This study examines whether corporate social responsibility (CSR) contributes to sustainable competitive advantage in Latvian small and
medium-size enterprises (SMEs), and whether perceived implementation barriers reduce that effect. The study draws on a cross-sectional
survey sample of 729 SMEs operating in 14 industries. The analysis uses hierarchical ordinary least squares moderation models with meancentred variables and HC3 heteroskedasticity-robust standard errors, controlling for firm size, firm age, and industry. Five item-level moderation models were estimated to assess specific barriers. The results indicate a positive association between CSR engagement and sustainable competitive advantage. However, the expected weakening effect of implementation barriers is not supported. The overall interaction was not significant, and the barrier-specific effects lacked robustness. The findings suggest that perceived implementation barriers should be understood as contextual challenges and boundary conditions, rather than as fixed constraints on CSR-related competitive advantage. Future research should test these relationships with longitudinal, broader regional and multi-respondent designs.
This study assesses the role of corporate social responsibility (CSR) in small and medium-size enterprises (SMEs) by reviewing 39 recent significant studies. The theoretical foundation of the reviewed studies serves as the basis for the research instrument designed to assess CSR practices and their impact on the competitive advantage of SMEs. A pilot study involving 102 Latvian SME respondents was conducted to validate the research instrument’s reliability across four scales: competitive advantage, reputation and financial performance, CSR domains and impact, and CSR challenges. The results indicate very good or excellent internal consistency, with Cronbach’s alpha values between 0.846 and 0.923. The findings demonstrate that SMEs continue to adopt CSR practices, recognising their strategic benefits which include innovation, operational efficiency and improved reputation. However, challenges such as resource limitations and stakeholder pressures remain important. This validated instrument establishes a foundation for further large-scale studies to explore CSR’s influence on the sustainability and competitiveness of SMEs, emphasising the need for tailored strategies, government support, and effective tools for evaluating CSR impact.