Effects of corporate social responsibility towards stakeholders and environmental management on responsible innovation and competitiveness

Journal Pre-proof Effects of corporate social responsibility towards stakeholders and environmental management on responsible innovation and competitiveness Tarek Bel Hadj PII:

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DOI:

https://doi.org/10.1016/j.jclepro.2019.119490

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JCLP 119490

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Journal of Cleaner Production

Received Date: 11 March 2019 Revised Date:

23 November 2019

Accepted Date: 27 November 2019

Please cite this article as: Hadj TB, Effects of corporate social responsibility towards stakeholders and environmental management on responsible innovation and competitiveness, Journal of Cleaner Production (2019), doi: https://doi.org/10.1016/j.jclepro.2019.119490. This is a PDF file of an article that has undergone enhancements after acceptance, such as the addition of a cover page and metadata, and formatting for readability, but it is not yet the definitive version of record. This version will undergo additional copyediting, typesetting and review before it is published in its final form, but we are providing this version to give early visibility of the article. Please note that, during the production process, errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain. © 2019 Published by Elsevier Ltd.

Effects of corporate social responsibility towards stakeholders and environmental management on responsible innovation and competitiveness

Tarek Bel Hadj a,b a

Department of Business Administration, College of Business and Economics, Qassim University, Buraydah, 52571, Qassim, Saudi Arabia b

Faculty of Economics and Management of Sousse, University of Sousse, Tunisia

Mail: [email protected]

Effects of corporate social responsibility towards stakeholders and environmental management on responsible innovation and competitiveness

Abstract Our paper aims to analyze the role played by corporate social responsibility in boosting the responsible innovation and the competitiveness of North African small and medium-sized enterprises by focusing on the commitments toward internal and external stakeholders as well as environmental management. In our study, we used a multiple regression analysis applied to a sample of 131 SMEs from North Africa. Our results showed that the mediating effects of responsible innovation in the relationship between corporate social responsibility, environmental management and the competitiveness of small and medium-sized enterprises are driven by the inclusion of the stakeholders in the innovation process, the anticipation of the future trends in terms of socially responsible innovation, and responsiveness to potential risks. The originality of this paper lies in the choice of the field of application of the study, which is corporate social responsibility in the case of developing countries and the attempt to formulate a sustainable development model based on responsible innovation in the case of small and medium-sized enterprises.

Keywords: Corporate social responsibility; Responsible innovation; Competitiveness; Small and Medium-sized Enterprises; North Africa.

1. Introduction The increasing attention paid to corporate social responsibility in developing countries have not sufficiently incorporated the role of small and medium-sized enterprises (SMEs) compared to the developed world. This observation is of paramount importance, since SMEs are the economic engine of the majority of developing countries, given their massive contribution to the absorption of unemployment, the reduction of poverty and the creation of wealth. In fact, most of the researches on corporate social responsibility aim at a greater understanding of the theme (Aguinis and Glavas, 2012) without trying to treat the subject outside the developed world (Kolk and Van Tulder 2010; Jamali and Karam, 2018). From their side, Jamali and Caroll (2017) described the role that SMEs in developing countries can play in terms of corporate social responsibility for improving the profitability of SMEs as well as the conditions of employees and the reduction of environmental pollution. These authors also analyzed the benefits and obstacles that international organizations and support agencies present to facilitate or hinder the adoption of corporate social responsibility actions for SMEs in developing countries. However, no practical results have been reported, especially the way in which responsible innovation stimulates the competitiveness of SMEs in developing countries. In addition, several researches have focused on the key elements of corporate social responsibility and the factors of responsible innovation (Mulgan et al. 2007; Neumeier, 2017), but few of them have analyzed the dimension level effects of corporate social responsibility on the dimension level of responsible innovation and competitiveness. In neo-institutional theory, external forces affect the company's strategic decisions. In this perspective, the company's behavior is not only a response to market pressures, but also a response to institutional pressures from regulatory bodies (such as government, professional bodies, etc…), organizations (NGOs, media etc…) and society in general. The literature gap that we addressed in this research can be summarized as follows: First, despite the plethora of studies that have addressed the effects of corporate social responsibility on innovation, few studies have analyzed the effects of corporate social responsibility on the competitiveness in the case of SMEs. Furthermore, although the recent research on corporate social responsibility has analyzed its impact on competitiveness in general (Herrera et al., 2015, Marin et al., 2017), there is no research which has analyzed the mediating effects of responsible innovation in the corporate social responsibility-based

