey of 334 corporate executives were collected to test our hypotheses of mediating effects. The partial least squares structural equation modelling (PLS-SEM) approach was used to test the 11 hypotheses from the research model. The research model is statistically significant with an explanatory power of R2 = 0.468 for the dependent variable CSR benefits. The statistical results show that the direct effects of the three common contributing factors to CSR are not significant. All the standardized path coefficients (β) of direct effects from institutional pressures, market/societal pressures, and structural support to corporate social responsibility benefits are less than 0.1. On the other hand, their effects are significant through the mediating factors of stakeholder influence and supervision. If we characterize stakeholder influence as words and supervision effect as deeds, then words are more significant than deeds (the path coefficient from supervision effect to corporate social responsibility benefits is 0.243, while from stakeholder influence to corporate social responsibility benefits is 0.443). Moreover, if we characterize external pressures as a stick and structural support as carrot, our research results show that stick (0.413 for market/societal pressures, 0.387 for institutional pressures) is more significant than the carrot (0.115) in effectuating corporate social responsibility benefits.