The Im... Ameroon

上海大学硕士学位论文
中图分类号：
单位代号：10280
密级：学号：
硕士学位论文
SHANGHAI UNIVERSITY
MASTER’S DISSERTATION
The Impact of Corporate Social
题 Responsibility on Financial
目 Performance: Evidence from
SMEs in Cameroon
作者 ATEUFACK SANDRA
学科专业企业管理
导师 YIXI XUE
完成日期 2021.11
姓名：ATEUFACK DJOGHO RAMECESSE SANDRA 学号：18760010
论文题目: The Impact of Corporate Social Responsibility on Financial Performance: Evidence

From SMEs in Cameroon
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上海大学企业管理硕士学位论文

Responsibility on Financial
Performance: Evidence From SMEs
in Cameroon
姓名：ATEUFACK SANDRA
导师：YIXI XUE
学科专业：企业管理
上海大学管理学院
2021 年 11 月
A Dissertation Submitted to Shanghai University for the Degree

of Master in Business Administration

Responsibility on Financial
Performance: Evidence from SMEs
in Cameroon
M．D．Candidate： ATEUFACK SANDRA

Supervisor：YIXI XUE
Major: Business Administration
School of Management, Shanghai University

November, 2021
I
ABSTRACT
There is an increasing interest in and desire for corporate social responsibility

(CSR) in today's society. Multinational corporations’ impact on the global economy,
as well as controversies exposing appalling working conditions in various industries,
may be the reasons. Despite the fact that demand for CSR is increasing, critics have
always existed. The most renowned critic is Nobel Laureate Milton Friedman, who
argues that CSR is a waste of money for stockholders. Many scholars have researched
about the impact of CSR on financial performance, but no agreement has been
reached. However, most studies focused on large organizations as research objective
and small and medium enterprises has received limited attention.
This study tries to investigate the impact of the link between CSR and the
financial performance of small and medium enterprises (SMEs). The fact that scholars
have differing perspectives on the relationship between CSR and financial
performance results adds to the topic's intrigue. Since all a company does has an
impact on its results in some way, it can be assumed that CSR has an impact on SMEs
performance in some way. These claims have made the researcher curious to examine
on CSR related to company’s performance using SMEs in Cameroon.
The study focuses on SMEs in Cameroon because, SMEs contribution to
economic, social and environmental development is essential to Cameroon. SMEs in
Cameroon create value in an economy, drive industrialization, develop skills of
managers, create wealth for nations, and above all employ citizens of nations. Hence,
the research contributes to the existing knowledge of CSR and provides new insights
gained from the analysis of the concept in Cameroonian SMEs.
Nonetheless, there is no study on how CSR affects SMEs performance in the
literature using the stakeholder and RBV theories in a developing country perspective.
These theories were used as the theoretical base of this research paper to investigate
the direct relationship between CSR, corporate governance, corporate image,
competition intensity, and financial performance and the mediating roles of corporate
II
governance and corporate image, and moderating role of competition intensity in

Cameroon.
Data was collected from 220 SMEs in Cameroon, an African country, utilizing
an empirical study and a questionnaire. The structural equation model Smart-Partial
Least Squares was used. The results showed that CSR significantly influences the
financial performance of SMEs in Cameroon.
This study adds to our understanding of how CSR efforts affect SMEs' financial
success. This adds to the body of knowledge on the influence of CSR on corporate
success while also adding to the literature on the function of image in mediating the
relationship between CSR and financial performance. The study's uniqueness is
enhanced by the application of the relationship to SMEs in emerging countries. In
terms of theory, practice, and policy, it makes significant contributions to the
literature. The results had implications for policy makers regarding managers
encouraged to participate in social responsibility activities by the role of CSR
initiatives in improving firm performance.
Keywords: CSR; SMEs; Financial Performance; Corporate Governance; Corporate

Image; Competition Intensity.
III
Table of Contents
摘要.......................................................................................................................I
论文中文总结.....................................................................................................III
ABSTRACT....................................................................................................XXV
Chapter 1 Introduction............................................................................................1
1.1 Research Background.........................................................................................1
1.2 Theoretical Background......................................................................................4
1.3 Objectives of the Thesis......................................................................................5
1.4 Research Questions.............................................................................................6
1.5 Research Methods...............................................................................................6
1.6 Significance of the Thesis...................................................................................6
1.7 Contributions of the Thesis.................................................................................7
1.8 Research Structure..............................................................................................8
Chapter 2 Literature Review................................................................................10
2.1 CSR...................................................................................................................10
2.1.1 Concept of CSR......................................................................................10
2.1.2 Dimensions of CSR................................................................................12
2.2 Firm Performance.............................................................................................13
2.2.1 Concept of firm performance.................................................................13
2.2.2 Measurement methods of financial performance....................................13
2. 3 Relationship between CSR and Financial Performance...................................15
2.3.1 Positive relationship...............................................................................16
2.3.2 Negative relationship..............................................................................17
2.3.3 Neutral relationship................................................................................17
IV
2.3.4 Relationship for SMEs...........................................................................17
2.4 Corporate Governance......................................................................................18
2.5 Corporate Image................................................................................................18
2.6 Competition Intensity........................................................................................19
2.7 Background of SMEs in Cameroon...................................................................19
Chapter 3 Conceptual Framework and Hypothesis..............................................22
3.1 Stakeholders Theory.........................................................................................22
3.2 Resource Based View Theory...........................................................................24
3.3 Theoretical Hypothesis.....................................................................................24
3.4 Hypothesis Development..................................................................................25
3.4.1 Relationship between CSR and financial performance...........................25
3.4.2 Mediating role of corporate governance.................................................26
3.4.3 Mediating role of corporate image.........................................................27
3.4.4 Moderating role of competition intensity...............................................28
Chapter 4 Research Design..................................................................................30
4.1 Methodology.....................................................................................................30
4.2 Questionnaire Design........................................................................................30
4.3 Research Sample and Design............................................................................31
4.4 Data Collection.................................................................................................31
4.5 Variable Measurements.....................................................................................32
4.5.1 Dependent variable.................................................................................32
4.5.2 Independent variable..............................................................................32
4.5.3 Mediating variables................................................................................32
4.5.4 Moderating variable...............................................................................33
4.5.5 Control Variables...................................................................................33
4.6 Sample Descriptive Statistics............................................................................33
4.6.1 Descriptive statistic of SMEs.................................................................33
V
4.6.2 Descriptive statistic of employees..........................................................34
4.7 Data Analysis....................................................................................................35
Chapter 5 Data Analysis and Hypothesis Testing................................................36
5.1 Reliability and Validity Analysis......................................................................36
5.2 Descriptive Statistics.........................................................................................38
5.3 Correlation Analysis.........................................................................................38
5.4 Structural Equation Model................................................................................39
5.5 Hypothesis Testing............................................................................................40
5.5.1 Effects of CSR on financial performance...............................................40
5.5.2 Mediation analysis (corporate governance and image)...........................41
5.5.3 Moderation effects of competition intensity...........................................41
5.6 Effect of Control Variables...............................................................................42
Chapter 6 Conclusion...........................................................................................44
6.1 Discussions.......................................................................................................44
6.2 Theoretical Implications....................................................................................44
6.3. Managerial Implications...................................................................................45
6.4. Limitations.......................................................................................................46
6.5 Recommendations for Further Studies..............................................................46
References............................................................................................................47
Appendix..............................................................................................................66
Acknowledgement................................................................................................69
VI
Chapter 1 Introduction
This chapter will introduce the background of the research topic, theoretical
background of the thesis, and the development of CSR of SMEs in Cameroon. After
the introduction, this chapter will also state the objectives of this research, detailed
research questions, research methods, significance of the thesis, contributions and
lastly the structure of this thesis.
1.1 Research Background
CSR has grown in the past decade both as a pivotal field in academia and as an
important occurrence in practice. (Wang et al., 2015). Civil societies, including
governmental agencies and environmental groups, have established standards and
expectations for firms that impact the world’s shared components. The obligations a
company assumes in attempting to meet those societal expectations can be
characterized as CSR (Cholette et al., 2014). CSR is grounded in the moral and ethical
philosophies of the individual corporation, and a significant number of global
corporations have embraced the challenge of impactful CSR by accepting that social
concerns are legitimate and realizing that their organization’s continuing operations is
connected to social engagement.
Aside from these noble intentions and motives, contemporary business leaders are
challenged to remain competitive and profitable while engaging in CSR. Prevailing
CSR investment strategies focus on economic return and branding despite the
philanthropic origins of CSR (Menichini, & Rosati, 2013; Doane, 2005; Inoue & Lee,
2011). However, businesses demonstrate their ethical orientation and moral principles
to all stakeholders, including the anticipated social and environmental effect, in order
to create a positive brand connection (Ansari & Qureshi, 2015). While many business
leaders now see social involvement with stockholders, local communities, and other
stakeholders as a function of doing business in a competitive environment and have
dedicated resources that surpass regulatory requirements, many others feel that going
above and beyond will have a direct effect on their financial bottom line (Schwab,
2008,McWilliams & Siegel, 2000)
1
CSR is an important tool in the world’s business society and has already moved
into the mainstream activity. The growing emphasis on CSR is affecting the
relationships between companies and their various stakeholders including customers,
employees, civil society and governments. A good number of giant companies’ have
considered using CSR in their strategic plans as an outstanding component for long-
term sustainability. Rhou et al., (2016) , CSR is becoming one of the growing concern
for leaders as companies are being tested not only based on their financial
performance but also on community performance. Corporations have long made
profits their predominant motivation for operating, which has led to greater risk for
human societies and the ecological health of Earth (Lovins et al., 2007). Therefore,
corporations are faced with increasing pressure to change their operational strategies
to incorporate environmentally and socially responsible approaches in conducting
business.
A handful of theoretical had focused solely on the quest of economic and
financial performance. Several studies looked at how recent quantitative studies have
influenced the evolution of the CSR- financial performance concept (Boaventura et
al., 2012). A substantial number of researchers reported a positive relationship
between CSR and financial performance, justifying a corporate CSR investment
profit-minded rationale (Boaventura et al., 2012; Tsoutsoura, 2004). Researchers have
also reported an empirically significant link between an organization’s CSR
investment and their previous financial performance. Rusinova & Wernicke (2016)
proposed that changes in a firm’s financial costs affect future CSR investments. Given
these specific constructs, businesses view CSR as an integral part of their operational
strategy (Rowe et al., 2014).
In pursuit of perceived potential financial advantages of CSR investments,
business leaders have made and continue to make substantial expenditures. In 2010,
184 of America’s leading companies invested approximately $15.5 billion dollars’
worth of cash and products, amounting to just above 9% of profits before taxes (Rowe
et al., 2014). In Australia, 10 of the largest corporations invested over AU$500
million in the community in 2010. However, although these investments may well
yield performance advantages, the internal capabilities of firms (i.e., product
differentiation and outside investments) have a profound impact on the degree of
2
positive relationship between financial performance and CSR involvement (Lee &
Jung, 2016). These complicating factors represent additional challenges in decision
making for business leaders involved in considerable CSR investments.
Acknowledging these significant outlays and the current availability of CSR
reporting systems, researchers have heightened their efforts in the development of
viable approaches for assessing corporate community investment effectiveness. There
are several independent third-party companies that rate the CSR activities of
individual companies, allowing stakeholders to assess the relative environmental and
social involvement of these companies. But within the SMEs sector, which comprises
over 90% of the world’s firms Singer, (2018) and over 97% of U.S. businesses in
2014, CSR assessment has less representation in the literature. Whilst it was initially
considered as the domain of larger organizations with bigger impacts on the society,
SMEs’ social behavior is no longer overlooked. People have started recognizing the
importance of SMEs as a predominant form of business in all economies and the net
influence they can potentially have within society. Especially in Cameroon and in the
world as a whole SMEs constitute the largest business sector. They are dominant in
terms of absolute numbers, and are also the key drivers of employment and economic
growth Jones, (2005).
SMEs assist in boosting economic growth, create jobs, and wealth distribution
(Gjini, 2014; Manyani, Hove et al., 2014; Moorthy et al. 2012). In Cameroon, it has
been recognized that SMEs contribute significantly to job creation and poverty
alleviation. This is the reason why many economies all over the globe heavily
depends on SMEs (Charles, 2014)
However, SMEs contribution with regards to economic, social and
environmental development has turned attention towards discussion and analysis of
the importance of CSR in SMEs’ financial performance. SMEs in Cameroon make up
the bulk of the country’s enterprises. In fact, Law N° 2010/010 of 13 April 2010 on
the promotion of SMEs in Cameroon and other legal and institutional instruments
paved the way for the sector with the creation of many of such enterprises. This
existing knowledge gap, combined with the differences between the fundamental
characteristics of SMEs and large organizations, delimits the applicability of
3
traditional models and theories in evaluating SMEs participation in CSR (Moore &
Spence 2006; Perrini, 2006).
In recent years, the concept of CSR has progressively focused on corporate
strategy (Blowfield & Murray, 2011), which is associated with financial and
competitive performance. For several years, many studies have stated the importance
of SMEs in the economies of both developing and developed countries but SMEs
have received less attention in the CSR area. Most SMEs worldwide, including
Cameroonian SMEs, do not routinely and formally report on CSR, making the
application of traditional CSR assessment techniques difficult (Baumann-Pauly et al.,
2008).
There is considerable body of research that explores the relationship between
CSR and financial performance, nonetheless, the results are inconclusive,(Chen &
Wang 2011;Mahoney & Roberts 2007) with some studies showing positive link
between CSR-financial performance and others delineating negative links (Goyal et
al. 2013; Lu et al. 2014) while others show no relationship (McWilliams & Siegel
2000; Cowen et al. 1987). To date, limited number of studies have examined the
relationship between CSR and financial performance in a more elaborate way to
understand the effects of mediating variables. This is also corroborated by the survey
of Galbreath & Shum (2012) as they assert that several intervening variables have not
been fully explored to see the effects of mediating variables on the relationship
between CSR and financial performance. Therefore, the research intends to
investigate the impact of CSR on financial performance using SMEs in Cameroon.
1.2 Theoretical Background
Researchers have indicated that SMEs have different motives and considerations
when engaging in CSR than larger enterprises (Hou et al., 2016). A common
impression is that although large corporations are primarily inspired to conduct CSR
programs for reasons related to image and reputation, SMEs are encouraged hence
making an impact in the community which leads to increased sales and profits (Popa
&Salanta, 2014). CSR has a significant effect on a company’s governance activities
(Jamali et al. 2008), which ultimately improves the organization’s financial
performance. CSR and corporate image have been extensively studied by scholars and
4
positive links have been found between them (Hammond & Slocum 1996; Bebbington
et al., 2008). CSR, corporate governance, and corporate image, competition intensity,
have gained a lot of attention in various research areas, however typically in isolation.
This research has as aim to fill this gap and desire to further distil the CSR- financial
performance relationship through examining the mediating effects of corporate
governance and corporate image and moderating effect of competition intensity on
that relationship.
The current research intends to investigate the mediating role of corporate
governance and corporate image and moderating role of competition intensity on the
relationship between CSR and financial performance. Prior investigation shows that
CSR practices are thriving in developing countries by reason of pressures from some
stakeholders. (Belal 2001; Kamal & Deegan 2013). Most research disregarded the
possibility that some other major intervening variables, such as corporate governance
and corporate image may mediate the relationship between CSR and financial
performance. This research has as objective to fill this gap by integrating a number of
mediating and mediating variables to examine the fundamental link between CSR and
financial performance.
1.3 Objectives of the Thesis
The aim of this research is to investigate the impact of CSR practices on financial
performance on SMEs in Cameroon. However, the specific objectives are the
following:
(1) To investigate the role of CSR practices on SMEs financial performance in
Cameroon.
(2) To investigate the mediating roles of corporate governance and image on CSR
on SMEs performance in Cameroon.
(3) To investigate the moderating role of competition Intensity on the relationship
between corporate governance and financial performance on SMEs in Cameroon.
(4) To suggest managerial recommendations of CSR on SMEs financial
performance.
5
1.4 Research Questions
The research is supported with the following research questions