competitiveness model by distinguishing its different dimensions. Finally, the majority of research (Marin et al., 2017, Bocquet et al., 2017, and Zhao et al., 2019) analyzed the indirect effects of corporate social responsibility on competitiveness in the case developed countries, and little research focused on the corporate social responsibility-based competitiveness model in the case of developing countries (such as Al-Shuaibi, 2016 and Anser et al., 2018). In the light of this literature gap, our contributions are summarized as follows: First, we analyzed the mediating effects of the responsible innovation in the relationship between the corporate social responsibility and the competitiveness in the case of the developing countries which are North African countries. Secondly, we proposed a fine study of the mediating role of responsible innovation by examining the mediating effects of its different dimensions in the corporate social responsibility-based competitiveness. Finally, we have proposed a conceptual model of corporate social responsibility-based competitiveness in the case of North African SMEs. In this regard, SMEs represent 90% of the Tunisian industrial fabric and constitute the main animator of the national economy by contributing to the creation of about 65% of the jobs and 2/3 of the economic activities of the country. Morocco's private sector is made up of about 98% of SMEs, which account for almost 40% of the gross domestic product (GDP). In Egypt, 99% of non-agriculture private sector projects are SMEs. The latter, contribute 75% of total employment and their production volume represents about 80% of GDP, of which 75% is destined for export. In Algeria, SMEs have created about two and a half million jobs in 2017. In our paper, the focus on SMEs is also justified by the fact that their activities account for about 60% of carbon dioxide emissions (Revell and Blackburn, 2007) and contribute 70 percent of global pollution (Aragon et al., 2008). That is why SMEs can take advantage of the market related to the clean tech sector for developing countries in the future vision of the business world. Despite the importance of the role played by SMEs in North African countries, particularly in the socioeconomic aspect, those countries are far behind developed countries in terms of environmental and social wellbeing. According to some international bodies such as Sustainable Society Foundation, Morocco, Tunisia, Egypt and Algeria have occupied delayed positions at the level of environmental wellbeing. According to the same ranking, these countries are largely lagging behind the bulk of the developed countries and even several developing countries with respect to social wellbeing. One of the

biggest shortcomings facing the countries of North Africa and justifying this positioning is that they have not yet appreciated how best to encourage responsible innovation among SMEs leading to better corporate social responsibility outcomes and thereby boost their competitiveness. That is why, as part of this research, the questions we will try to answer are: Is corporate social responsibility a source of responsible innovation and competitiveness of North African SMEs? What are the mediating effects of responsible innovation and its dimensions in the relationship between corporate social responsibility, environmental management and competitiveness? Our paper is structured in this way: Firstly, we formulate the central hypotheses of our research. Secondly, we present the relationship between responsible innovation and corporate social responsibilitybased competitiveness of SMEs. Then, we analyze our estimates and we discuss the results obtained. Finally, we present the main implications of our research, limitations and recommendations for future research.

2. Hypotheses 2.1. Effects of CSR on competitiveness The previous literature has recently seized the relationship between sustainable development and, more specifically, corporate social responsibility and innovation, with particular emphasis on the role played by sustainable development in business as a source of innovation (Klewitz & Hansen, 2014). Van Marrewijk (2003) proposed a definition of corporate social responsibility (CSR) by arguing that: "In general, corporate sustainability and CSR refer to company activities – voluntary by definition – demonstrating the inclusion of social and environmental concerns in business operations and in interactions with stakeholders". According to this author, the practices of CSR concern five dimensions which are: Voluntariness, stakeholder, social, environmental and economic. Moreover, the form of the relationship between CSR and responsible innovation has not been resolved by the literature. Indeed, several studies have shown that the profitability is negatively affected by higher production costs linked to responsible commitments related to the environment (Klassen & McLaughlin 1996; Russo & Fouts 1997)

especially for small and medium-sized enterprises and therefore, these companies lack funding for responsible innovation. SMEs are differently defined by country. The size, the number of full-time employees and the turnover are the main criteria for distinguishing SMEs from large firms. Thus, there is no conventional definition of SMEs because it is difficult to establish a universal definition (Scheers, 2011). Given the volatility of the national currency values of North African countries, we chose to retain the number of employees and eliminated the criteria relating to the turnover. Moreover, the criterion of the number of employees differs on the international scale. This is why we have avoided these inconsistencies by defining SMEs in their national context as having employment ranging from 10 and 200 employees. Vollebergh and Kemfert (2005) showed that taking into account the effects of company-specific activities on society that require the implementation of new innovative production processes or new product designs. The same idea is supported and argued by Jaffe and Palmer (1997) by showing the positive effects of environmental management on innovative activities in specific sectors. These authors lead to a positive and significant correlation between compliance costs and investments in R & D. Later, the results of Klaassen et al. (2005) showed the importance of government support of innovation in the specific case of wind farms in Denmark, Germany and the United Kingdom. Several studies have linked the responsible innovation through the environmental management to the manager's values and beliefs. In this respect, Von Schomberg (2013, pp. 51-74) defined responsible research and innovation as: "a transparent, interactive process by which societal actors and innovators become mutually responsive to each other with a view on the (ethical) acceptability, sustainability and societal desirability of the innovation process and its marketable products (in order to allow a proper embedding of scientific and technological advances in our society)". According to Laguir et al. (2013), CSR strategies are the expression of a form of strategic choice or strategic leadership of the manager. The willingness of the manager to position himself on CSR can also be translated into a search for leadership on the environment leading to the adoption of responsible innovation while the company is not subject to strong pressure. All of this research is, therefore, concerned with the influence of the individual characteristics of managers and emphasizes the role played by strategic intent in the adoption of responsible innovation. From a resource-based point of view, the results of Halme and Korpela (2013) showed that resource-poor

SMEs can compensate for this lack by engaging in active R & D cooperation with consumers or other relevant stakeholders. However, their analysis remains restrictive as it is limited to the necessary resources and neglects other institutional and ethical factors specific to the manager. The analytical framework developed makes it possible to establish a strong relationship between the CSR strategic profile, environmental management and responsible innovation. H.1: The CSR shows a positive and direct relationship with the competitiveness of SMEs.

