Nexus between corporate social responsibility and competitive advantage in Vietnamese SMEs: The mediating roles of corporate brand, reputation, and customer loyalty

Abstract

This study aims to investigate the impact of corporate social responsibility (CSR) on competitive advantage in Vietnamese small and medium-sized enterprises (SMEs), with a particular focus on the mediating roles of corporate reputation, corporate brand, and customer loyalty. This study employs a quantitative research design using survey data collected from 137 managers and staff across Vietnamese SMEs. The partial least squares path modeling (PLSPM) method is applied to test the proposed structural model and hypotheses. The findings reveal that CSR does not have a direct significant effect on competitive advantage. Instead, CSR exerts a strong positive indirect effect through corporate reputation. Specifically, CSR significantly enhances corporate reputation, which in turn improves both customer loyalty and competitive advantage. However, the direct effects of CSR on customer loyalty and of corporate brand on customer loyalty are found to be insignificant. These results indicate that reputation serves as the primary strategic mechanism through which CSR creates value for firms. For practical implications, SME managers in emerging markets should prioritize CSR initiatives that are visible, credible, and stakeholder‑oriented to build reputation, rather than relying on CSR or branding alone to drive customer loyalty or competitive advantage. Managers should treat reputation as a strategic asset, communicate CSR transparently, and integrate CSR into broader trust‑building strategies. Given limited resources, SMEs should focus on high‑impact CSR activities that resonate with stakeholders. This study contributes to the literature by demonstrating that CSR enhances competitive advantage indirectly through corporate reputation rather than directly, and it provides actionable insights for leveraging intangible assets to achieve long‑term sustainability.