What are the impact of CSR practices on financial performance of SMEs in
Cameroon?
What are the mediating effects of corporate image and governance on CSR and
performance relationship?
How does competition intensity influence the relationship between corporate
governance and financial performance in SMEs?
1.5 Research Methods
A detailed examination of the literature was conducted in order to meet the

above-mentioned aims, and quantitative research was conducted based on the
findings. The general concept of SMEs was researched and reassembled using a
literature review. The literature on SMEs, CSR, and financial performance has not
been properly investigated in developing countries. For quantitative research,
questionnaire has been designed and distributed in Cameroon online via online
Google. The questionnaire focused on SMEs in Cameroon, and collected in Google
online survey, which is the largest service provider of online questionnaire in the
world. The factors for measurement were CSR, corporate governance, corporate
image, competition intensity, and financial performance.
1.6 Significance of the Thesis
Given the lack of research on CSR application among SME in Cameroon, this
thesis is expected to provide a preliminary look at how these enterprises perceive CSR
implications and practices. As understanding and practices of CSR are different in
social economic and political context, the findings from this research will offer other
researchers, law makers with knowledge of factors that influence these perceptions
and practices. Through the in-depth investigation and interaction with the owners and
managers of SMEs, the applicability of the frequently applied theoretical frameworks
– stakeholder theory and resource-based view theory would be examined. The
6
emerging results would be of particular significance to researchers for the application

of an appropriate theory that can explain not only the SMEs, CSR and financial
performance relationship in Cameroon, but also other SME business-related issues in
future.
This research would be used as a baseline study for further researches that would
provide sufficient assistances to address the issues of what could be done beyond the
existing prevailing perceptions of CSR in developing countries. Notwithstanding the
in-depth research on CSR and financial performance, little is known about the
correlation between CSR and financial performance in SMEs in Cameroon. This
study will also provide new perspectives for SME managers in maximizing financial
performance through CSR research, and the results from this research would provide
significant and practical implications for SMEs managers.
1.7 Contributions of the Thesis
This research has contributed a lot in various ways to the current work. Firstly,
the research contributes to the existing knowledge of CSR and provides new
knowledge gained from the analysis of the concept of SMEs in Cameroonian.
Moreover, the research highlights on the relevance of two theories stakeholder and
RBV theories, which are mostly applied for the analysis of social responsibility in
business. Many studies have revived that by taking in to cognizance the CSR-
financial performance relationship and the part of mediating variables from an
advanced country outlook. A less advanced country such as Cameroon offers a useful
opening to examine this relationship with those from a less developed country’s
milieu. Finally, the research studies CSR- financial performance relationship by
examining both the mediating roles of corporate governance and corporate image and
further explores the moderating roles of competition Intensity. Finally, the findings
are essential for policymakers and managers in developing countries who envisage the
adoption of CSR do so in their organizations to enhance the efficiency of their
7
1.8 Research Structure
This thesis consists of 6 chapters, the diagram below depicts the structure of the
research, each chapter relates to an individual research phase.
In Chapter 1, the research background, objectives of the thesi and research
questions, research method, and significance of the study and research structure are
discussed.
In Chapter 2, in-depth knowledge is given on existing literature on CSR and
financial performance, corporate governance, image and competition intensity. Lastly,
we discussed SMEs in Cameroon.
In Chapter 3, the conceptual framework and hypotheses were displayed. In the
final part of this chapter, we propose hypotheses for our research.
In Chapter 4, methodology, research design, measurement of the variables, and
empirical results are discussed.
In Chapter 5, the data analysis, Structural Equation Model for the hypotheses
formulated were presented, descriptive statistic.
In Chapter 6, involves conclusion, discussion, theoretical and managerial
implications. In addition, limitations and recommendations for future research
directions were presented.
8
Figure 1 Structure of the Research
Source: Author's own work
9
Chapter 2 Literature Review
This chapter will specify the concept of CSR, financial performance and the
various measurements, a brief definition of corporate image, corporate governance
and competition intensity. It also states the various relationships between CSR and
financial management backed by previous research. Furthermore, it will introduce
SMEs in Cameroon.
2.1 CSR
2.1.1 Concept of CSR
During the past few decades, more studies have increasingly stressed CSR as a
valuable research field for academicians, practitioners, and administrators, due to the
concern about environment and social equity, which portrays CSR as an important
concept in management literature (Nejati & Sasan, 2012). Inspite of the importance of
CSR and the large number of relevant studies, no universal agreement has been
reached on the definition of CSR (Luo et al., 2010; Servaes & Tamayo, 2013; Bello et
al., 2016; Samarakoon & Arachchige, 2016; Samuel & Mqomboti, 2017). Various
theoretical perspectives and different opinions about the definition of CSR are
presented and proposed in the previous literature (Jing & Jun 2020; Mohr et al.,
2001).
One of the earliest theoretical arguments in favor of CSR was proposed by
Donham (1927), which stated that CSR was becoming a necessary component of
responsible business practices. Large organizations are becoming more concerned
with long-term stability and performance over immediate profits. Following
Donham’s inaugural work on businesses responsibility, Berle (1931), Dodd (1932)
further proposed their views about CSR, respectively. Berle (1931) argued that a
business has a compliance and fiduciary duty as a trustee of the shareholder’s
property. Shareholders have an expectancy of management’s financial responsibility
with their property. Thus, the foremost duty of an organization should be a curator to
its shareholders. Any attempt outside the shareholder interest is a breach of the trustee
duties held by management. Berle (1931) did not oppose the reality of social problems
10
created by corporations, or the need to address them. But he argued that a business
should not be responsible for its effect on society because it was the duty of the
government. Dodd (1932), conversely, argued that an organization was not merely a
profit generating instrument of the owners (shareholders), intrinsically, the
organization had responsibilities to all who are associated with it: shareholders,
employees, customers, and the society. Instead, an organization should be viewed as
an institution with multiple obligations.
Based on prior research, Carroll (1991) proposed the primary definition of CSR
as a term that combines ethical, economic, discretionary, market, and legal
expectation of human societies for organizations by viewing CSR perspectives as not
only adding contributions for some organizations motives but also for the social
welfare perspective at large. Wood (1991) described CSR as a company’s
commitment to specific merits, procedures, and policies that usually characterized the
company’s social responsibility. CSR is a dedication of organizations and businesses
to weaken or eradicate completely any risky business ventures while increasing their
beneficial contributions. (Belen & Juan 2021; Mohr et al., 2001). The motivation to
engage in CSR behavior is sometimes unclear. Inyang et al, (2011) defined CSR as
obligation of entrepreneurs to follow those course of actions, to make those decisions,
which are favorable in terms of objectives and values to the society.
Although there is not an agreed clear definition, all the studies or statements agree
that CSR is based on an organization’s obligation to recognize the welfare and
beneficial contribution of society by legal, economic, and supportive business
application practices that can aid stakeholders, including business practitioners,
customers, staff, suppliers, shareholders, and the society, as well as other
stakeholders. In this sense, CSR can be described as an organization’s commitment to
consider a positive contribution to society or any other individual who may be
influenced by their social implements and activities (Matten & Moon, 2004). As a
result, it is important to recognize being socially responsible for contributing to the
society rather than simply being profit-oriented, such as environmental protection and
attempts to address social issues, as these are critical markers for socially responsible
organizations.
11
2.1.2 Dimensions of CSR
Carroll (1979) work illustrated the first real conceptual model of CSR. Just as
Carroll (1991) stated that CSR includes various dimensions, that is economic
responsibility, legal responsibility, ethical responsibility, and philanthropic
responsibility and the author put forward a classification of the four responsibilities in
the form of a pyramid in with economic obligations being at the basis of
responsibility, as shown in Fig.2.
Bello et al., (2016) explained each of the four responsibilities. Economic duty is
described as the firm’s responsibility to make decisions that exploit earnings and
positively impact the society. Lawful obligation shows an organization’s
responsibility to obey the laws, rules and regulations within the society in which they
operate. Ethical accountability is concerned with ensuring an institute is operating in a
fair and ethical manner. Philanthropic obligation refers to the responsibility of the
firm to willingly use part of its earnings to improve the well-being of the culture.
Bestowing to (Carroll, 1979) and (Carrol & Shabina, 2010), these four sorts of CSR
state the most lasting portrayal of CSR that has been successful in the past few eras
Philant
ropic
respons
ibilty.
Be a
corporat
e citizen
Ethical Responsibility
Obligation to do what is right, just and
fair.
Legal Responsibilty.
Obey the laws
Economic Responsibilty.
Be profitable
Figure 2: Depicts a representation of Carroll’s CSR Pyramid of CSR (Carrol, 1991).
12
2.2 Firm Performance
2.2.1 Concept of firm performance
Firm performance is the total value created by the firm through its pursuits, which
the sum overall utility created is generated for every one of an organization’s
stakeholders (Muzhar et al., 2020; Harrison & Wicks, 2013). Firm performance can
be measured using pecuniary and non-financial measures either individually or in
conjunction (Charles, 2014). Financial performance, includes profit, return on assets
(ROA), return on investment (ROI) and share performance while non-financial
concert measures include market share, growth and firm’s performance relative to its
competitors. (Stefano et al., 2020 ;Charles, 2014; Dadzie, Winston, 2012; Mackey et
al., 2007; Charles 2014; Sarkar, Echambadi, & Harrison, 2001).Traditionally,
company success has been measured by outcome-based financial processes
(Gunawan, 2007; Stefano et al., 2020). Most studies in the CSR related literature,
adopt financial enactment as reliant variable.
2.2.2 Measurement methods of financial performance
The literature shows financial performance from two viewpoints: accounting and
market. Both accounting and market approaches are well accepted economic
measurement perspectives of business performance. Researchers have figured that
these measures are not statistically related and reflect two distinct aspects of a firm’s
financial performance (Gentry & Shen, 2010). Market-based measures do not
constitute a firm’s fundamental value but rather the perceptions of stockholders,
whereas accounting returns constitute short-term, firm-specific profitability (Inoue &
Lee, 2011; Richard et al., 2009).
Accounting measures. Accounting and business methods, as previously stated,
dominate the literature on financial results. Accounting measurement methods receive
the majority of research coverage. The literature revealed that researchers, employing
accounting indicators to measure financial performance, utilize various financial
evaluation ratios. A prominent accounting ratio is return-on-investment (ROI), widely
considered the true measure of a business’s bottom line (Gentry & Shen, 2010;
13
Gunawan, 2007). More commonly referenced accounting ratios for evaluating