2.2. Mediating role of responsible innovation between CSR and competitiveness Starting from the idea that the CSR strategy is a product differentiation strategy, many advantages can be highlighted from the effects of CSR on the competitiveness of SMEs. According to Cruz et al. (2015), several forms of product differentiation, such as those that comply with social standards and are environmentally friendly, can have a positive effect on the market position of developed countries. These authors have shown that this form of product differentiation, in the case of developing countries, is of paramount importance because low-cost benefits may disappear over time in the presence of currency appreciation and rising wage costs. The famous "Porter hypothesis" postulates that environmental constraint generates competitive advantage by stimulating innovation and thus, improving productive efficiency. Porter (1995) also states that strengthening regulatory constraints in some countries stimulates competitiveness of firms and tends to improve the competitive position of less polluting firms in international markets. The search for differentiation in relation to competition or the increase in market shares motivates the adoption of responsible product innovation of SME. Therefore, since SMEs are more exposed to competition, they are more motivated to produce responsible innovation. SMEs not only practice more and more environmental codes, but also integrate working conditions and human rights (Cuerva et al., 2014). These responsible innovations will also improve the image of the SME and boost its market share to secure the existing market. At this level, Galbreath (2010) showed that reactive companies practice little CSR compared to proactive companies. To this end, according to Halila (2007), it is necessary to adopt environmental innovations to facilitate the transition from a reactive strategy to a proactive strategy that is more benign in terms of competitiveness.

On their side, Wei et al. (2017) argued that green CSR refers to a company's efforts to respond to external stakeholders' pressure indirectly influences competitiveness through the legitimacy of firms. Their empirical results supported the argument that SMEs that follow a CSR strategy could establish cooperative relationships with civil society and government, which also leads to the provision of knowledge, innovation production and hence, boosting competitiveness. The different requirements of external stakeholders encourage SMEs to produce responsible innovations. In fact, in developing countries, SMEs are more subject to government pressure given that they are the main driver of economic activity and social welfare. However, given the lack of governance and the participation of civil society in decision-making, especially in the developing country, these SMEs are less constrained by NGOs, media, social minorities and other entities of the community. Accordingly, the following hypothesis can be formulated: H.2: The CSR towards external stakeholders is positively associated with the competitiveness of SMEs via responsible innovation. According to Kuratko et al. (2015), the production of innovations is stimulated by articulations between several factors which include environmental setting. This idea is supported later by Anna et al. (2017), who have shown that companies are required to capitalize and oversee their internal capabilities to ensure the proper exchange of information about them and to offer alternatives when resolving conflicts with stakeholders. In the absence of information and in-depth knowledge of its status and internal capacities, the concessions to stakeholders are debatable. The identification and evaluation of external parameters allow companies to analyze how their stakeholders are ranked in order of priority and how their interests and claims can be prioritized. Since SMEs are, for lack of size, rarely quoted on the stock market, they are not subject to shareholder pressure, but rather to internal pressures exerted by employees, the bilateral and frequent relationships between the manager and the workers facilitate the agreement between them compared to the big firms which make the workers participate in the decision-making and thus, their strong inclusion in the conception of responsible innovation. Moreover, SMEs have a reactive profile of CSR compared to large firms. The latter would follow a multi-stakeholder approach and a more strategic profile, while SMEs would focus on local and internal stakeholders, such as employees and (Murillo & Lozano, 2006).

In other words, SMEs are less likely to "open up" their responsible innovation process to internal stakeholders than large companies, but more constrained to meet customer requirements and thus, to streamline their anticipations of market expectations. Responsible innovation in SMEs is, therefore, aligned with a closed innovation model based on the employee and customers' requirements. Based on these ideas, we aim to validate the following axial hypothesis: H.3: The CSR towards internal stakeholders is positively associated with the competitiveness of SMEs via responsible innovation. According to Sarkar (2008), it is essential to move from an environmental management to consider it as a strategic direction. Regarding the preventive approach, it emphasizes the benefits of responsive CSR. For this purpose, the study carried out by Ning et al. (2017) on a set of Chinese listed companies during the period 2008-2014 showed that responsive CSR acts positively on eco-friendly product innovation. This research can be compared to institutional theories which consider that in response to the expectations of its institutional environment, the SME introduces socially responsible projects. In fact, responsive CSR is meant to stimulate the development of new products as a way to prevent pollution through progressive learning. In this sense, an environmental management policy reduces the risk of environmental damage and the recovery of efficiency through a better reputation gained in favor of companies and in respect of institutional constraints (Groza et al. 2011). Institutional pressures favor the creation of new technology in particular fields. As a result, SMEs are required to respond by following incremental and exploitative learning and innovation routines. This frequently leads to the imitation or benchmark of incremental innovation in pollution prevention according to competitors in the same sector. But this preventive approach assumes that companies must accept the new market structure in which superiority is given to government regulations and the immediate concerns of consumers (Jansson et al., 2017). This new trend also requires the monitoring of an evolving social and regulatory framework as well as the implementation of the innovation strategy and thus, the allocation of the resources needed to make it a success. In the light of these ideas, we will try to validate the following central hypothesis: H.4: Responsible innovation plays a mediating role in the relationship between environmental management and the competitiveness of SMEs.

