The effect of external corporate social responsibility practice on community wellbeing: Evidence from selected industrial parks in Ethiopia

Abstract

 The ongoing issues of environmental degradation, air pollution, escalating living costs, and the potential for disasters require a collaborative approach from all stakeholders beyond just the government. One effective avenue for this engagement is Corporate Social Responsibility (CSR), particularly through external CSR initiatives, which can play a significant role in addressing critical community challenges. This study aims to identify the best external CSR (eCSR) activities that fit industrial parks (IPs) and their effect on the well-being of the host community in and around the IPs. To this end, the study employed 423 samples and obtained 396 valid responses from employees and community members of three selected IPs through non-probabilistic cluster sampling and simple random sampling, respectively. Data analysis was performed using SPSS-21 and AMOS-23. The results show that business diversification strongly affected the community's livelihood (β=0.341). Likewise, employment opportunities (β=0.133), emergency services (β=0.196), and environmental protection (β=0.145) positively and significantly affect the well-being of host communities inhabiting IPs. However, technology and knowledge transfer (β=-0.198) significantly negatively impacted the community's well-being. Theoretically, this study needs to examine the relationship between eCSR activities and the community well-being of IPs. Furthermore, the practical implication is all about denoting the importance of eCSR practices and frameworks that help company owners perform CSR and improve the community's well-being without compromising their economic dimension.