financial performance are ROA, ROE, and ROS given that regulators frequently
employ them Brooks, (2014).
Market measures. Financial market measurement methods are less common
adopted in the literature, compared to financial accounting measurement methods
Gbadamosi, (2016). Financial market-based measures such as stock prices and
market-to-book ratios are widely employed reflectors of a firm’s stock market
strength (Galant & Cadez, 2017; Gentry & Shen, 2010; Richard et al., 2009). Market-
to-book is described as the ratio of a business’s total market value over its total asset
value. Researchers debated the merits of the approach, some arguing that financial
market-based performance measures represent a firm’s fundamental value that
integrates all relevant data and thus is not restricted to a lone aspect of a firm’s
performance as is the case with accounting measures (Gentry & Shen, 2010; Richard
et al., 2009). Other researchers remarked that market-based measures are more
sensitive to system-wide perceptions and are representative of future and long-term
performance than accounting approaches (Galant & Cadez, 2017; Gentry & Shen,
2010; Inoue & Lee, 2011; Richard et al., 2009; Tsoutsoura, 2004).
Perceptual measures. For several years, researchers have also enlisted
perceptual measurement methods as performance research tools to estimate a firm’s
financial goal attainment, corporate assets optimization, and stability of financial
position (Galant & Cadez, 2017; Boaventura et al., 2012; Orlitzky et al., 2003). To
evaluate managerial perceptions on organizational practices, (Ellinger et al. 2002)
utilized the Watkins & Marsick Dimensions of the Learning Organization
Questionnaire, which was created in 1997 and included financial features. More
recent examples of perceptual measures of financial performance include the works of
(Fonseca & Ferro 2016; Herrera et al. 2016; Srichatsuwan 2014, Sweeney 2009; &
Choongo 2017), where the researchers used Likert scale questionnaire surveys in their
investigations of CSR and financial performance relationships. Perceptual measures
offer the advantage of a convenient means of assessing financial performance when
indicators in company communiques are inconsistent (Galant & Cadez, 2017).
Mixed measures. Some researchers have employed a combination of accounting
and financial market measures attempting to balance the potential risks with
14
operational performance topics. Mixed measures like balanced scorecards (BSC), cash
flow per share, and Tobin’s Q offer an account of intangible assets such as intellectual
capital and human capital (Galant & Cadez, 2017; Gunawan, 2007; Richard et al.,
2009). BSC is the most popular multidimensional indicator of financial and
operational performance that translates strategy into measures (Galant & Cadez, 2017;
Gunawan, 2007; Richard et al., 2009). Both lagging and leading measures of past and
future results are included in the systematic measure. Garcia-Castro et al., (2010)
selected four measures to define financial performance, ROA, ROE, Tobin’s Q ratio,
and MVA. (Ellinger al. 2002), in their examination of organizational learning and
financial performance, elected the same four indicators in conjunction with a
questionnaire to assess financial performance. (Rodgers et al., 2013) chose a
combination indicator, Zmijewski score, to serve as a proxy for a company’s financial
health. The Zmijewski score consist of profitability, liquidity, and leverage ratios,
including ROA and Tobin’s Q ratio. Researchers investigating the relationship
between CSR and financial performance have used both or a combination of these
forms of financial measures, which partially explains the unpredictability of outcomes
(Galant & Cadez, 2017; Gunawan, 2007; Richard et al., 2009).
This research used mixed measure (combination of accounting and financial
market) for the measurement of SMEs financial performance in Cameroon. As the
respondents were asked about their SMEs average return on investment, average
profit, profit growth and average return on sales. The researcher used this
measurement method because it provides better information for evaluating the impact
of CSR on financial performance of SMEs in Cameroon. Moreover, methodology
selection should be based on the nature and the context of the study questions or
problem (Benjamin 2021; Sekaran & Bougie, 2010).
2. 3 Relationship between CSR and Financial Performance
Although many authors have explored the relationship between CSR and
financial performance, no agreed relationship has been reached. Nevertheless, studies
on the link between CSR and financial performance show significant, negative,
mixed, or non-significant results.
15
Table 1 Relationship between CSR and financial Performance
Authors CSR- financial performance

Relationship
1 (Alafi & Hasoneh, 2012; Galbreath & Shum, 2012; Luo & Positive Relationship
Bhattacharya, 2006; Margolis et al., 2008; Shen & Chang,
2008; Saaeidi, S.A 2015; Torugsa et al., 2012; Aguinis &
Glavas 2012; Peloza, 2009; Erhemjamts &
Venkateswaran 2013).
2 (Manchirahu & Rajgopal, 2017; Crisóstomo, De Souza Negative Relationship
Freire, & De Vasconcellos, 2011; Sarkis & Cordeiro ,
2001; Vance, 1975; Wright & Ferris, 1997).
3 Dobbs, & Van Staden, 2016; McWilliams & Siegel, 2000; Neutral Relationship
Nollet, Filis, & Mitrokostas, 2016).
2.3.1 Positive relationship
CSR has been evaluated as an overbearing factor in the realization of economic

objectives and wealth creation (Garriga & Mele, 2004). A number of studies have
tried to find a link between CSR and financial performance (Alafi & Hasoneh, 2012;
Galbreath & Shum, 2012; Lin, Yang, & Liou, 2009). For instance, empirical
conclusions by researchers (Alafi & Hasoneh, 2012; Galbreath & Shum, 2012; Luo &
Bhattacharya, 2006; Margolis et al., 2008; Shen & Chang, 2008) showed a positive
link between CSR and firm routine.
In the United States, (Erhemjamts & Venkateswaran 2013) conducted research to
determine the relationship between C.S.R, firm investment policies, and results. They
found a positive link between C.S.R and firm’s outlay policies, administrative
strategy, and performance.
Moreover, a number of writers also established a positive affiliation between CSR
and firm’s enactment (Saaeidi, S.A 2015, Torugsa et al., 2012). Margolis et al., (2009)
conducted a meta-analysis on the link between CSR and corporate financial enactment
and found the overall effect as being positive. Peloza, (2009) carried out 128 studies
on CSR and commercial results and found that 75 of them (58.6%) found a
connection between the two.
16
2.3.2 Negative relationship
(Manchiraju & Rajgopal, 2017; Crisóstomo, De Souza Freire, & De