The model presented in Figure 1 recapitulates our hypotheses and the mediating effects of responsible innovation and its dimensions in the relationship between CSR and the competitiveness of SMEs. Figure 1: Conceptual model of the relationship between CSR and competitiveness of SMEs Responsible innovation Inclusion

Anticipation

Responsiveness

Reflexivity

CSR towards internal stakeholders

H.3 H.1

CSR towards external stakeholders H.2 Environmental management

Competitiveness of SMEs

H.4

3. Research Methodology 3.1. Data collection Our data were collected through a questionnaire addressed to the North African SMEs established in the following 4 countries: Morocco, Algeria, Tunisia and Egypt. Given the social instability for several years that characterizes Libya, we chose to eliminate this country from our sample. The choice of these countries is also justified by the predominance and the SMEs in their economic activity. To fill in the questionnaire, we based on a digital version sent to the managers of these SMEs, and in some cases, it was filed following a face-to-face contact with the managers. Following a process of filtering missing responses and omitting aberrant responses, many SMEs have been excluded from our population of 150 SMEs and our sample is made up of 131 SMEs from North Africa. In total, our sample consists of 56 Tunisian SMEs, 36 Moroccan SMEs, 25 Algerian SMEs and 14 Egyptian SMEs. The data processing was done using the SPSS 23 to conduct our exploratory

analysis and to test the presence of instantaneous indirect effects of each of the main dimensions of responsible innovation in this model.

3.2. Measuring variables 3.2.1. Competitiveness In order to explore the relationship between CSR towards internal and external stakeholders, environmental management and competitiveness, we opted for product differentiation as non-price indicators of the competitive advantages of SMEs in our sample. We followed the global approach of Li (2011) which showed that competitiveness includes 4 dimensions that are competitors, competing objects, competitive capability, and competed results. In our case, four items were used to assess these dimensions of SME competitiveness which were: " Are you in a position to attract customers to the benefit of your products by improving their brand image and their own characteristics?"; "Do you encourage consumers to buy goods by offering them specific services compared to your competing companies"; "Have competitive pressures decreased as a result of the specificities of the product compared to the various products on the market?"; "Do you have a great communication policy?". These items are measured by a scale of five-point Likert ranging from “1 = Not at all important”; "2 = Quite unimportant"; "3 = Somewhat unimportant"; "4 = Quite important"; to “5 = Extremely important”.

3.2.2. Responsible innovation To measure the variable relating to responsible innovation (RI), we followed the approach of Stilgoe et al. (2013) by focusing on the four dimensions advocated by their research which are: Inclusion, anticipation, responsiveness and reflexivity. Table 1 presents the main dimensions of responsible innovation as well as their respective items retained by the literature. In our paper, these dimensions were respectively formulated by the following questions: " Do you engage the different stakeholders in the innovation process?"; "Do you take into account the current dynamics in the process of innovation for the design of the future?"; "Are you able to identify potential risks and react accordingly?"; "To what extent do you integrate the values and beliefs of the public into your research and development activities?". The coding of the items related to the RI was made following

responses from "Not at all"; "Rarely"; "Often"; to "Always". In other words, the items related to inclusion, anticipation, responsiveness and reflexivity were measured by a scale of four-point Likert ranging from “1” to “4.” Table 1: Taxonomy of dimensions of responsible innovation, according to the literature Dimensions Items Authors Inclusion Stilgoe et al. (2013); Stahl et al., (2014); • Engaging different stakeholders (i.e. public participation) from the start-up stage of responsible Bozeman et al., (2015) innovation Anticipation • Better understanding of the opportunities that can Robinson, (2009); Borup et al., (2006); Selin (2011); Stilgoe et al. (2013) shape the technological future Responsiveness • The risks of increasing the probability of occurrence of Schaper-Rinkel, (2013); Stilgoe et al. an event by the magnitude of the cost of the event that (2013) new technologies can cause; • The degree of transparency and accessibility to research and innovation results Prevention • Highly technical proceedings, such as the production of Stilgoe et al. (2013) new equipment, the refinement of processes or the use of low-emission means of production.

In addition, we used the same scale of four-point Likert to measure each of the items related to CSR with respect to different stakeholders and environmental management.

3.2.3. Environmental management In our research, environmental management (EM) is included as a part of CSR alongside the CSR towards internal and external stakeholders. The construction of the variable relating to EM consisted of 5 items. In our case, the choice of activities specific to EM is based on certain monetary aspects, while others on the physical aspects, as proposed by Burritt et al. (2002). To this end, we asked respondents to indicate the company's commitments for the following actions over the last three years, based on a 4point Likert scale ranging from "always" to "not". The 5 items included in our analysis are: i/ Following a clear and continual policy of recycling and conservation of resources; ii/Taking steps for landscaping; iii/Following compensatory measures for the restoration of damaged resources; iv/Monetarily compensating the people affected by your activities; and

v/Preparing off-site programs to improve some other aspects of the quality of life and environment for the community.

3.2.4. CSR towards internal and external stakeholders We have retained employees as the sole internal stakeholder in CSR (Murillo & Lozano, 2006) for North African SMEs. As we focused in this research only on SMEs, we evacuated shareholders as an internal stakeholder in CSR. Hence, our sample does not include publicly traded companies. While external stakeholders include consumers, suppliers, civil society and government (Halme and Korpela, 2013). In total, we selected 9 items for the variable relating to CSR towards internal stakeholders (CSRI) and 7 items for the variable relating to CSR towards external stakeholders (CSRX). These items are presented in detail in table 3.

