Do business-friendly regulations foster corporate social performance Evidence from 20 emerging market countries

Abstract

The present study sheds light on businesses' socially responsible behaviour under a growing trend of ease of doing business deregulation in emerging markets. The study performs a wide range of statistical methods (e.g., Pearson product-moment correlation coefficient, ordinary least squares regression, generalised least squares, censored regression) to empirically examine the impact of ease of doing business deregulation on emerging market firms' socially responsible behaviour using a sample of 1,465 firms from 20 emerging market countries - Brazil, Chile, China, Columbia, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Peru, the Philippines, Poland, Russia, South Africa, South Korea, Thailand, Turkey, and United Arab Emirates. The findings suggest the positive impact of ease of doing business deregulation on corporate social responsibility (CSR) performance, especially in the community dimension. More specifically, under a more business-friendly regulatory environment in emerging markets, firms are likely to demonstrate socially responsible behaviour through greater CSR efforts by making substantial positive contributions toward the communities within which their business operations are embedded. The findings further provide meaningful implications for business firms and policy makers regarding the role of community-related CSR initiatives as a strategic instrument in promoting community development and addressing socio-economic challenges in emerging markets.