Vasconcellos, 2011; Sarkis & Cordeiro, 2001; Vance, 1975; Wright & Ferris, 1997)
showed a negative link between corporate social responsibility and financial
performance). Babola, (2012) research on the effect of CSR on a firm’s profitability in
Nigeria and the results found a negative link between firms CSR performance
measure with profit after tax and investment in CSR. Researchers and academics who
found a negative relationship between CSR and business performance, have argued
that implementation costs of CSR are too high compared with the results obtained (Oh
& Park, 2015).
2.3.3 Neutral relationship
Studies carried out by (Dobbs; & Van Staden, 2016; McWilliams & Siegel, 2000;
Nollet, Filis, & Mitrokostas, 2016) gave neutral results.
2.3.4 Relationship for SMEs
The relationship between CSR and financial performance has been studied a lot,
the focus on SMEs is still limited. The contemporary global business atmosphere is
impacted by social and environmental issues. As with large firms, SMEs are forced to
address these struggles to remain feasible and competitive (Korra et al., 2018; Arend,
2014). Both SMEs and large corporations share similar concerns when strategizing
about CSR initiatives, namely regulation, litigation, and cost avoidance (Maciej &
Szymon 2021; Sarbutts, 2003). The management of the threat immediacy of these
three issues is a problem for SME firms, which is less of an issue for larger firms.
Unlike smaller businesses with limited capital, large enterprises have the resources to
maximize the expense versus profit of CSR activities (Sarbutts, 2003).
As stated earlier, most of the research on the CSR-financial performance
relationships comes from more advanced countries. There is finite number of studies
on CSR-financial performance relationship in less developed countries, specifically in
Cameroon. The main research question is whether or not the involvement in CSR
activities leads to financial performance in SMEs in less developed countries, using
17
Cameroon as a case study. (Jamali, D.; Lund-Thomsen, P.; Jeppesen 2017), As a

result, it was difficult to conclude the findings from advanced nations to less advanced
ones, especially Cameroon without further research. This is due to the fact that SMEs
business design in developed countries generally differ from those of developing
countries.
2.4 Corporate Governance
Corporate governance is a constituent of implementing accountability (Demb &

Neubauer, 1992). Corporate governance has gained considerable recognition over the
past years, leading to approved codes of conduct (Ho, 2005).
Corporate governance therefore covers a set of comprehensive appearances,
including ensuring accountability to shareholders and other stakeholders (Thi Hong et
al., 2021; Keasy & Wright, 1997), building measures to control managerial behavior
making sure organizations are managed in accordance with the rules and regulations
and liable to all stakeholders (Dunlop, 1998; Waleed et al., 2020),also making sure
that reporting systems are organized in such a way that primes to good governance
(Kendall, 1999; Waleed et al., 2020), emplacing an efficacious leadership
management policy that embodies stakeholder value as well as shareholder value
(Tricker, 1994; Kendall, 1999), and increase corporate enactment.
Therefore, the components of leadership, direction, transparency, and
accountability form a vital part of effective and successful corporate governance
practices (Mercedes 2016; Huse, 2005; Van den Berghe & Louche, 2005).
2.5 Corporate Image
Corporate image is considered an important component in the comprehensive

assessment of an organization (Bitner, 1990; John & Klement 2021). Corporate image
is a shared perception of an organization among its stakeholders, and it is seen as a
critical feature in figuring the legitimacy of an organization (Dowling 1986). Firms
can improve their image in a variety of ways, with CSR participation being one of the
most important (Galbreath 2010; Vilanova et al., 2009; Kuldewep & Madhvendra
2021). Boulding (1956) an expert who proclaimed the meaning of corporate image
18
identified corporate image into two views, namely functional and psychological
opinions. (Kandampully, 2007) stated that the functional part is associated to
something tangible that can be measured effortlessly, while the psychological part as
stated by Kennedy (1977) is associated with psychological exhibit through feelings
and behavior.
Wallin & Lindestad (1998), defined corporate image as a comprehensive
evaluation of the company and they measured corporate image in their study using
three indicators; overall judgement of the organization, judgements of the
organization’s contribution to the community, and fondness of the organization.
2.6 Competition Intensity
The competitive force of potential competitors is decided by their cost advantage,

product diversity, capital requirement, switching cost, distribution access, channel,
and governmental plan. (Porter 1980; Zurina et al., 2016)
Handwalla, (1972) trusts that a well-understanding of competition nature in
specified industries requires some rigorous analysis of various elements. Porter’s FFM
builds up a suitable basis for this thoughtful action (Kunhui Ye, 2010).
Competition intensity is defined as the intensity which governs the level of
rivalry existing in a specific manufacturing. This competition can be prejudiced by
several factors, including the concentration of the industry, cost of switching and the
rate of industrial development.
2.7 Background of SMEs in Cameroon
By definition SMEs differs in framework across nations, industries, organizations

and academic institutions Sotamenou (2016). Institutional definitions of SMEs are
based on two characteristics: the size of the enterprise and the turnover rate. The
European Union Commission defined SMEs as those enterprises having 250
employees and a turnover or balance sheet that does not surpass 43 million euros
(Eurostat, 2018; Eustat, 2018). This definition may not be appropriate in all countries.
Cameroonian law (law n° 2010/001 of April 13, 2010) defines SMEs as an enterprise
with 21 (twenty-one) to 100 (one hundred) employees with an annual pre-tax turnover
19
of more than 100 (one hundred) million CFA francs (1,182,513CNY) and less than 1
billion CFA francs (11,825,131CNY). In Cameroon, close to 95% of enterprises are
SMEs and the practice of CSR in SMEs is crucial as environmental aspects are often
overlooked by SMEs (Sotamenou, 2016). The main difference between large
organizations and SMEs is that, small enterprises management lies with the owners’
contradictory to large organizations (Linh chi Vo, 2011). Some researchers state that
SMEs are more socially responsible than bigger companies due to aspects, such as
close relationship with communities and less pressure to add shareholder value
(Blowfield & murray, 2011). (Russo & Tencati, 2011) characterized CSR in SMES as
“unstructured, non-formalized and non-systematic”, whereas bigger organizations
CSR activities are often planned and measurable (Jamali & al., 2009). Most of the
studies in this field fail to cover all the relevant areas that could aid in the
development of a coherent theory. Additionally, such studies were difficult to collect
since they were published in a wide range of topics like business ethics, CSR, SMEs,
entrepreneurship, regional development and management problems as was earlier
mentioned by Moore & Spence, (2006).
Murillo & Lozano, (2006) found a lack of consensus on the familiarity and
awareness of CSR by SMEs’. According to (Garriga & Mele, 2004), society
interrelates with business, adding its legitimacy and prestige and thus enterprises
become responsible for its pursuits within the society in its long-term economic
functioning and its creation of value. Thus, CSR is a commitment of the business
towards its society. On the other hand, some authors (Hitchens et al. 2005; Petts et al.,
2008) stated that SMEs have never had the thought about CSR as they do not
recognize their social and environmental impacts. Nevertheless, the literature
concedes that many SMEs are already socially aware and active, though not at the
CSR level (Rhou et al., 2016; Jenkins 2004). In 2006, Murillo and Lozano used a
grounded theory approach to investigate the understanding of CSR in Catalan medium
sized enterprises. They found that the businesses were not comfortable with the
concept and considered this precise term as a ‘metalanguage’ which was hard to
internalize from a management outlook. Similar issues related to the terminology
were noted by (Lahdesmaki 2005, Spence 2007, Southwell 2004 and Zadek et al.,
2005). (Castka et al., 2004; Solon et al., 2020) considered the term CSR to be
20
deluding because the concept is generic and is applicable to organizations of all types
and sizes but the term fails to reflect this. Spence (2007) is cynical of using the words
‘corporate’ and ‘social’ to refer to unincorporated businesses like SMEs. Many
researchers are convinced that this ambiguity limits SMEs from familiarizing
themselves with the construct. In response to this issue, terms like ‘small-firm social
responsibility’ (Spence 2007), ‘responsible business behavior’ (Ortiz A., & Kuhne,
2008), ‘responsible competitiveness’ (Zadek et al., 2005) and ‘responsible business
practice’ (Southwell, 2004) have emerged in the literature to make this concept more
relevant for such organizations. Whilst some authors note that CSR is seen as
providing an opportunity for strategic advantage for SMEs, others view it to be a cost
disadvantage due to the lower resource slacks of smaller businesses. (Nooteboom,
1994).
According to some researchers, some SME owners/managers, view socially
responsible activities as costs that leads to competitive disadvantage (Gerstenfeld &
Roberts 2000; Tilley, 1998 Grewatsch & Kleindienst, 2017). At the same time,
Spence 2007; Wang & Sarkis, 2017) argued that the SMEs provides confined space to
hide errors and therefore the moral closeness with the community and customers is
more valued and this shape the CSR behavior of SMEs. (Bocquet et al.,2017; Porter &
Kramer, 2006, 2011) deduce that many organizations carry out CSR practices in a
formal way instead of associating CSR with their strategic objectives, but such a
proposition has not been examined in SMEs, particularly in Cameroon. Contrary to
large organizations, SMEs are considered to perform insufficiently in terms of social
responsibility and business ethics (Jenkins, 2006).
A small enterprise study in the US (Thomson et al., 1991) found that CSR
participation is closely associated with customers and employees with few initiatives
aimed at their local community. However, on a local level, Curran et al. (cited in
Spence & Schmidpeter, 2003) note that there is a lack of research on SME
engagement in social activities. Whilst (Joseph, 2000) finds that SMEs play an
important role in terms of engagement and civic issues in regional economic
development, Goss, (1991) & (Curran et al., 2000) express a contrasting view.
Joseph’s conclusions are similar to Chrisman & Fry, (1984) findings as they state,
‘small businesses were seen to be in touch with the expectations of the society.
21
Chapter 3 Conceptual Framework and Hypothesis
This chapter will outline the theoretical framework for this thesis. General
overview of existing theories on CSR, corporate image, corporate governance and
competition intensity. Additionally, this chapter explores the factors which can
control the level of CSR, corporate governance, image and competition intensity with
respect to previous research, and how they are all connected to each other. Hypothesis
will be formulated after carefully considering the associated theories.
3.1 Stakeholders Theory
The stakeholder theory is the basic theory that indicates that a higher level of
CSR activities contributes to higher levels of market success (Freeman, 1984,
Freeman et al., 2018). According to the stakeholder principle, an organization's
effectiveness is firm by its ability to maintain relationships with its stakeholders.
Since its foundation the term has been comprehensively used in management fiction.
Stakeholder’s theory states that organizations are supposed to manage stakeholder’s
interest responsibly beyond the organizations borders and admit care towards other
silent stakeholders such as the environment and local peoples. This calls for the firm
to conceive particular pursuits to meet up with the demands of certain primary
stakeholders or key stakeholders (Charles et al., 2018). As stated by Islam & Deegan
(2008), export-oriented textile and garment industries participate in CSR practices
because of pressure from powerful stakeholders such as overseas procurers.
Hossain et al. (2015) enunciated that CSR is conveyed not just by powerful
stakeholders, but also by organizations' motivation to attain social commitments to
meet societies’ expectations. Various studies have empirically evaluated the impacts
of CSR on organization performance in recent CSR literature, with inconclusive
results, which eventually relate to the probable existence of CSR. Even though an
increasing number of studies imply a beneficial association, there is considerable
controversy on the relationship between CSR and business financial performance.
This is the fundamental theory that proposes that a higher level of CSR practices leads
to high level of business performance. Stakeholder theory initiates relationship
22
between relevant stakeholders such as, customers, employees, shareholders and the
shareholder’s wealth maximization.
The instrumental stakeholder theory depicts a significant influence between CSR
and firm principles (Gherghina et al., 2015). The fact that a firm is involved in CSR
may make society view the firm in terms of good image which can indirectly affect
the return on capital. Under the instrumental approach of stakeholder theory, CSR
should be incorporated into business planning by trying to develop business strategies
that meet the approval of stakeholders (Parker, 2005). In this way, managers could try
to maximize the benefits and value of their businesses while meeting the expectations
of their stakeholders Jensen (2001). Nevertheless, this maximization of value cannot
be measured only from a financial perspective, but also from a broader method.
Sweeney (2009) and Hammann et al. (2009) proposed to examine the relationship
between CSR and financial performance considering that socially responsible
management enabled companies to gain competitive advantages that adds value. In
both studies, a similar theoretical model is projected which basically relates three
variables: CSR, gauged as the practices of socially responsible management towards
multiple stakeholders; firm performance, as profit upgrading; and a last variable
which would bring together the potential and expected effects of suitable stakeholder
management (improving employee satisfaction, reducing absenteeism, powering
image, securing the loyalty of customers and employees. In both cases, the authors
end up stating that CSR implementation enhances financial performance through the
impact that these practices have on the organization-stakeholder relationships. In one
of the latest studies, (Torugsa et al. 2012) also found that the SMEs’ capability of
managing stakeholders, along with the development of a dynamic strategy and the
knowledge to realize a shared vision, are positively associated with a dynamic CSR.
Their research display how this dynamic CSR causes an enhancement in firm
financial performance. In relation to the literature, CSR activities can aid an
organization satisfy its stakeholders wants. (Donaldson & Preston, 1995). The
normative side of stakeholder theory asserts that part of their moral or ethical
responsibility, organizations will lead their stakeholders for their own survival
(Donaldson & Preston, 1995). Clarkson, (1995) adds strategic stance to Carroll's
(1979) paradigm, as well as economic, legal, ethical, and discretionary responsibility.
23
Scholars have used quite a number of theories in CSR research, it is impossible to