4. Empirical research 4.1. Descriptive statistics In order to avoid selection bias, the sample consists of SMEs drawn from different manufacturing sectors including agro-foods industries, chemical industries, textile and clothing industries, and leather and footwear industries. In order to ensure a certain representativeness of the sample, our population is heterogeneous, regrouping several categories of SMEs namely those that have chosen only CSR towards stakeholders, those that have opted for EM, and a final those that have opted for CSR towards stakeholders and EM at once. Our sample was made up of 131 companies randomly selected from SMEs with a number of employees between 10 and 200. The SMEs studied differ categorically, in view of the embryonic state of CSR with respect to the environment compared to CSR with respect to the stakeholders in most North African countries. In Table 2, we have grouped SMEs, according to the extent of the responsible innovation. We used the mean of the responsible innovation (which is equal to 8.511) in order to distinguish between more socially innovative SMEs and less socially innovative SMEs. From Table 2, our sample is made up of 63 less socially innovative and 68 more socially innovative SMEs. The most socially innovative SMEs are

from Egypt and Morocco with respective shares of 57.1% and 58.3% of the total SMEs from these countries. In contrast, the largest shares of SMEs from Tunisia and Algeria are less socially innovative SMEs (which represent 60.7% and 52% of the total number of SMEs from these countries, respectively). Table 2: Distribution of North African SMEs in sample according to their responsible innovation Country of Total SMEs by Less socially innovative SMEs More socially innovative SMEs origin country of origin Number Percentage Number Percentage Algeria Egypt Morocco Tunisia Total SMEs

25 14 36 56 131

13 6 15 34

52.0 42.9 41.7 60.7

12 8 21 22

68

48.0 57.1 58.3 39.3 63

Table 3 presents the descriptive statistics of the key variables. It appears from the data presented in this table that, in overall, the mean and the median of the CSRI had variables that were largely exceeded those of the CSRX and EM. This result reflects the attention granted by North African SMEs to employees compared to the other forms of social responsibility. As expected, CSR towards stakeholders and EM were significantly and positively correlated with RI. According to Pearson's correlation, the coefficients of the variables CSRI, CSRX and EM in relation to the variable RI, were statistically satisfactory and represented respectively 0.517, 0.425 and 0.314. These results may present an insight into our basic theoretical position: RI can play mediating role in the relationship between CSR towards stakeholders, EM and competitiveness. Table 3: Summary statistics Variables CSRI CSRX EM RI COMP N Mean SD Min Max Median Note: Significant; *** p < 0.01.

CSRI 1 0.553*** 0.475*** 0.517*** 0.534*** 131 20.752 3.946 11.902 26.976 20.273

CSRX 1 0.125 0.425*** 0.456*** 131 17.118 2.488 10.016 20.032 17.942

EM

RI

1 0.314*** 0.452*** 131 11.333 3.306 4.168 16.672 16.658

1 0.679*** 131 8.511 1.399 5.078 10.156 8.497

COMP

1 131 14.144 2.540 6.052 17.220 13.852

4.2. Reliability, convergent and discriminant validity In order to verify the problem of the common method variance, we applied the Harmann singlefactor test. By downloading the 28 items selected in our research, the principal component analysis (PCA) shows that about 34% of the variance was extracted, which is less than 50%. This result reveals that the problem of the common method variance does not arise in our data set. Regarding the validity of the constructs and the adequacy of the sampling of the individual variables, we applied the Bartlett's test of Sphericity test and the Kaiser Mayer Olkin (KMO) test. Our results indicate a KMO value of 0.782 which is greater than 0.6. In other words, the KMO is significant as well as Bartlett's test of sphericity. Thus, these last results show that it is possible to carry out factor analysis. Table 4: Constructs and measures Variables and items CSR towards internal stakeholders Rewarding wages and salaries. Upgrade opportunities are available and good. Training and continuous development of human capital. Functional justice. Healthy and appropriate working conditions. Participation in decisions. Paid holidays. Housing and various other services for employees. Transparency in work and reduction of negative informal contacts. CSR towards external stakeholders Products with good quality. Declaration honest and faithful. Safe products when used. Positive active participation in emergencies and natural disasters such as earthquake relief, floods, civil wars, fire and political unrest. Honesty to deal with and provide the local community, technical and cultural organizations and be transparent in dealing with the community when the problems that the organization is a party. Enhancing the reputation of the state and the government in dealing with foreign affairs and not getting involved in any activity contrary to international laws. Payment of tax liabilities, fees and non-tax evasion and the following is certified in dealing with the competent government agencies. Environmental management Following a clear and continual policy of recycling and conservation of resources. Taking steps for landscaping. Following compensatory measures for the restoration of damaged resources. Monetarily compensating the people affected by your activities. Preparing off-site programs to improve some other aspects of the quality of life and environment for the community. Responsible innovation

Contribution 0.761 0.762 0.751 0.739 0.751 0.783 0.836 0.673 0.688

Alpha of Cronbach

0.901

AVE

0.504

0.731 0.684 0.718 0.766 0.736

0.780

0.513

0.733 0.640

0.855 0.734 0.916 0.817 0.846

0.709

0.698

Engagement of different stakeholders in the innovation process. Taking into account the current dynamics in the process of innovation for the design of the future. The capacity to identify potential risks and react accordingly. KMO Baretett's test

