Politically connected firms and corporate social responsibility implementation expenditure in sub-Saharan Africa: Evidence from Ghana

Abstract

While previous research has emphasized the role of stakeholder pressures, firm‐specific factors, as well as CEO characteristics as important drivers of corporate social responsibility (CSR) implementation, our understanding of how political connections impact small and medium‐sized enterprises' (SMEs') CSR implementation expenditure is quite limited. In this study, we contribute to filling this gap by investigating the effects of political connections and CSR expenditure and explain the conditions that impact this relationship. Using data from 473 SMEs in Ghana, we find that political connections negatively influence CSR implementation expenditure. However, the negative effect is weakened when a firms' reputation and competitive CSR implementation pressures are high. Implications for theory and practice are discussed.