investigate CSR practices using just one theory. (Gray et al., 1995).
3.2 Resource Based View Theory
The Resource based view theory draws a firm-specific outlook on why

organizations succeed or blunder in the market place Dicksen (1996). Resources that
are valuable, scarce, unique and cannot be substituted. Barney (1991) help businesses
to achieve competitive advantages, these resources and competitive advantages assist
the organization to achieve higher financial performance (Collis & Montgomery,
1995; Grant, 1991; Wernerfelt, 1984). In accordance with resource-based view, not all
the company’s resources will be strategic or sources of competitive advantage.
Competitive advantage occurs only when there is a situation of diversification of
resource and immobility of resources.
The resource based view theory asserts that an intangible resource leads to
competitive advantage and improves an organization’s guideline when it is scarce,
unique, and non-replaceable (Barney, 1991). It acknowledges firm image as an
essential and scarce resource that can lead to competitive advantage. As a result, the
current research focuses on two theories: stakeholder theory and resource based view
theory, to analyze the mediating influence of corporate governance and firm image on
the CSR- financial performance.
3.3 Theoretical Hypothesis
Figure 3: Research Framework
24
This study has four purposes:

1. To investigate the role of CSR practices on SMEs financial performance in
Cameroon.
2. To investigate the mediating roles of corporate governance and image on CSR
on SMEs financial performance in Cameroon.
3. To investigate the moderating role of competition intensity on the relationship
between corporate governance and financial performance on SMEs in Cameroon.
4. To suggest managerial recommendations of CSR on SMEs financial
performance.
Figure 3 shows conceptual framework that was developed from this study and
which gives an overview of all the relationship that are to be tested. The independent
variable is CSR; the dependent variable is financial performance. Corporate
governance and corporate image is mediator and competition intensity are moderator
variable.
3.4 Hypothesis Development
3.4.1 Relationship between CSR and financial performance
Literature on the link between CSR and financial performance is quite wide.
Despite varied outcomes provided by academics, the majority of studies demonstrate
that CSR and financial performance have a beneficial association (Lu et al. 2014;
Griffin & Mahon 1997). Choongo (2017) reported a significant link between CSR
practice and the performance of Zambian SMEs. According to (Torugsa et al. 2012),
SMEs can achieve high financial yield by proactively making progress in their CSR
programs.
Despite the numbers of studies regarding the impact of CSR on financial
performance, the link between them is still an open debate within academia (Carroll &
Shabana, 2010; Surroca et al., 2010; Grewatsch & Kleindienst, 2017; Kim et al.,
2018). According to Hillman & Keim (2001), Lev et al. (2010), and Waddock &
Graves (1997), improving CSR practices enhances financial performance. Longo et al.
(2005) stated that most Italian SMEs perceived social responsibility as contributing to
the growth of corporate value by enhancing company image, and strengthening the
25
relation with employees and the society. Miller & Besser (2000) described a direct
link between CSR and SMEs performance.
Stakeholder theory advocates that a higher level of social responsibility brings a
greater level of performance to the company (Freeman, 1984, Freeman et al., 2018). It
asserts that the achievement of an organization relies on the business’ ability to
administer its relations with its stakeholders. Stakeholder theory is exceedingly
important in comprehending any potential link between CSR and financial
performance (Perrini et al., 2011). CSR activities, according to researchers, can assist
businesses attract more customers (Gallardo-Vázquez & Sanchez-Hernandez, 2014).
Safer workplaces and the protection of employees' human rights result in higher
production output, which boosts company performance (Dawkins & Lewis 2003;
Saleh et al., 2010). Organization supply quality products and invest in society
development initiatives as an integral part of their CSR practices, which has a long
term effect on corporate performance (Waddock & Graves 1997; Mahoney &
Roberts, 2007). Furthermore, as a good employer, an SMEs can reduce employee
turnover and increase performance by giving training and employment opportunities.
When examining the effects of CSR on financial performance, it is also necessary
to consider the time span to see the results of investments in these strategies (Martın-
de Castro et al., 2016). In the long run, CSR may create legitimacy among employees
and stakeholders that will further support the company’s development and improve
the company’s performance. As noted by Martın De Castro et al. (2016), stakeholder
engagement and the fulfilment of their expectations increase the organization’s
competitive advantage with an increase in long-term performance. Thanks to the
above considerations and given the increase in CSR issues within and outside
organizations, we assume that hypothesis CSR is, therefore, considered as a key
financial performance tool for firms. Hence, we hypothesize:
H1: CSR has a positive impact on financial performance.
3.4.2 Mediating role of corporate governance
A number of studies have examined the link between CSR and financial
performance, the results have been differing and broad (Berman et al., 1999;
Galbreath & Shum 2012; Galbreath 2018). According to current study, other elements
26
such as corporate governance play a vital role in the CSR and financial performance
link (Jamali et al., 2008; Galbreath & Shum 2012; Galbreath 2018).
Rahim (2014) asserts that CSR has an influence on organization’s governance
practices, and governance also has a positive link on financial performance. More
studies is being carried out on the linkage and interconnection between CSR and
corporate governance from several viewpoints (Jamali et al., 2008; Rahim & Alam
2014), there is still quite a few number of study on the effect of CSR practices on
governance dimensions. For example, Ho (2005) asserts that corporate governance
requires board monitoring, supervision, management, and social and environmental
obligations, and that CSR is an indispensable component of corporate governance
systems. CSR is associated to management and accountability in assuring good
corporate governance practices within an organization (Ho, 2005).
Ho (2005) states that good corporate governance increases firm competitiveness
which leads to financial performance. Kashif (2008) investigated the role of corporate
governance on financial performance on both developed and developing countries. It
can be seen from the above claims that CSR, corporate governance all have a positive
effect on SMEs financial performance. The research therefore, put forward the second
hypothesis:
H2: Corporate governance mediates the relationship between CSR and

3.4.3 Mediating role of corporate image
The link between CSR and financial performance has been explored by a large
number of researcher; however, the results have been inconsistent (Berman et al.,
1999; Galbreath & Shum 2012, Galbreath 2018). Other mediating variables like as
corporate governance, according to recent research, play an essential part in the CSR
and financial performance relationship (Galbreath & Shum 2012; Jamali et al., 2008).
The mechanism of CSR actions affecting SMEs financial performance by influencing
interest groups and improving company image is corrobated by the stakeholder theory
(Clarkson, 1995; Mitchell et al., 1997; Polonsky et al., 2005).
Stakeholders determine the allocation of their resources based on the evaluation
of the firm with respect to its image as linked to its CSR practices and ultimately
27
influence financial performance (Donaldson & Preston, 1995). SMEs are

incorporating CSR activities into their operations to boost their image amongst
stakeholders (Graafland, 2018; Reverte et al., 2016). According to Munasinghe and
Malkumari (2012), SMEs are interested in CSR actions to enhance their company
image, employee motivation, and financial performance. Tan (2007) esblished that a
company’s image leads to higher financial gains.
CSR enhances corporate image by encouraging good consumer perceptions of the
organization. Some researchers state that a company's image has a favorable impact
on its market share as well as asset and equity market returns. (Galbreath 2018;
Hammond & Slocum, 1996). Consequently, the mediating effect of company image
on CSR and performance association is legitimate from a theoretical perspective and
has been established by empirical studies (Galbreath & Shum, 2012; Saeidi et al.,
2015). However, given that CSR is context-dependent, it is still necessary to examine
the link between CSR and financial performance in SMEs from developing nations
(Tilt, 2016). Stakeholder theory is the most pertinent conceptual foundation for
research on CSR (Fassin et al., 2017; Vashchenko, 2017), and intensifies the
mediating role of firm image on the link between CSR and financial performance.
Thus, we hypothesize as follows:
H3: Corporate Image mediates the relationship between CSR and financial
performance.
3.4.4 Moderating role of competition intensity
Numerous researches have studied and proven the recurrent and positive link
between governance and financial performance in the management literature.
According to the stakeholder theory, companies that have better ties with their
stakeholders are more successful over time because transaction costs decrease as the
relationships develop.
Similarly, the RBV theory contends that good governance is not only desirable,
but it also improves financial performance. Flanagan et al., (2013) contended that
Returns on asset (ROA) and corporate governance have a significant link. Image, like
other capital-intensive assets, entails a substantial amount of financial resources.
28
Firms with superior governance procedures have a better reputation, which leads to
higher performance.
Different governing processes have varying degrees of influence, which is rarely
appreciated. Comparably, the performance of managers or directors would be greatly
foreseeable if they operate in an industry which is highly competitive. Henceforth, the
research proposes that, competition intensity moderates the performance of financial
gains and corporate governance. Therefore, we formulate that:
H4: Competition intensity moderates the relationship between CG and

29
Chapter 4 Research Design
This section addresses the data methods for conducting the research. Specifically.
It includes the study design, target population, sample size and data collection
processes and the methods to analyze data. In fact, data and methods is significant in
choosing the right and efficient research method to deduce the useful result.
4.1 Methodology
This study is supported by extensive literature reviews, where research articles

are analyzed and blended. Hypothetical perspectives based on document exploitation
supported by most recent findings have been used to address the research questions
and formulated the specific hypotheses of the research.
The objectives of this research is to investigate the relationship between CSR and
SMEs financial performance, with corporate governance and corporate image as
mediating factors with competition intensity as a moderating variable. In order to test
the proposed hypothesis, the research conducted an empirical study. The data for the
studies were collected in google online survey, which is the largest service provider of
online surveys on earth.
4.2 Questionnaire Design
To address the research questions, this research relied on self-constructed survey

involving several scales developed to support the stakeholder theory and resource
view based theory that measured the questioned variables. The questionnaire has two
sections. The first section of the questionnaire presents the respondent profiles. The
respondent’s profile of the research comprised age, sex, education level, experience,
position, firm size and industry of SMEs. The second section presents the main aims
of the study.
The research used 4 constructs for CSR engagement including philanthropic,
legal, ethical, and economics respectively. However, the study asked respondents
questions on SMEs financial performance, the mediating role of corporate
governance, and image, and the moderating impact of competition intensity. Further,
30
the researcher respects the respondents to the research, thus ensured confidentiality of
any information given by them. In the research, the researcher shall refrain from
plagiarism and paraphrasing without authentic referencing. (Schutt & Russell 2006) as
cited in Osei Bonsu (Mandella et al., 2019) alluded that in carrying out research the
researcher must be guided by ethical considerations affecting the profession.
4.3 Research Sample and Design
The sample size for this research consist of SMEs population in Cameroon from
diverse sectors. Taken from the ministry of small and medium size enterprise in
Cameroon, whereby most of the SMEs were recorded (MINPMEESA, 2018).
The research was carried out and a consistent investigation was distributed to
executives of the sampled SMEs. The researcher used purposeful sampling after
selecting the sampled firms and plaintiffs of the organizations. This study has been
extracted from earlier studies, and a classic study was conducted to legalize it. The
study was carried out to ensure that no questions of less relevance were included and
to facilitate a correct understanding of the survey questions in order to receive true
answers from respondents.
The questions were all scored on a seven-point Likert scale, which is broadly
applied in studies on CSR in SMEs (Gallardo-Vázquez & Sánchez-Hernández, 2014).
Moreover, descriptive statistics such as frequencies, percentages, means and standard
deviation were used to provide and present data. The research asked respondents
personal demographics and their respective firms.
4.4 Data Collection
The data is gathered from various SMEs in Cameroon. The survey made use of
several scales that measure the to be tested variables which will be explained further
in the next subsections. The data were obtained in google online, which is the largest
service provider of online questionnaires in the world. Google online survey provides
quality research participants since all respondents will have access to the online link
issued. The questionnaire was sent online because the researcher is presently in China
and not in the country concerned with the research. The research asked respondents’
31
personal demographics and their respective firms. The missing and incomplete data
by respondents were screened out before arriving at an accurate figure for analysis.
After circulating the questionnaires, the sample comprised 250 SMEs with 2
respondents from each firm summing to 500 respondents. After screening out the
missing and incomplete data, the research had a total of 402 respondents for 220
firms. The research was conducted in July and completed by August 2021.
4.5 Variable Measurements
4.5.1 Dependent variable
Financial performance was adopted from previous study by (Gunday et al., 2011,
Wang et al., 2012; Martinez-Conesa et al., 2017). This self-administered questionnaire
included 4 items. A 1-7 Likert scale was used to score the SMEs performance
(ranging from far below competitor =1 to far above the competitor =7).Centered on
earlier findings, the subjective approach of measuring SMEs’ financial performance
was adapted in this study (Man, 2002; Sweeney, 2009).Because of the reluctance of
SME owners/managers, objective data on financial performance is unapproachable.
Using scales as a substitute to real data to gauge SMEs performance is advisable.
(Man, 2002). However multiple research has shown a strong link between subjective
and objective metrics, this method was used by (Wall et al., 2004). As a result, it is
widely assumed that owners are well-versed in their firms' financial performance.
4.5.2 Independent variable
CSR items were adapted from a previously validated study (Guerrero‐Villegas et

al., 2018; Lindgreen et al., 2009; Martinez-Conesa et al., 2017), and comprised 18
items classified into 4 groups: philanthropic , economics, Legal, and ethical. The
extent of involvement in CSR was measured using a 7-point scale (ranging from
strongly disagree = 1 to strongly agree =7).
4.5.3 Mediating variables
Corporate governance was measured by 8 items adopted by (Brennan &

Solomon, 2008). Firms were asked to determine their governance in increasing
32
performance. The 8 items was measured using a 7-point scale (ranging from strongly
disagree = 1 to strongly agree =7).
Corporate image was measured by three items adapted from (Saeidi et al., 2015).
Firms were required to determine their customers’ perceptions of the organization’s
image. The construct comprised 3 items and was measured using a 7-point scale
(ranging from strongly disagree = 1 to strongly agree =7).
4.5.4 Moderating variable
The research used competition intensity as moderating variable on the corporate

governance and SMEs performance and was measured by 4 items adopted from the
literature (Jaworski & Kohli, 1993). The questionnaires used 4 items on a 7 Likert
scale ranging (from strongly disagree = 1 to strongly agree =7).
4.5.5 Control Variables
Lastly, as control variables in the study, the industry type and firm size were
evaluated. Both size (Russo & Fouts, 1997; Waddock & Graves, 1997; Wagner, 2010)
and industry (Hillman & Keim, 2001; Husted & Allen, 2007; Waddock & Graves,
1997) have been found to influence performance. The size of this survey is based on
the number of participants. Waddock & Graves (1997) stated that industry type is
done in accordance with the definitions.
4.6 Sample Descriptive Statistics
4.6.1 Descriptive statistic of SMEs
The research was conducted for SMEs in Cameroon. The questionnaire asked
respondents to evaluate their firm profiles. Then they were asked to confirm the firm
age, industry type and the number of employees in their respective firm. First,
respondents were asked on the firm age based on 5-10years, 11-15years, and above 16
years. Second, they were asked on the industry type their firm is operating either on
manufacturing, service (insurance, finance, retail, and wholesale). Finally, they were
asked on the number of employees in their firm as at the period the research was
conducted. The results are displayed in Table 2. It is found that, most of the firms
33
have existed from 1-10 years representing almost 50 percent (43.2%). The research
asked respondents questions on the impact of CSR on SMEs’ performance with
corporate governance and image acting as mediating variables, and competition
intensity as moderating variable. The missing and incomplete data by respondents
were screened out before arriving at accurate figure for scrutiny.
Table 2 Firm Profile

Profile Distributions Number (220) Percentage (%)
Firm age 5-10years 95 43.2
11-15years 80 36.3
Above 16 years 45 20.5
Industry Manufacturing 65 29.5
Service 42 19.1
Finance and Insurance 68 30.9
Retail and Wholesale 45 20.5
Employee 5-10 100 45.5
11-15 25 11.4
16-25 65 29.5
25-50 30 13.6
Source: Author's own work.
4.6.2 Descriptive statistic of employees
After screening out the missing and incomplete data, the research had a total of
402 respondents. The personal demographics of the respondents are displayed in
Table 3. Of the total 402 respondents, the 344 representing 85.5% were male, 14.5
were females. As regard the age, majority of the respondents were between the ages
of 25-35 with 49.7%, 68.8% hold bachelor degree, and majority (74.6%) of the
respondents have worked with the firm for more than 11 years. For industry type,
majority of the firms operates in the manufacturing sectors (52.2%), followed by
finance and insurance (24.8%). Finally, 30% of the SMEs have employees between
25-50 years, with 26.8 % of employees between 5-10 respectively. At the end of the
survey, the research indulged a terrific check by asking the respondents whether they
had answered the survey in a serious manner so that their responses could be utilized
for scientific analysis (Aust et al., 2013).
Table 3 Respondent Profile
34
Profile Distributions Number (402) Percentage (%)

Age 25-35 200 49.7
36-45 110 27.3
46-above 92 23
Gender Male 344 85.5
Female 58 14.5
Education Bachelor 276 68.6
Masters 123 30.5
Ph. D 3 9
Experience 1-5yrs 58 14.5
6-10yrs 44 10.9
11-above 300 74.6

Source: Author's own work.
4.7 Data Analysis
The data was analyzed using the Smart Partial Least Squares (PLS) technique,
which is a variance-based SEM technique. Smart-PLS was utilized to carry out the
SEM and to test hypotheses by creating path analyses. Because of its potential for use
in prediction research that uncovers complicated problems with little prior theoretical
basis, this method was chosen (Hulland et al., 2010). PLS-SEM is an excellent fit for
our research because it is explanatory (Farooq & Radovic-Markovic 2017).
Researchers in a range of subjects, notably in the social sciences, have found SEM to
be a useful technique (Hooper et al., 2008). Anderson & Gerbing (1988) separated
SEM into measurement and structural models. The validity and reliability of the data
were investigated using a measuring approach. The structural model was used to
investigate the link between several dependent and independent variables, as well as
mediating and moderating variables (Smith, 2003). Following Hair Jr et al. (2016)
suggestions ensured data quality and structural model coherence.
35
Chapter 5 Data Analysis and Hypothesis Testing
This chapter presents the data collected and discusses the findings. The chapter
presents the analysis of data obtained from respondents on the impact of CSR on
financial performance using SMEs in Cameroon. The chapter provides the findings of
the other major objectives of the study.
5.1 Reliability and Validity Analysis
All measures used in this study were drawn from the prior studies and then
reviewed by an expert panel of management researchers to ensure content legitimacy.
Table 4 shows the Smart-PLS, factor loading, reliability, and average variance
explained (AVE) of the items used to measure CSR, CG, CI, and competition
intensity and financial performance. The factor loadings and AVE for all items were
above 0.7 and 0.5, respectively, and exceeded the standard threshold. Consequently,
convergent validity was established (Henseler et al., 2009). The composite reliability
amongst the identified constructs surpassed the limit of 0.7, as recommended by Hair
et al., (2014). This reveals that the reliability of all scales was maintained in this
study. The Common Method Deviation Test comprise of CR and AVE. This thesis
used Amos software for the data analysis. Amos is a powerful structural equation
modeling (SEM) software that helps support research and theories by extending
standard multivariate analysis methods, including regression, factor analysis,
correlation and analysis variance.
36
Table 4 Constructs with Items Showing Reliability, Factor Loading, and Convergent Validity
Values
Constructs Item FL α /CR AVE
Philanthropic Our organization gives back to the community 0.821
PL-1 Our organization incorporates charitable contributions into its business 0.793 0.885/0.91 0.636
activities 3
PL-2 Local nonprofits benefit from our company’s contributions 0.771
PL-3 Our organization is engaged in corporate giving 0.772
Economics Our organization has a course of action in place to respond to every 0.815
customer query.
EC-1 We continually improve the quality of our products. 0.813 0.873/0.87 0.647
6
EC-2 We strive to lower our operating costs. 0.855
EC-3 We closely monitor employees’ productivity. 0.749
Legal Managers are informed about important environmental laws 0.823

L-1 All our products meet legal standards. 0.826 0.896/0.92 0.970
3
L-2 Our contractual obligations are always honored. 0.827
L-3 The managers of this organization adhere to the law 0.870

Ethical Our business has a comprehensive code of conduct 0.821
ET-1 Top managers scrutinize the possible negative effects of our activities 0.793
on the society.
ET-2 We are recognized as a trustworthy company. 0.771
ET-3 Impartiality toward coworkers and business partners has a crucial role 0.772 0.886/0.91 0.636
in our employee assessment process. 3
ET-4 A confidential course of action is in place for employees to report any 0.815
misconduct at work (such as stealing or sexual harassment)
ET-5 Our sales assistants and employees are demanded to give full and 0.813
correct information to all customers.
Performance
P-1 Average return on investment 0.802
P-2 Average profit. 0.792 0.813/0.77 0.649
6
P-3 Profit growth. 0.815
P-4 Average return on sales 0.788
Governance
CG-1 The board has clear policies. 0.801
CG-2 The Chairman and CEO are independent. 0.818
CG-3 We have board of the directors’ committees. 0.777
CG-4 The organization reviews strategic goals. 0.742 0.830/0.87 0.688
7
CG-5 There is a composition of independent directors. 0.700
CG-6 We have sufficient remuneration schemes 0.832
CG-7 The company’s ownership structure is diversified 0.701
CG-8 We have governance related code of conducts 0.717
37
Image
CI-1 Our organization has positive customer perception. 0.772
CI-2 Our organization is a highly reputed company 0.771 0.830/0.86 0.656
6
CI-3 Customers consider our company professional organization 0.882
Com.
Intensity
Com 1 Competition in this business is severe 0.851
Com 2 One hears of new competitive moves almost everyday 0.842 0.845/0.82 0.614
3
Com 3 Intensive marketing activities are a distinctive feature of our industry 0.715
Com 4 Anything that one rival can provide, others can readily produce 0.715
N.B. α - Cronbach Alpha; AVE - Average Variance Extracted; CR - Composite Reliability; FL- Factor loading.
Source: Author's own work
5.2 Descriptive Statistics
Table 5 shows the descriptive statistics including mean, standard deviations, and
correlations for the variables used in the research.
5.3 Correlation Analysis
Table 5, statistics and correlation is presented. From the table, the results show
that, mean 2.312 to 4.08, the standard deviation ranges from 0.212 to 0.72, skewness
values range -0.826 to -1.421, and kurtosis ranges from 0.475 and 1.994. There is no
substantial issue in the data collected as the kurtosis value was below 10, and the
skewness value was below 2-3 (Kline, 2011). There was a substantial and positive
correlation between the constructs. This confirms that, the signs are consistent with
the literature and the study since the magnitude coefficient falls below 0.05.From the
results, mediating and controlling variables such as corporate governance, governance
image, and competition intensity are absolutely correlated with both CSR and
financial performance. It reveals that, management of SMEs need to realize
the importance of CSR.
38
Table 5 Statistics and Correlation

Mean Std. Dev. SK KT 1 2 3 4 5
FP 3.800 0.580 -0.826 0.585 -
CSR 3.950 0.480 -0.826 0.475 0.322** -
CG 3.1071 0.212 -1.421 1.554 0.235** 0.251 -
CI 4.080 0.620 -1.411 1.994 0.221** 0.126 0.036 -
0.58
CPI 2.312 0.721 -1.222 1.612 0.168*** 0.526 0.625 -
1
Note: SD - Standard deviation; SK - skewness; KT - kurtosis; CSR - Corporate social responsibility; FP - Financial
performance; CI – Corporate Image, CG is corporate governance, CPI is competition intensity **. Significant
correlation at the 0.05 level, 5%.
5.4 Structural Equation Model
This study was used the bootstrapping technique with the samples in Smart-PLS
to test the hypotheses and path coefficients after establishing the measurement
model's sufficient reliability and validity, as well as overall model fit. The variance
inflation factor (VIF) values were used to verify for multi collinearity and common
method bias before testing the hypothesis. VIF greater than 3.3 indicates the presence
of substantial multi collinearity and can also indicate that common method bias is a
concern (Diamantopoulos & Siguaw, 2006). The VIF scores in this study are less than
3.3, indicating that there is no multi collinearity problem (Hair et al., 2014), and the
model is free of the usual method bias problem (Kock, 2015). The research presents
the SEM results, including path estimates and p-values. The figure shows SEM results
Figure 4: SEM results
39
Source: Authors own work
Table 6 The Importance of Path Coefficients

Hypothesis Relationship Coefficients t-statistics p-value Decision
H1 CSR-FP 0.313*** 5.050 0.000 Supported and accepted
H2 CSR-CG-FP 0.283*** 6.851 0.000 Supported and accepted
H3 CSR-CI-FP 0.357*** 4.765 0.000 Supported and accepted
H4 CPI-CG-FP 0.412** 3.857 0.000 Supported and accepted
Note: CSR corporate social responsibility, FP is financial performance, CG is corporate governance, CI corporate
image, CPI is capital intensity. *** p<0.001. and R2 value for FP is 36
Table 6 above, reveals that there is statistically positive and significant link
between CSR and financial performance with a path coefficient value of β = 0.313, t
= 5.050, p < 0.001. Corporate governance also has a significant positive impact on
CSR and financial performance (β = 0.283, t = 6.851, p < 0.001). In addition, Firm
image has a significant positive effect on CSR and SME performance (β = 0.357, t =
4.765, p < 0.001). The R2 value of endogenous constructs for the financial
performance (dependent variable) is 0.26, stating that the structural model reports
around 36 percent of the variance in financial performance. The results showed that
the control variables employed in this study had significant influence and were thus
included the structural equation model but excluded from the final model as the
research focused on the moderating and mediating variables. The findings are
consistent with the findings of Martinez-Conesa et al. (2017).
5.5 Hypothesis Testing
This research exam the hypothesis based on the results. The results test the
hypothesis using path investigation.
5.5.1 Effects of CSR on financial performance
The analysis of the results shows positive and significant impact of CSR on
financial performance. The findings are consistent with the findings of Guerrero‐
Villegas et al., (2018). This shows that, the sum of money disbursed on CSR
significantly describe the SMEs performance in Cameroon. Therefore, managers in
SMEs grasp and embrace CSR and disclosures. In view of this, companies should be
40
socially responsible in order to augment the value for the shareholders and other
stakeholders.
5.5.2 Mediation analysis (corporate governance and image)
Table 7 Mediation Analysis (Corporate Governance and Image)

Path Path coefficients Total effect p-value Decision
CSR-CG-FP 0.387 0.432 0.000 Accepted
CSR-CI-FP 0.283 0.312 0.000 Accepted
The analysis of the mediation effects is performed based on the technique of Hair
Jr et al. (2016), where primarily, the total effects of CSR on performance with the
mediators are measured. The results show that, corporate governance has a direct and
substantial role on the link between CSR and SMEs performance according to the
Table 7. This makes the hypothesis accepted that corporate governance mediates the
CSR and financial performance relationship of SMEs in Cameroon.
In addition, results show that a firm’s image has partial mediation role on the link
between CSR and SME performance making the hypothesis 3 accepted in the study.
This implies that, existence of full mediation demonstrates that CSR in conjunction
with corporate governance and corporate image helps in achieving better financial
performance.
5.5.3 Moderation effects of competition intensity
Table 8 Testing the Moderation Effects of Competition Intensity

Path Path Total T-value p-value Decision
coefficients effect
Direct without CG-FP 0.322 N. A 4.866 0.000 Accepted
moderating
Indirect with CG-FP 0.323 0.423 3.350 0.000 Accepted
moderator FP-CPI 0.384
CPI-CG 0.281
Note: CG, corporate governance, FP, financial performance, CPI, competition intensity, and N.A is not applicable
The analysis of moderation is performed based on the technique using the path
coefficient where fundamentally, the direct effects of corporate governance on
financial performance (without a moderator) is measured. However, by including the
moderator, the indirect effect was analyzed. Nonetheless, the impact of total corporate
41
governance on performance was resolute. The findings show that, competition

intensity has partial moderation role of the relationship between corporate governance
and SMEs performance (see Table 8).
The findings indicates that, when corporate governance becomes poor, the
substitutions impact suggest that competition intensity acts as disciplinary tool, hence
forcing managers to improve performance and remove slack. Alternatively, if
competition and corporate governance are complementary, product market
competition alone may not be enough to minimize productivity inefficiencies in a
weak corporate governance environment. But the theoretical works shows the
significance moderating role of competition intensity between corporate governance
influence financial performance.
5.6 Effect of Control Variables
Table 9 Impact of Control Variables on FP

FP
Size Industry R2 Path loading and t value
Size Industry
** -- 0.5907 0.0385 , t = 0.7161 ---
-- ** 0.5976 --- 0.0832, t = 2.0354
** ** 0.5979 0.0243, t = 0.4145 0.0821, t = 1.7071
Significant *p<0.05 (0.05==1.545)
Table 9 displays the impact of control variables in the survey. The effect of
control variables were evaluated by estimating the R2, path coefficients and t-values
considering two conditions: (a) the effects of control variables was considered
separately based on size and industry; (b) the effects of control variables size and
industry was assessed together. To examine the significance of the control variables’
impact, it is foremost to explore the effect of control variables under different
circumstances, which also aids to examine the vibrant links of control variables.
Upon careful investigation of the effect of control variables on financial
performance (Table 9) it turns out that the effect of industry is significant (β= 0.0832,
t = 2.0354; β= 0.0821, t = 1.7071; p <0.05) in all conditions as mentioned earlier;
nonetheless, the effect of size is insignificant in all conditions. This is also consistent
42
with the study of Galbreath (2010). Based on these results, it is deduced that firm
industry type has a significant impact on CSR assisted financial performance. The
finding also reveals that size does not always significantly contribute to CSR assisted
firm performance; rather, industry (type) plays a major role in this regard.
43
Chapter 6 Conclusion
This chapter consists of a summary of findings and results obtained in chapter

five. It gives a clear picture of the conclusion that was drawn, the limitations that the
researcher faced during data collection, recommendations and areas for further
studies. This is guided by the following objectives; the role of CSR practices on SMEs
financial performance in Cameroon, the mediating roles of corporate governance and
image on CSR on SMEs performance in Cameroon, the moderating role of
competition intensity on the relationship between corporate governance and financial
performance on SMEs in Cameroon and to suggest managerial recommendations of
CSR on SMEs financial performance.
6.1 Discussions
CSR and financial performance link has been widely examined. Evidence are still
unclear, which could be due to the involvement of mediating and moderating
variables being ignored. The examination of the link between CSR and financial
performance from the perspective of corporate governance and firm image contributes
towards clarifying this connection. Only a few studies have focused on the SMEs
sector. Consequently, the current study utilized structural equation modeling to
explore the link between CSR practice and SMEs financial performance in Cameroon,
with a focus on corporate governance and company image as mediating factors and
competitive intensity as a moderating issue.
6.2 Theoretical Implications
Theoretically, this research has the following consequences. First, it adds to the
body of knowledge about the relationship between CSR and SMEs' success, and it
backs up stakeholder theory, which asserts that CSR has a positive effect on business
performance. By studying the influence of CSR on SMEs financial performance in a
new country environment, this study adds to the literature on stakeholder and resource
44
based view theories and contributes to the literature on stakeholder and resource based
view theories.
Second, firm image is a source of competitive advantage, a limited number of
studies have looked into how CSR may be used to enhance a company's image (Kim
& Kim, 2016). As a result, this study adds to the relatively young literature on the link
between CSR and corporate image (Su et al., 2016).
Third, the findings back up the resource based view by indicating that corporate
image has a beneficial impact on financial performance by serving as an intangible
asset for firms who are want to improve their fundamentals. Fourth, this research
looked into the processes through which CSR improves business performance, as well
as the mediating effects of firm image and governance on the link between CSR and
financial performance from the context of SMEs in Cameroon. This study contributes
to a better understanding of CSR outcomes by highlighting the partial mediating
influence of business image and governance in the link between CSR and
performance. Businesses that engage in more CSR activities have a better chance of
achieving strong firm governance and image, which can help them improve their
financial performance. The impact of corporate governance on CSR is also
investigated in this research, which makes a substantial contribution to the CSR
literature.
6.3. Managerial Implications
Managers may be motivated to engage in social responsibility activities by the

role of CSR initiatives in improving firm performance. CSR should be prioritized by
businesses in terms of offering high-quality products and services, participating in
community and environmental improvement projects, and enhancing their public
image. Developing and maintaining a positive reputation can assist them in achieving
high levels of distinctiveness and client loyalty. SME executives should include CSR
into their social objectives and utilize it as a strategic tool to boost their
competitiveness (Turyakira et al., 2014). CSR engagement should be perceived as a
means to develop intangible assets like reputation, which are also beneficial for
excellent financial performance. The findings of this study can help entrepreneurs,
researchers, and policymakers understand and effectively implement a CSR strategy,
45
which is critical for improving SMEs' business image, governance, and financial
performance in developing nations.
6.4. Limitations
The research encountered some caveats. First, the research examined SMEs in
Cameroon. Therefore, the ending arrived at should not be subjected to all industries,
and developing countries since CSR practices are tedious and complex to describe
from one level of decision.
6.5 Recommendations for Further Studies
Future research should look into the impact of CSR reporting issues on all
Cameroon businesses, as there are many large businesses in Cameroon. This will
expand the sample size, allowing for a more thorough understanding and conclusive
inference that CSR has an effect on a company's financial performance.
46
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Appendix
Questionnaire
The aim of this survey is to gather data about the impact of corporate social
responsibility on financial performance, and the mediating effects of corporate
governance and corporate image, and the moderating effect of competitive intensity.
Thank you in advance for your voluntary participation. It depicts your

willingness to contribute to the enhancement of the profession and the study. All
responses you provide are confidential and will be published only in summary,
statistical form. This survey does not have any foreseeable risks to you and your firm.
Respondent Profile
Age: Sex: Male [ ] Female [ ] Position:
Education Level: Bachelor’s Degree [ ] Master’s Degree [ ] Ph.D. [ ]
Experience: 1-5 Years [] 6-10 years [ ] 11 years and above [ ]
Company Name:
Business Demographics
1. How long has your firm been operating?
 Less than 5years

 Between 5-10 years
 Between 11-15 years
 Above 16 years
2. How many employees do you have?
• Less than 5
• Between 5 and 15
66
• Above 50
3. Sector in which the business operates.
• Manufacturing/processing
• Transport/postal services
• Retail/wholesaling
• Food and chemical
• Tourism and hospitality
• Finance and insurance
• Health and social work
• Education
• Others
This section asks questions on the measurement of CSR and financial

performance. Please indicate according to the items below.
(1-Strongly disagree 2-Disagree 3-Somewhat disagree 4-Not sure 5-Somewhat
agree 6-Agree 7-Strongly agree)
Measures and Items Seven-point scale
Our company’s overall financial performance compared with
rival firms over the past year on
1. Average return on investment of our organization is better
1 2 3 4 5 6 7
as opposed to rival organizations.
Financi
al 2. Average profit of our organization is better as opposed to
1 2 3 4 5 6 7
Perfor rival organizations.
mance
3. Profit growth of our organization is better as opposed to
1 2 3 4 5 6 7
rival organizations.
4. Average return on sales of our organization is better as

1 2 3 4 5 6 7
opposed to rival organizations.
Philant
1 2 3 4 5 6 7
hropic 1. Our organization gives back to the community.
67
2. Our organization incorporates charitable contributions into

1 2 3 4 5 6 7
its business activities.
CSR
3.Local non-profits benefit from our company’s contributions 1 2 3 4 5 6 7
4.Our organization is engaged in corporate giving 1 2 3 4 5 6 7

1. Our organization has procedures in place to address every
1 2 3 4 5 6 7
Econom customer query.
ics CSR
2. We continually improve the quality of our products. 1 2 3 4 5 6 7
engage
ment 3. We strive to lower our operating costs. 1 2 3 4 5 6 7
4. We closely monitor employees’ productivity. 1 2 3 4 5 6 7
1. Managers are informed about important environmental
1 2 3 4 5 6 7
Legal laws.
CSR 2. All our products meet legal standards. 1 2 3 4 5 6 7
Engage
3. Our contractual obligations are always honoured. 1 2 3 4 5 6 7
ment
4. The managers of this organization adhere to the law. 1 2 3 4 5 6 7
1. Our business has a comprehensive code of conduct. 1 2 3 4 5 6 7
2. Top managers scrutinize the possible negative effects of our
1 2 3 4 5 6 7
activities on the society.
3. We are recognized as a trustworthy company. 1 2 3 4 5 6 7
Ethical 4. Impartiality toward co-workers and business partners has a
CSR 1 2 3 4 5 6 7
crucial role in our employee assessment process.
Engage
ment
5. A confidential course of action is in place for employees to
report any misconduct at work (such as stealing or sexual 1 2 3 4 5 6 7
harassment).
6. Our sales assistants and employees are demanded to give

1 2 3 4 5 6 7
full and correct information to all customers.
1. The board has clear policies. 1 2 3 4 5 6 7
2. The Chairman and CEO are independent. 1 2 3 4 5 6 7
3. We have board of the directors committees. 1 2 3 4 5 6 7
Corpor
ate 4. The company reviews strategic goals. 1 2 3 4 5 6 7
Govern 5. There is a composition of independent directors. 1 2 3 4 5 6 7
ance
6. We have sufficient remuneration schemes. 1 2 3 4 5 6 7
7. The company’s ownership structure is diversified. 1 2 3 4 5 6 7
8. We have governance related code of conducts 1 2 3 4 5 6 7
1. Our company has positive customer perception. 1 2 3 4 5 6 7
Custom
er 2. Our company is a highly reputed company 1 2 3 4 5 6 7
Image
3. Customers consider our company as experts, 1 2 3 4 5 6 7
1.Competition in this business is severe; 1 2 3 4 5 6 7
Compet 2.One hears of new competitive moves almost everyday 1 2 3 4 5 6 7
ition
3.Intensive marketing activities are a distinctive feature of our
Intensit 1 2 3 4 5 6 7
industry
y
4.Anything that one rival can provide, others can readily
1 2 3 4 5 6 7
produce
68
Acknowledgement
I would firstly like to express my gratitude to my supportive supervisor, Professor

Yixi Xue, for the useful comments and patience throughout my research. In addition, I
like to thank the participants in my survey, who have willingly shared their precious
time and who supported my thesis by giving me honest and truthful responses.
Furthermore, I would like to thank the professors from the thesis committee that
have been honest and concise in providing feedback and suggestions for further
improvement of my thesis. Finally, I must express my very profound gratitude to my
family and friends for providing me constant support and endless encouragement
throughout my time of studying in China and through the process of writing this
thesis. This accomplishment would not have been achievable without their support.
Thank you.
69

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上海大学硕士学位论文

姓 名：ATEUFACK DJOGHO RAMECESSE SANDRA 学号：18760010

论文题目: The Impact of Corporate Social Responsibility on Financial Performance: Evidence

The Impact of Corporate Social

A Dissertation Submitted to Shanghai University for the Degree

The Impact of Corporate Social

M．D．Candidate： ATEUFACK SANDRA

School of Management, Shanghai University

There is an increasing interest in and desire for corporate social responsibility

governance and corporate image, and moderating role of competition intensity in

Keywords: CSR; SMEs; Financial Performance; Corporate Governance; Corporate

1.1 Research Background.........................................................................................1

1.2 Theoretical Background......................................................................................4

1.3 Objectives of the Thesis......................................................................................5

1.4 Research Questions.............................................................................................6

1.5 Research Methods...............................................................................................6

1.6 Significance of the Thesis...................................................................................6

1.7 Contributions of the Thesis.................................................................................7

1.8 Research Structure..............................................................................................8

Chapter 2 Literature Review................................................................................10

2.1.1 Concept of CSR......................................................................................10

2.1.2 Dimensions of CSR................................................................................12

2.2 Firm Performance.............................................................................................13

2.2.1 Concept of firm performance.................................................................13

2.2.2 Measurement methods of financial performance....................................13

2. 3 Relationship between CSR and Financial Performance...................................15

2.3.1 Positive relationship...............................................................................16

2.3.2 Negative relationship..............................................................................17

2.3.3 Neutral relationship................................................................................17

2.3.4 Relationship for SMEs...........................................................................17

2.4 Corporate Governance......................................................................................18

2.5 Corporate Image................................................................................................18

2.6 Competition Intensity........................................................................................19

2.7 Background of SMEs in Cameroon...................................................................19

Chapter 3 Conceptual Framework and Hypothesis..............................................22

3.1 Stakeholders Theory.........................................................................................22

3.2 Resource Based View Theory...........................................................................24

3.3 Theoretical Hypothesis.....................................................................................24

3.4 Hypothesis Development..................................................................................25

3.4.1 Relationship between CSR and financial performance...........................25

3.4.2 Mediating role of corporate governance.................................................26

3.4.3 Mediating role of corporate image.........................................................27

3.4.4 Moderating role of competition intensity...............................................28

Chapter 4 Research Design..................................................................................30

4.2 Questionnaire Design........................................................................................30

4.3 Research Sample and Design............................................................................31

4.4 Data Collection.................................................................................................31

4.5 Variable Measurements.....................................................................................32

4.5.1 Dependent variable.................................................................................32

4.5.2 Independent variable..............................................................................32

4.5.3 Mediating variables................................................................................32

4.5.4 Moderating variable...............................................................................33

4.5.5 Control Variables...................................................................................33

4.6 Sample Descriptive Statistics............................................................................33

4.6.1 Descriptive statistic of SMEs.................................................................33

4.6.2 Descriptive statistic of employees..........................................................34

4.7 Data Analysis....................................................................................................35

Chapter 5 Data Analysis and Hypothesis Testing................................................36

5.1 Reliability and Validity Analysis......................................................................36

5.2 Descriptive Statistics.........................................................................................38

5.3 Correlation Analysis.........................................................................................38

5.4 Structural Equation Model................................................................................39

姓名：ATEUFACK DJOGHO RAMECESSE SANDRA 学号：18760010