0.830 0.880

0.712

0.716

0.829 Aproxi. Chi square df Sig.

0.783 2580.205 378 0.000

To test the validity and reliability of the items related to the key variables, we based on the study of the coefficient of Cronbach and the one-dimensional character of the scales on the basis of the PCA. For this purpose, with reference to the Cronbach coefficient, we chose the value of 0.6 as the minimum significance threshold to accept the internal coherence of the items. The choice of this threshold seems adequate to the size of our sample in accordance with the choices of Moss et al. (1998) and Hair et al. (2006). Moreover, we resorted to the value 0.5 to eliminate items with factor contributions equal to or lower than this threshold. Table 4 shows the Cronbach coefficients that exceeded the acceptance threshold set in our study, thus reflecting the reliability of the items selected, which gives us satisfactory results. As shown in this table, three of the four proposed items reflect dimensions of RI according to PCA which are inclusion, anticipation and responsiveness. The PCA shows that reflexivity items have no meaningful contributions to RI and therefore, will be excluded from our subsequent empirical analysis. As a result, RI is measured by the three items related to inclusion, anticipation and responsiveness that are weighted by their factor contributions presented in Table 4. Moreover, the factor analysis carried out on the items specific to the main elements of the EM showed that the factorial axis is essentially represented by the items relating to "Following a clear and continual policy of recycling and conservation of resources", "Taking steps for landscaping", "Following compensatory measures for the restoration of damaged resources", "Monetarily compensating the people affected by activities of company", "Preparing off-site programs to improve some other aspects of the quality of life and environment for the community". Indeed, these items present respectively factorial weights of 0.855, 0.734, 0.916, 0.817 and 0.846. The PCA also showed that the best items which constitute the best components of the CSRI are "Rewarding wages and salaries", "Upgrade opportunities are available and good", "Training and

continuous development of human capital", "Functional justice", "Healthy and appropriate working conditions", "Participation in decisions", "Paid holidays", "Housing and various other services for employees", "Transparency in the work and reduction of negative informal contacts". From the list of 24 items of CSRX, only 7 items were retained to measure this variable. In addition, to verify the convergent and discriminant validity we are based on the average variance extracted (AVE). Table 4 shows that for each of the key variables relating to the CSRX, CSRX, EM and RI, the AVE is between 0.504 and 0.716 and therefore, greater than the threshold of 0.5. This result reflects the convergent and discriminant validity for the selected elements in our analysis.

4.3. Results and discussion In the following, our aim was to highlight the role played by CSR towards internal and external stakeholders and EM in determining competitiveness based on product differentiation. To measure multicollinearity and avoid the problem of common variance bias, we examined the variance inflation factor (VIF) for latent variables. This test measures the increase in the variance of an estimated regression coefficient when the predictors used are correlated. As advocated by Kock and Lynn (2012), we retained the value of 3.3 as a threshold of acceptance or not of the common variance bias. Therefore, in the case where the VIF is strictly greater than 3.3, the regression coefficients are not well estimated. Our results in Table 5 indicate VIF values below 3.3 for all key variables of our model, reflecting the absence of multicollinearity problem between these variables. Table 5: Regression Analysis Results: Mediating effects of responsible innovation between CSR towards stakeholders, environmental management and competitiveness Variable

Responsible innovation Model 1 Model 2 Model 3

Competitiveness Direct effect Indirect effect Model 4

Coefficient (VIF) CSRI

CSRX EM

Model 5

Model 6

Coefficient VIF)

0.180*** (1.05)

0.143*** (1.41) 0.230*** (1.06)

0.177**

0.179** (1.27) 0.125*** (1.13)

0.242* 0.176*** (1.22)

0.133**

Country

0.079ns (1.17)

0.089ns (1.18)

0.093ns (1.25)

0.365** (1.17)

0.359** (1.19)

Sector

-0.035ns (1.14)

0.050ns (1.12)

-0.010ns (1.17)

0.290ns (1.12) 1.054*** (1.23)

4.672ns 0.522 15.866*** 131

4.280*** 0.429 9.573*** 131

6.921*** 0.322 4.895*** 131

0.228ns (1.14) 0.980*** (1.37) 1.614ns 0.725 35.050*** 131

RI Constant R2 F N. Obs.

0.718 33.587*** 131

0.275* (1.25) 0.176ns (1.17) 1.068*** (1.12) 2.122*** 0.731 36.222*** 131

131

Notes: ns: not significant; * p < 0.1; ** p < 0.05; *** p < 0.01.

The statistical results showed very satisfactory correlations for models 4, 5 and 6 (the adjustment coefficients were 0.725, 0.718 and 0.731, respectively). Moreover, the estimates of the quality of the fit of these models give values of F significant at the 1 percent level. This quality obtained by the multiple regressions was therefore significant. The contributions of the explanatory variables showed strong values of the Beta coefficient for CSR towards shareholders in models 4 and 5. The Student test considers that these explanatory variables contributed positively and significantly to the explanation and prediction of SME competitiveness. Therefore, the hypothesis H.1 was confirmed which supports the results of Graafland (2018) indicating that CSR towards stakeholders generates new and competitive resources in general, and the reputation capital especially for SMEs. According to Table 5, in model 4, the CSRI variable has a significant and positive effect on the competitiveness of SMEs (Beta = 0.143). The indirect effect of the CSRI on competitiveness remained positive and significant (Beta = 0.177), but with a coefficient superior than the direct effect of model 4. In other words, there was a full mediation of the RI variable in the relationship between CSRI and the competitiveness of SMEs. This result confirmed the hypothesis H.3. Our results also showed, through model 5, a statistically significant and positive effect of the CSRX on competitiveness. Moreover, the indirect effect of CSRX on competitiveness was positive and significant, and that has exceeded its direct effect, as shown by the estimate of the model 5. These results allowed us to conclude that the multiple regressions confirmed the validity of the hypothesis H.2 according to which RI plays a full mediation role in the relationship between CSRX and SME competitiveness. The estimates of models 6 showed by table 4 also allowed us to conclude the presence of a partial mediation of RI between EM and SME competitiveness. Indeed, the indirect effect of EM on

competitiveness was lower than its direct effect. These results partially confirmed the validity of the hypothesis H.4. Furthermore, we try to test the mediating role of each of the dimensions of RI in the relationship between CSR towards stakeholders, EM and competitiveness of SMEs. This step constitutes the main contribution of this research given that the literature on responsible innovation-based competitiveness and CSR-based performance did not provide an in-depth analysis of the mediation of the key elements of RI between CSR dimensions and competitiveness. In the following, all the process analyzes described below had been estimated with the PROCESS macro (Hayes, 2015) in SPSS 23.0. The presence of a CI above zero reflects a significant positive indirect effect. We calculated 95% boosted CI for 5000 bootstrap samples. In our case, the bootstrap test was based on the 95% confidence intervals of the empirical distribution of indirect effects estimates. In practical terms, if the confidence interval does not include 0, the indirect effects of the dimensions of RI are significant and the mediation is validated. Otherwise, the mediation is rejected. In particular, we try to test the mediating effects of RI dimensions relating to inclusion, anticipation and responsiveness in the relationship between CSR towards stakeholders, EM and competitiveness. The next step is to determine the significance of instantaneous indirect effects of inclusion, anticipation and responsiveness in our RI-based competitiveness model in the case of North African SMEs and using the normal distribution. We also used bias-corrected bootstrap confidence intervals for these indirect effects. Table 6: Indirect effects test of variables inclusion, anticipation and responsiveness Variable CSRI Inclusion Competitiveness CSRI Anticipation Competitiveness CSRI Responsiveness Competitiveness CSRX Inclusion Competitiveness CSRX Anticipation Competitiveness CSRX Responsiveness Competitiveness EM Inclusion Competitiveness EM Anticipation competitiveness EM Responsiveness Competitiveness Bootstrap samples N. Obs.

Β 0.184 0.098 0.092 0.236 0.159 0.124 0.122 0.089 0.079

Lower CI 0.121 0.043 0.045 0.128 0.080 0.152 0.047 0.026 0.012 5000 131

Upper CI 0.255 0.158 0.151 0.359 0.254 0.444 0.200 0.162 0.172

As shown in Table 6, the multiple mediation analysis revealed significant indirect effects of CSRI, CSRX and EM on the competitiveness of SMEs via inclusion (β = 0.184., 95% CI [0.121, 0.255]; β = 0.236., 95% CI [0.128, 0.359]; and β = 0.122., 95% CI [0.047, 0.200], respectively). Figure 2: Summary model of the relationship between CSR towards stakeholders, environmental management and competitiveness 0.133*** 0.242*** 0.177***

RI

Inclusion

Anticipation

Responsiveness

CSRI 1 0.980*** 1.054*** 1.068***

CSRI 2 CSRI 3 CSRI 4 CSRI 5

CSRI

CSRI 6

COMP 1 0.143***

CSRI 7

COMP

CSRI 8

COMP 3 0.179***

CSRI 9 CSRX 1 CSRX 2 CSRX 3 CSRX 4 CSRX 5 CSRX 6 CSRX 7 EM 1 EM 2 EM3 EM 4 EM 5

COMP 2

COMP 4

0.176*** CSRX

EM

RI: Responsible innovation CSRI: CSR towards internal stakeholders CSRX: CSR towards external stakeholders EM: Environmental management COMP: Competitiveness Direct effect Indirect effect

Moreover, we observed another significant indirect pathway from CSRI and CSRX through anticipation and responsiveness to the competitiveness of SMEs (β = 0.098, 95% CI [0.043, 0.158]; β = 0.159, 95% CI [0.080, 0.254]; β = 0.092, 95% CI [0.045, 0.151] and β = 0.124, 95% CI [0.152, 0.444], respectively). The indirect effects of the RI dimensions relating to anticipation and responsiveness between EM and competitiveness of SME were significant (β = 0.089., 95% CI [0.026, 0.162 and β = 0.079, 95% CI [0.012, 0.172]. We noted that the lower and upper limits of the confidence intervals in the case of the indirect effects of inclusion, anticipation and responsiveness in the relationship between CSRI,

CSRX, EM and competitiveness do not integrate the value zero. The set of relationships between the key variables of the CSR-based competitiveness model are summarized in Figure 2.

5. Conclusion We have shown through this research that the competitiveness of SMEs in North Africa was highly dependent and significantly conditioned by the CSR approach and the environmental protection policy. These effects were partly transmitted through RI. Our results also showed that the dimensions of CSR which are CSR towards stakeholders and environmental management had a different significant appreciation depending on the three dimensions of RI which were the inclusion of stakeholders in the innovation process, the anticipative approach to the future impacts of innovation in project design, and the ability to identify potential risks and react accordingly. In this regard, RI had a mediating effect in the CSR-based competitiveness model. This effect was conveyed through the mediating effects of inclusion, anticipation and responsiveness. The reflexivity did not present a sufficient factor contribution in the design of the RI and therefore, was not taken into account in the analysis of the mediation. Our results also showed that the indirect effects of CSR towards stakeholders, whether internal or external on the competitiveness of SMEs were facilitated by inclusion, anticipation and responsiveness. In other words, the full mediation of RI is fostered by these three dimensions of RI. Similarly, the partial mediation of RI in the relationship between EM and the competitiveness of SMEs in North Africa was realized only through the inclusion of stakeholders, the anticipation and the responsiveness.

6. Implications for theory and practice on cleaner production and sustainability Previous literature has proposed models of mediation and moderation to analyze the effects of CSR on financial performance (Wang and Sarkis, 2017), but the indirect effects of CSR on competitiveness remain not yet sufficiently studied. Given the scarcity of existing studies dealing with deeply relevant issues, this paper broadens our understanding of RI by revealing the mediating effects of its key elements in the relationship between CSR, EM, and competitiveness in the case of North African SMEs.

Furthermore, our focus on SMEs is explained by their capacity to boost economic performance by exploiting future green market opportunities. Moreover, it is particularly SMEs, because of their characteristics and management style that are more sensitive and easily influenced by the personal ethics of leader in the adoption of sustainable strategies (Kearins et al., 2010). In other words, the originality of our research lies in the proposal of a conceptual CSR-based competitiveness model for SMEs by testing the mediating effects of RI dimensions in the relationship between the dimensions of CSR and the competitiveness. We consider that our investigation can serve future research and the development of a RI-based competitiveness model, for the correct implementation of CSR and EM in the case of SMEs, which can lead to the generation of social sustainable projects. Indeed, our research incorporates a new methodology in analyzing the role of CSR in achieving competitiveness of SMEs. We have tried to identify the mediating effects of RI by studying the instantaneous indirect effects of CSR and EM on the competitiveness of SMEs through the main dimensions of RI. Our research attempts to analyze not only the differential effectiveness of different types of CSR initiatives which are internal and external (see Pin et al., 2016, and Amatulli et al., 2018), but also the manner in which these CSR initiatives are materialized by greater competitiveness through the different dimensions of RI. In this research, we have shown that these CSR initiatives are conditioned by the stakeholder in question and the dimension of RI. To this end, our study is more advanced than some research that reports RI either to CSR towards stakeholders (Jamali & Caroll., 2017) or to the CSR towards the environment (Chang, 2016). In addition, no study has analyzed empirically the role played by CSR and EM in the RI-based competitiveness by integrating the mediating effects of each of RI dimensions in general, and the inclusion, the anticipation, and the responsiveness in particular. In this regard, our model proposed a lightening of the role played by RI in the models of sustainability by integrating both the dimensions of RI and the SME's commitments towards stakeholders and the environment. On the managerial side, we showed in this research that the CSR generated a social value through RI and contributed to the competitiveness of SMEs, because they were focused on solving a rising need, that was not attended by traditional markets and that benefited a specific community, propitiating that

societies advanced and developed. Indeed, CSR can create competitive advantages in developing countries by focusing on CSR and this is dependent on the dimension of RI. Competitiveness of SMEs is stimulated by CSR towards internal and external stakeholders and EM through their effects on RI. Moreover, these mediating effects are transmitted through the engagement of different stakeholders in the innovation process, taking into account the current dynamics in the process of innovation for the design of the future, and the ability to identify and react to potential risks. In other words, inclusion, anticipation and responsiveness for North African SMEs are seen as an essential lever for successful CSR approaches and fostering competitive positions.

7. Limitations and recommendations for future research Our study has some limitations which can represent interesting avenues for future research. First, in this study sectoral specificities were not taken into account in determining the effects of CSR towards stakeholders and the environment management on competitiveness through responsible innovation. Therefore, the results can be biased according to the sector selected and therefore, raised the problem of common biased method. In our research, this problem is minimized by incorporating into our sample different sectors. Secondly, the results of this study only concern North African SMEs, and may not be valid in other developing countries. Indeed, CSR practices are defined according to the policies adopted by governments, the target markets and the institutional development. Thus, results may not be generalized in all SMEs in developing countries, and a larger sample of SMEs from different developing countries should be selected. Finally, although this study proposed a fine mediation analysis of CSR-based competitiveness, several other moderating factors may occur in this model. The sector of activity and the reputation of SMEs can condition the effects of CSR on responsible innovation and competitiveness. In this respect, it seems appropriate to apply moderated mediation model in order to analyze all the factors involved in the dimension level effects of CSR on dimension level of responsible innovation and competitiveness.

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Highlights

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A model of CSR-based competitiveness for SMEs was developed.

•

The mediating role of responsible innovation in the CSR-based competitiveness model has been tested.

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CSR towards internal and external stakeholders and environmental management have a positive impact on SME competitiveness.

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Responsible innovation plays a mediating role between CSR and SME competitiveness.

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The dimensions of responsible innovation playing this mediating role have been identified.

Author contributions section

Tarek Bel Hadj: Conceptualization, Methodology, Data curation, Investigation, Validation, Writing-Reviewing and editing.

Declaration of interests ☒ The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper. ☐The authors declare the following financial interests/personal relationships which may be considered as potential competing interests: