Technological Forecasting & Social Change xxx (xxxx) xxxx

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Technological Forecasting & Social Change

journal homepage: www.elsevier.com/locate/techfore

Moderating effect of firm size on the influence of corporate social

responsibility in the economic performance of micro-, small- and medium-
sized enterprises
⁎
Sánchez-Infante Hernández Juan Pabloa, Yañez-Araque Benitob, Moreno-García Juanc,
a
University of Castilla-La Mancha, Toledo, Spain
b
Department of Physical Activity and Sports Sciences, University of Castilla-La Mancha, Toledo, Spain
c
Department of Information Systems and Technologies, University of Castilla-La Mancha, Toledo, Spain

A R T I C LE I N FO A B S T R A C T

Keywords: Corporate social responsibility (hereafter, CSR) continues to be generally relevant, with growing interest from
CSR academic researchers, businesspeople, public administrations and society as a whole. Numerous works have
EP studied the influence of CSR on economic performance (hereafter, EP) in large businesses, but very few studies
MSMEs have focused on micro-, small- and medium-sized enterprises (MSMEs). This study analyzes the moderating
Business size
effect of firm size on the influence of CSR actions on the economic performance of MSMEs. This work has two
Moderating effect
PLS-SEM
purposes: first, to empirically test the “social impact” hypothesis of stakeholder theory, which assumes that CRS
positively impacts EP; second, to analyze the moderating effect of the MSME size on this hypothesis. The results
obtained using the PLS-SEM technique based on a sample of 278 Spanish firms confirm that MSMEs that carry
out CSR activities in their economic, social and environmental aspects improve their economic performance, and
this relationship is moderated by the size of these organizations; the larger the size is, the stronger the re-
lationship is.

1. Introduction
Concerns related to economic growth, social cohesion and en-
vironmental awareness are not new issues, but the details of simulta-
neously combining the three objectives are more necessary each day.
The importance of corporate social responsibility (CSR) lies in the new
way of conducting business, comprising voluntarily integrating eco-
nomic, social and environmental concerns in the actions and strategies
of business activity. Importance is placed on the creation of value
through CSR and the determination of the elements that can be quali-
tatively and quantitatively analyzed and considered.
Many works have studied the influence of CSR on economic per-
formance (hereafter, EP) in large businesses, but very few studies have
focused on micro-, small- and medium-sized enterprises (MSMEs). This
study responds to this research gap and proposes several models aimed
to determine the influence of CSR on the EP of MSMEs. In this work, we
analyze the influence of CSR actions on the EP of MSMEs and the
specific moderating effect of MSME size in this relationship. We focus
on MSMEs for two main reasons. First, very few works have analyzed
CSR in micro-, small- and medium-sized enterprises (most studies on
CSR are focused on large businesses, without the possibility to extra-
polate their results for MSMEs). Second, due to the economic and social
importance of MSMEs, 99% of all European businesses are MSMEs (CE,
2017), and 99.8% of businesses in Spain are MSMEs (Central Business
Register, 2017). Thus, the effect of the size on the strength of the re-
lationship between CSR and EP is analyzed.
The purpose of this work is to carry out an in-depth analysis of the
relationship between CSR, represented by its different aspects, and EP,
represented by various economic indicators, particularly seeking causal
relationships and trying to provide recommendations regarding how to
maximize the impact of CSR on the EP of a business. We used the results
obtained from a sample of MSMEs in Spain to address the reasonable
doubt in different academic and business forums regarding whether
CSR is useful for businesses in generating better economic performance
and what role business size plays in this context. The final results
confirm that MSMEs that carry out CSR activities in their economic,

This article belongs to the special section on Changing Organisations and Markets: Knowledge Co-Creation, Business Model Innovation, and Adaptive Management
for Sustainable Development.
⁎
Corresponding author.
E-mail addresses: jpsanchez@movistar.es (S.-I.H. Juan Pablo), Benito.Yanez@uclm.es (Y.-A. Benito), Moreno@uclm.es (M.-G. Juan).

https://doi.org/10.1016/j.techfore.2019.119774
Received 7 June 2019; Received in revised form 7 October 2019; Accepted 9 October 2019
0040-1625/ © 2019 Elsevier Inc. All rights reserved.

Please cite this article as: Sánchez-Infante Hernández Juan Pablo, Yañez-Araque Benito and Moreno-García Juan, Technological Forecasting &
Social Change, https://doi.org/10.1016/j.techfore.2019.119774
S.-I.H. Juan Pablo, et al.
social and environmental aspects improve their economic performance,
and these activities are based on the larger size of these organizations.
As contributions to theory and practice, we anticipate that the results
are simultaneously consistent with the legitimacy theory based on the
resource-dependency approach and presence of the three dimensions in
the CSR model.
This work is structured as follows: after the introduction, the second
section is dedicated to the theoretical framework, conceptual model
and hypothesis, in which a review of the most pertinent aspects of the
relationship between CSR and EP is carried out. This section proposes
different hypotheses that will help us to understand the behavior of this
relationship. In the third section, the methodological part of the work is
elaborated, referring to the materials and methods. The fourth section
presents the results of the research and discusses their significance.
Finally, the most pertinent conclusions and implications for theory and
practice are presented.
2. Theoretical foundations and hypotheses
2.1. Theoretical framework
Both public and private institutions manage material and human
resources to achieve success through systems that they consider ade-
quate, attempting to combine the resources and methods in the best
possible way, with certain intentions. The work of the manager of the
process will, of course, affect the way in which their organization acts;
the environment will also affect the actions of managers and the in-
stitution (Drucker, 1954). The concept of business has substantially
changed in recent times, from being understood as a field for ruthless
men, motivated solely by profit, to being considered an institution that
has a serious moral responsibility toward society. The traditional
business, whose mission is the profit of its owners, exists in constant
conflict with the remaining the elements in the system, namely, the
employees, society, the environment, and so on. A change in the ap-
proach, where different stakeholders are considered, would surely re-
duce the situation of conflict in the business world, and would probably
lead to more balanced economic, social and environmental perfor-
mance. This is the thesis that comprises the institutional philosophy of
CSR (Carroll, 1979).
We begin with the concept that business is not only an economic
organization that operates in the financial sphere of society but also is
inevitably involved, to a certain extent, in social and environmental
spheres. This triple involvement is extended in the purpose, objectives,
processes and results of the business, generating three types of re-
sponsibilities: economic, social and environmental. This relationship is
circular, such that each type has its own intrinsic value, and the busi-
ness has the moral obligation to contribute to the wellbeing of society
and not only to increase economic gain (Freeman, 1984).
The theoretical studies are based on interpreting all possible CSR-EP
relationships, as indicated below, based on the conceptual framework
expressing the nature of this relationship. Gómez (2008) indicates that
the most interesting theoretical framework is designed by Preston and
O'Bannon (1997), which is one of the approaches most widely accepted
by the literature due to its well-defined and rigorous approach to the-
oretically explain the following basic differentiation characteristics.
a) Causal sequence: variable type for CSR (dependent or independent);
b) Sign of a CSR-EP relationship: positive, negative or neutral;
c) Possible CSR-EP synergistic link: CSR-EP two-way relationship.
The potential theoretical relationships are set out in Table 1.
The theoretical framework of Preston and O'Bannon (1997) has
provided the basis for numerous subsequent empirical studies, notable
among which are those of Moore (2001), Simpson and Kohers (2002),
Orlitzky et al. (2003), Allouche and Laroche (2005), Maron (2006),
Van Beurden and Gössling (2008), Makni et al. (2009), and
2
Technological Forecasting & Social Change xxx (xxxx) xxxx
Yang et al. (2010).
Following Preston and O'Bannon (1997) and Gómez (2008), in the
relationships indicated in Table 1, we can identify the following re-
search groups or typologies:
1 For a first group of works, there is a positive relationship between
CSR and EP. This group involves contrasting the hypothesis of the
social impact of CSR on EP. Within this group, we find works such as
those of Freeman (1984), García-Castro et al. (2010), and Martínez-
Campillo et al. (2013).
2 In a second group of works, the influence of EP on CSR is analy-
zed—that is, the availability of funds leading businesses to under-
take CSR activities. The most notable work on this is that of
Waddock and Graves (1997).
3 A third group of works suggests a two-way relationship between
CSR and EP, called CSR positive synergy. The most notable work in
this group is that of Waddock and Graves (1997).
4 The fourth group of works encompasses the trend known as trade-
off—that is, an inverse relationship between CSR and EP. Within this
trend we highlight the works of Friedman (1962, 1970, 2007) and
Boyle et al. (1997), among others.
5 The fifth group, named manager opportunism, is characterized by
the inverse causal sequence. Within this group, we find the works of
Williamson (1967), Ross (1973), and Jensen and Meckling (1976).
6 This group encompasses a series of works revolving around an in-
verse two-way relationship, negative synergy between CSR and EP.
In this group, we highlight the works of Preston and
O'Bannon (1997).
7 Finally, in the seventh group, we highlight works that do not
identify a direct or significant relationship between CSR and EP
because there are many variables that moderate this relationship. In
this group, we note the works of McWilliams and Siegel (2001).
From the above approaches, we can pose the following hypotheses.
Hypothesis 1 (H1). The adoption of CSR measures in all
aspects—social, economic and environmental—has a positive
influence on the EP of the MSME.
This is the approach of the social impact hypothesis, which estab-
lishes that the adoption of CSR measures positively affects the EP of the
business (García-Castro et al., 2010; Miras Rodríguez et al., 2011).
Thus, higher (lower) levels of CSR lead to higher (lower) levels of EP,
(Waddock and Graves, 1997; Orlitzky et al., 2003; De la Cuesta, 2004;
Nieto and Fernández, 2004; Tsoutsoura, 2004; Allouche and
Laroche, 2005; Porter and Kramer, 2006; Herrera et al., 2012).
Likewise, Lerner and Fryxell (1988) maintain that the larger the size
of the business is, the larger its involvement in aspects related to CSR is.
Murphy et al. (1992) also observe better ethical behavior of larger sized
businesses. Pava and Krausz (1996) indirectly measure this aspect,
emphasizing that the companies with greater total assets dedicate
greater efforts to this matter. Vives et al. (2006), Ciliberti et al. (2008),
Husillos and Álvarez-Giil, 2008, Pedersen (2009), Surroca et al. (2010),
and Miras Rodríguez et al. (2011) state that the size of the business
directly and positively affects the use of CSR evaluation instruments.
Niehm et al. (2008) consider the size of the organization as one of the
intrinsic characteristics of each business’ nature, which is suggested to
be significant or moderate in the level of adoption of certain CSR
practices. Work by Udayasankar (2008) indicates the influence of size,
above all, on the recognition of involvement in socially responsible
actions based on the size of the business. Amato and Amato (2007)
observe the same influence regarding economic investment in CSR,
based on the size of the organization. The latter two cases show a linear
relationship; the larger the size is, the greater the involvement and
investment are.
Works such as that of Baumann-Pauly et al. (2013) consider that a
direct relationship exists between the size of the business and greater
S.-I.H. Juan Pablo, et al.
Table 1
Research typologies of the relationship between CSR and EP.
Source: Adapted from Preston and O'Bannon (1997) and Gómez (2008).
Causal sequence Sign of relationship
Positive
CSR –> EP Social Impact Hypothesis
EP –> CSR Availability of Funds Hypothesis
CSR 〈–〉 EP Positive Synergy
involvement and understanding of the full concept of CSR. In particular,
in some studies on CRS in SMEs, size is analyzed as a decisive factor or
decision maker related to the sustainable commitment made; therefore,
it may affect the number of CSR activities carried out by a business
(Preuss and Perschke, 2010), with micro and small sizes usually being
allocated fewer resources to undertake this type of practice, perhaps
due to the lack of systematization of social responsibility in these
businesses.
Wang et al. (2018) find that firm size moderates the effect of sus-
tainable supply chain management practices on economic performance.
Larger companies reveal more CSR information to show their corporate
citizenship, thus legitimizing their existence (Ghazali, 2007); the evi-
dence from previous studies supports the existence of a positive re-
lationship between the size of the company and level of disclosure
(Siregar and Bukit, 2018).
In light of the above, we can pose the following hypothesis:
Hypothesis 2 (H2). Business size moderates the relationship between
CSR and EP.
From these two hypotheses, we can present the following con-
ceptual model (Fig. 1).
3.1. Database
The study was carried out on Spanish MSMEs, with more than 1
employee and fewer than 250 employees. Additionally, the legal forms
of the businesses are private limited companies (Ltd) or public limited
companies (PLC) to ensure the availability of their annual accounts.
With this criteria, based on the Central Business Register (CBR or DIRCE
in Spanish) of the National Statistics Institute (INE in Spanish), in 2017,
820,250 active MSMEs were available. The CSR data were obtained
from sustainability reports that were created under the initiative of the
Official Credit Institute (ICO, a corporate state-owned entity attached to
the Spanish Ministry of Economy and Business). These reports were
created based on the international standards of the Global Reporting
Initiative (GRI), in its G3 version. For the business results data, the
database of the Iberian Balance sheets Analysis System (SABI) was used.
With this information, the final sample comprising 278 MSMEs was
created.
Fig. 1. Conceptual model of CSR.
3
Technological Forecasting & Social Change xxx (xxxx) xxxx
Neutral Negative
Moderating variables hypothesis Trade-off Hypothesis
Manager Opportunism Hypothesis
Negative Synergy
3.2. Measurement of variables
3.2.1. Measurement of EP (dependent variable)
In this work, we have chosen to use economic-financial variables to
measure EP. We consider this type of measure to be more objective and
consistent, if we consider CSR from a strategic point of view and the
sample being analyzed as comprising MSMEs of different sectors. This
type of organization depends more on the allocation of available re-
sources for specific programs or activities than the market's response to
the measures taken by businesses.
These variables have already been used in prior works such as those
of Griffin and Mahon (1997), Waddock and Graves (1997), and
Margolis and Walsh (2003). Specifically, we have used operating in-
comes, financial year results, total assets and own funds. These values
allow us to measure the level of internal efficiency of the business at the
business level.
3.2.2. Measurement of CSR (independent variable)
There are different measurement methods for this variable. Both
Griffin and Mahon (1997) and Margolis and Walsh (2003) demonstrate
how to measure CSR, starting with sustainability indexes, which they
consider to best reflect the responsible performance of the company
regarding its economic-financial results.
Orlitzky et al. (2003) try to measure CSR taking into account three
blocks: (a) measures based on the market—profitability for share-
holders, capital gains on shares and dividends; (b) measures based on
accounting—efficiency of management from an internal point of view;
and (c) measurements based on the perception of managers—carried
out through surveys or interviews, evaluations of the financial situation
and efficiency of the use of assets compared with competition.
In this work, we have opted for the sustainability report evaluation
method based on the Global Reporting Initiative (GRI), which allows
the effects of different indexes and data of a questionnaire to be com-
bined in their Social Report format (Schadewith and Niskala, 2010) and
which also allows comparisons to be made between different busi-
nesses.
We have considered CSR a second-order multidimensional construct
comprising three dimensions: economic, social and environmental. This
construct has come to be known as the ``Triple Bottom Line” (TBL)
S.-I.H. Juan Pablo, et al.
(Elkington, 1997; 2004; Chang and Kuo, 2008) (model used by the
GRI). This triple bottom line contains economic, social and environ-
mental information from the year prior to publication, with a reporting
philosophy based on sustainability understood as three simultaneous
objectives: economic prosperity, environmental quality and social jus-
tice. This type of measure has been used in previous studies such as
those of Bansal (2005), Epstein et al. (2012), Chow and Chen (2012),
and Gallardo-Vázquez et al. (2013).
With a greater level of detail, we can specify the measures used in
each of the dimensions considered in CSR as follows:
1 Economic Dimension. De la Cuesta (2004) and Marín and
Rubio (2008) state that these indicators must offer information on
the economic impact of the company on the community where it
operates. In accordance with the research objectives, the following
elements have been taken into account: personnel expenses, pur-
chasing, monetary donations to the community, taxes paid, reserves
and provisions.
2 Social Dimension. This type of indicator intends to demonstrate the
social concern of the organization for its stakeholders
(Hammann et al., 2009). Four groups of elements have been con-
sidered based on the information provided: general (main markets,
regional, national, and international), social (number of employees
in the organization who are women, foreign, disabled, at risk of
exclusion), training and society (spending on training, nonmonetary
donations to society) and performance (certifications and awards
obtained, stakeholders identified and addressed, channels of dia-
logue of the company, and external initiatives collaborated in).
3 Environmental Dimension. Pérez-Sánchez et al. (2003) maintain
that the values and attitudes of managing owners are decisive in the
adoption of good environmental practices. Revell et al. (2010) state
that, in recent years, there has been a change in an attempt to re-
solve certain environmental problems, and they observe an increase
in the practices of recycling, energy saving and responsible pur-
chasing in the business. Finally, Chavan (2005) and Tomomi (2010)
state that SMEs perceive environmental management to offer op-
portunities for their business activities and as a source of competi-
tive advantage. Within this dimension, in this work, we have used
elements corresponding to energy consumption, use of recycled
materials, recycling of products by the business, and practice of
environmental initiatives.
On the other hand, Khan et al. (2016) affirm that the sustainability
concept is commonly used in many domains. However, the assessment
of reflective and formative measurements has been largely ignored.
There is no consensus on suitable measures for sustainability constructs
in MSMEs (Khan et al., 2012; Shepherd and Patzelt, 2011). In this
study, the CSR second-order composite is reflective, and its first-order
dimensions have formative indicators.
3.2.3. Measurement of the size of the business (moderating variable)
By definition, a moderating effect or an effect of interaction occurs if
the strength of the relationship between a dependent and independent
variable is affected by another independent variable (Hair et al., 1999).
Size has been selected as a moderating variable because, in accordance
with the literature, this factor may have a greater effect on the business
results (Ullman, 1985; Acar, 1993; Wijewardena and Cooray, 1995;
Pelham, 2000; Santos and Gonzalez, 2000; Reid et al., 2000).
The size of the business has been determined considering the cri-
teria established by the European Commission, recommendation 2003/
361/EC of the 6th of May 2003. A business with fewer than 10 em-
ployees, sales under 2 million euros, and assets under 2 million euros is
considered micro. A business with fewer than 50 employees and sales
under 10 million euros or total assets under 10 million euros is con-
sidered small. A business will be considered medium-sized if the
number of employees is greater than 49 and fewer than 250 and its
4
Technological Forecasting & Social Change xxx (xxxx) xxxx
annual turnover is under 50 million euros, or if the total assets are
under 43 million euros.
3.3. Techniques and methods
To achieve the objective of this work, the partial least squares (PLS)
technique was used, which is a method based on variances. PLS is a
second-generation tool for multivariant analysis, suitable for estimating
parameters in complex models. The justification of the selection of PLS
is the exploratory nature of the work. This is a less rigid technique with
regard to minimum requirements of sample size, the nature of the scales
of measurement and the distribution of the indicators of variables ob-
served compared with other methods based on covariances (Fornell and
Bookstein, 1982; Chin et al., 2003).
To calculate the proposed research model, SmartPLS version 3.2.7
M3 software was used (Ringle et al., 2015). Currently, PLS is a well-
established technique to analyze structural equations and has been used
by various researchers of business organization and management
(Fornell and Bookstein, 1982; Gray and Meister, 2004). PLS estimates
the measurement and structural model (Fornell and Bookstein, 1982;
Chin et al., 2003; Bock et al., 2005; Newkirk and Lederer, 2006). The
main purpose of PLS is to predict dependent variables, allowing
quantification of the direct and indirect effects of one variable on an-
other (Barclay et al., 1995).
3.3.1. Evaluation of the size of the sample and technical datasheet of the
study
With the objective of verifying whether the sample is truly re-
presentative of the target population, the main characteristics have
been analyzed. The comparisons made allow the corroboration of the
representativeness of the sample with regard to the universe being
studied. Likewise, the statistical power of the sample was determined
using the G*Power 3.1.9.2 program (Faul et al., 2009). The results
confirm that the sample has adequate statistical power to obtain a value
of 0.8101, which is greater than the threshold established by
Cohen (1988). Table 2 summarizes the technical characteristics of the
study.
4. Results
The results and analyses are presented, taking into account that the
CSR second-order composite is reflective, but its first-order dimensions
(Social, Economic and Environmental Dimensions) have formative in-
dicators. The form selected to construct the superior order model used
latent variable scores or "Two-Step Approach” (Agarwal and
Karahanna, 2000; Chin, 2010). Although the measurement and struc-
tural parameters are estimated in a single step, a PLS model must be
analyzed and interpreted in two steps: analysis of the measurement
model and structural model (Barclay et al., 1995).
Table 2
summarizes the technical characteristics of the study.
Technical datasheet of the study.
Target population of study MSMEs Ltd/PLC with more than 1 employee
(universe) and fewer than 250
Geographic scope Spanish national territory
Analysis unit Business
Population census 820,250
Sample size 278
Information collection method Analysis of Sustainability Reports
Sample error 5.88%
Confidence level 95%; z = =1.96; p = =q == 0.5
Profile of person completing Administrator, partner or owner of the
report business.
Data processing SmartPLS 3.2.7, G*Power 3.1.9.2
S.-I.H. Juan Pablo, et al.
Table 3
Correlation matrix, reliability estimates, convergent and discriminant validity and descriptive statistics.
Measures AVE
1. Corporate Social Responsibility (CSR) 0.6605
2. Economic Performance (EP) 0.7215
4.1. Analysis of the measurement model
The evaluation of the measurement model revealed that, regarding
individual reliability, all loadings of the items (loadings) are greater
than 0.707 (acceptance value recommended by Carmines and
Zeller, 1979). In terms of the reliability of constructs, all composite
reliabilities are greater than 0.8 for all constructs, which is much higher
than the recommended cut-off (greater than 0.8, strict reliability;
greater than 0.7, acceptable reliability). The convergent validity is
evaluated through the average variance extracted (AVE), all constructs
surpassing the recommended value of 0.5 (Fornell and Larcker, 1981).
Additionally, for each of the constructs, the square root of AVE is
greater than the correlations between constructs, and the loadings of
the constructs are higher in their respective constructs than in the re-
mainder (cross-loadings), indicating the discriminant validity of the
measures used. Thus, as reflected in Table 3, it is a good measurement
model (outer model).
Additionally, we calculate the HTMT index for reflective constructs,
allowing the calculation of the discriminant validity between indicators
of the same composite and between indicators of different composites.
To fulfil the discriminant validity, the HTMT ratio values must be less
than 0.90 (Gold et al., 2001). We obtained an HTMT of 0.890.
4.2. Analysis of the structural model
Having validated the measurement model, the relationships be-
tween constructs must be evaluated. To carry out the evaluation of the
structural model using PLS, we considered the values of the path
coefficients or standardized regression weights (β) and the explained
variance (R2). To contrast the hypotheses of our model, we used non-
parametric resampling techniques to examine the stability of estimates
offered by PLS (nonparametric Bootstrap technique). Fig. 2 shows the
results obtained.
In the complete model, the effect of CSR on EP is positive and sig-
nificant (β = =0.791; p < 0.001), with social responsibility explaining
62.6% of the variance in the economic performance of MSMEs.
Therefore, the proposed hypothesis is confirmed. Additionally, the
Fig. 2. Results of the structural model.
Technological Forecasting & Social Change xxx (xxxx) xxxx
Composite reliability Cronbach's alpha 1. CSR 2. EP
0.8533 0.7452 0.8127 0
0.9118 0.8704 0.7911 0.8494
evaluation of the structural model has a good fit (GoF) and predictive
relevance (Q1). All the blindfolding algorithm Q2 Stone-Geisser values
(Geisser, 1974; Stone, 1974) are considerably above zero (Q2 CSR:
0.3160; Q2 EP: 0.3340), giving the model predictive relevance, and its
overall fit that this model allows the application of the goodness-of-fit
criterion (GoF: 0.6720 > cut-off value GoFlarge: 0.36) is robust and
confirms its overall validation (Tenenhaus et al., 2005; Wetzels et al.,
2009). Additionally, Lohmöller (1987) proposes the SRMR (root mean
square residual) calculation in the PLS as an indicator of the goodness-
of-fit. This value reflects the difference between the correlation matrix
observed and correlation matrix implied by the model. Hu and
Bentler (1998) and Sarstedt et al. (2011) recommend that this value be
equal to or less than 0.08. Our model obtains a value of 0.079, which is
below the recommended value.
4.3. Analysis of invariance and multigroup
4.3.1. Analysis of invariance
Before performing multigroup analysis, the invariance calculation
of the measurement instrument is carried out. In this way, it is guar-
anteed that potential variations are due to moderating variables and not
due to potential differences in the measurement models of each group.
The invariance of the measurement model is carried out sequentially
using the following calculations:
A) Invariance of configuration: This condition is fulfilled, with all
groups using the same measurement instrument, the same items,
and the same constructs—that is, the same configuration of the
model.
B) Metric invariance. Following the criteria of Gómez et al. (2012), the
equality of the estimated loadings in each sample will be tested. The
metric invariance is evaluated using the formula proposed by
Henseler et al. (2009), which is especially designed to compare path
coefficients, although there are no reasons preventing its use in the
comparison of loadings. Once the sample has been segmented, the
invariance will be confirmed.
5
S.-I.H. Juan Pablo, et al. Technological Forecasting & Social Change xxx (xxxx) xxxx

Table 4 Table 6
Results of the structural models for the three subsamples. Values of multigroup analysis.
Groups β R2 Groups P-value Supported

⁎⁎⁎
1–10 0.646 0.418 1–10 Vs. 11–50 0.1693 Nonsignificant
11–50 0.725⁎⁎⁎ 0.526 1–10 Vs. 51–250 0.0043 Significant
51–250 0.857⁎⁎⁎ 0.735 11–50 Vs. 51–250 0.0105 Significant

⁎⁎⁎
p < 0.001 (based on t(4999), one-tailed test).
This study examines the moderating effect of firm size using an
intergroup comparative approach. The whole sample appears as three
subsamples. Subsequently, PLS estimates path coefficients for three
subsamples (Table 4, Fig. 2).
Table 5 reflects the analysis of the different groups formulated,
where we check that the differences between the indicators' loadings
(see Fig. 2) of different groups are significant p>0.05 for all or prac-
tically all indicators. The loading for an indicator must be equivalent to
both samples, and the same indicators must be invariant between
subsamples. The partial invariance condition is fulfilled and is sufficient
for authors such as Diamantopoulos and Papadopoulos (2010). Each
CSR and EP construct fulfils the invariance condition p > 0.05, in at
least 50% of the indicators that comprise them. Likewise, the CSR
construct also fulfils the condition of SD and EnvD indicators; in the EP
construct, the K1 and K2 indicators are fulfilled. The existence of metric
invariance guarantees that the differences or similarities observed in
the causal relationships when comparing between the groups are real
and not skewed due to the lack of equivalence in measurement in-
struments.
4.3.2. Analysis of multigroup comparisons
Multigroup analysis is carried out considering the number of em-
ployees of the businesses categorized in three groups: from 1 to 10
employees (micro businesses), from 11 to 50 employees (small busi-
nesses) and from 51 to 250 employees (medium businesses). To contrast
the moderating effect hypothesis of the size, the proposal of
Henseler et al. (2009) was used, who presented a procedure for un-
dertaking nonparametric checks that is very suitable for multigroup
analysis with PLS. Thus, the probability of error when indicating the
population parameter of the group with a larger estimated path coef-
ficient is greater than that of the group with a smaller estimated coef-
ficient (value p of the multigroup analysis), which is given by the fol-
lowing expression:
θ
(2b¯(1) − bj (1) − 2b¯(2) − bj (2) )
P (b(1) > b(2) ″ β (1)≤″ β (2) ) = 1 − ∑
∀ j, i
J2
The probability of the estimated parameter for one of the groups
being greater than the estimated parameter for the other group allows
us to test the different potentials between groups. To calculate this
probability, both the estimated parameter and set of values obtained
from the bootstrap analysis are used, first focusing on the estimations
obtained through the bootstrap.
Table 6 shows the obtained values. There is a moderating effect as a
result of the subgroups generated: in subgroups 1–10 and 51–250, the
difference is greater than that in subgroups 11–50 and 51–250. T there
is barely a difference between subgroups 1–10 and 11–50, with no
significance.
5. Conclusions
The study confirms the research hypotheses. First, the measurement
of the social responsibility of businesses using the GRI triple bottom line
(Triple Bottom Line, Elkington, 2004) is adequate in MSMEs because all
indicators show adequate values of reliability and validity. Therefore, it
is confirmed that social responsibility may be considered a second-
order reflective multidimensional construct comprising an economic
dimension, a social dimension and an environmental dimension.
Therefore, CSR is simultaneously reflected as a combination of the three
economic, social and environmental values.
Second, the effect of CSR on EP is positive and significant, with
social responsibility explaining 62.6% of the variance of economic
performance of MSMEs. The model confirms that MSMEs that under-
take social responsibility activities (economically, socially and en-
vironmentally oriented business models) improve their performance
and represent a source of competitive advantage for the organization.
Finally, the size of MSMEs has a moderating effect on the re-
lationship between CSR and EP—that is, this relationship is dependent
on the size of the business; the greater is the number of employees, the
greater is the influence of CRS on EP among the group of small busi-
nesses compared with medium businesses.
5.1. Implications for research and theory
Most of the literature concerning corporate social responsibility and
sustainability has not empirically verified to what extent economic,
social and environmental dimensions might be traded-off or achieved in
combination (Alonso-Martinez et al., 2019). We found that CSR si-
multaneously targets economic results for the stakeholders, society, and
environment, taking into account the economic, social and environ-
mental dimension at once, and linking triple bottom line to economic
performance for a higher degree of sustainability in the three dimen-
sions considered.
Additionally, we empirically evaluated the social impact hypothesis;
there is a positive relationship between CSR and economic perfor-
mance—i.e., if a firm satisfies its stakeholder claims, they will re-
ciprocate by making firm-specific investments in the firm or improving
the firm global reputation, image, and so on (Maon et al., 2012). The
results are consistent with previous studies for other types of businesses

Table 5
Summary of results obtained from size invariance calculations.
Groups P-value
Corporate social responsibility Economic performance
SD ED EnvD K1 K2 K3 K4

1–10 Vs. 11–50 0.0561 0.0369* 0.0523 0.2121 0.2022 0.0441* 0.0342*
1–10 Vs. 51–250 0.0958 0.0248* 0.0816 0.1084 0.2438 0.0210* 0.0785
11–50 Vs. 51–250 0.4627 0.1593 0.2885 0.2766 0.3627 0.2957 0.3719

SD, Social Dimension; ED, Economic Dimension; EnvD, Environmental Dimension; K1, Operating income; K2, Profit/(loss) for the period; K3, Total Assets; K4,
Equity.
⁎
p < 0.05.

6
S.-I.H. Juan Pablo, et al. Technological Forecasting & Social Change xxx (xxxx) xxxx

(Gallardo-Vázquez et al., 2013; Herrera et al., 2013; Wang and
Bansal, 2012; Zhao et al., 2016)—that is, CSR is not exclusive to large
businesses, thus compensating the shortcomings of the prior analysis of
CSR in MSMEs. Acknowledging that MSMEs often apply CSR un-
consciously and in their own style has given rise to what has been called
“silent social responsibility” (Jenkins, 2004; Longo et al., 2005;
Perrini 2006; Jamali et al., 2009). Additionally, this improvement of
performance is substantial because social responsibility can explain
62.6% of the performance variance of MSMEs. With this work, we treat
one of the shortcomings detected in the literature: the analysis of social
responsibility in MSMEs, through sustainability reports.
5.2. Implications for firm practices
A PLS structural equations model was established to assess the in-
fluence of CSR practices on the economic performance of a company,
comprising three main aspects that must be simultaneously applied:
economic, social and environmental values. From a management point
of view, our study suggests that, to obtain results from the triple bottom
line perspective, MSMEs must carry out CSR practices acting in all three
dimensions. For example, a company knows the meaning and scope of
CSR, understands what and who are the groups of interests, collabo-
rates with other entities in the field of CSR, has a set of rules of conduct
and behavior for employees and partners, consults with employees on
important issues (Camacho and Fernandez, 2018), maintains labor
practices and decent work, takes into account the breakdown of em-
ployees by gender, takes actions to improve health and safety, carries
out sponsorships and donations to community projects, performs and
takes into account the results of customer satisfaction surveys (con-
sumer-oriented CSR) (Servera-Francés and Piqueras-Tomás, 2019),
carries out actions to mitigate the environmental impact of services
offered, and cares about the proportion of waste being recycled. The
state of greater establishment in society where MSMEs act, compared
with large businesses, places them in a privileged situation to maintain
closer relationships with stakeholders, having better knowledge of their
specific problems.
Finally, some limitations of this study are related to common pro-
blems of the dominant logic in research, namely, cross-sectional sur-
veys, one-shot reports, self-reports, Likert scales, multiple regression
analyses, techniques and structural equation models (Yáñez-
Araque et al., 2017). As potential future works, the separate measure-
ment of each of the dimensions of social responsibility may be proposed
to evaluate the effect of each on the performance of businesses. Like-
wise, other variables that moderate the influence of social responsibility
on economic performance may be considered, such as age, sector or
type of business (family businesses compared with nonfamily busi-
nesses).

Appendix. Measurement items for constructs adapted from GRI sustainability reporting guidelines

Corporate Social Responsibility (CSR)

Social dimension (SD)

Indicators Unit

Main geographic scope according to the territory in which company operates (regional, national, international) checklist yes or no (dummy vari-
ables)
Certifications, awards or distinctions received by your firm (ISO 9001, ISO 14,001, EFQM, OHSAS 18,001, SGE 21, regional or national- checklist yes or no (dummy vari-
level acknowledgment, international acknowledgment, others) ables)
What channels of communication are customers, employees, partners or shareholders, suppliers or other stakeholders currently using with checklist yes or no (dummy vari-
your organization? (customer service, suggestion systems, online contacts,telephone assistance, shareholders' meeting, meetings with ables)
suppliers, management's-employees' meetings, others)
Collaboration with other entities in thefield of CSR; associations to which the organisation belongs (Chamber of Commerce, sectorial or checklist yes or no (dummy vari-
territorial employers' organization, purchasing centre, NGOsand non-profit social entities, other associations, other initiatives) ables)
Objectives of improvement in environmental, labor, social aspects for next year (social performance, environmental performance, gender checklist yes or no (dummy vari-
Equality issue attention, reduction of energy consumption, increase paper recycling, increase hours of employee training) ables)
Who (or what) are the stakeholders of the firm identified and targeted by your organisation? To whom (or what) does your firm pay checklist yes or no (dummy vari-
attention? (customers, employees, partners or shareholders, suppliers, local community, public authorities −local, regional or national ables)
institutions, public organizations, etc.-)
Breakdown of employees by gender number of employees
Breakdown of employees by nationality number of foreign employees
Number of workers with disabilities number of employees with disabil-
ities
Workforce from sectors at risk of exclusion (the unemployed over the age of 45 years, workers with low qualification levels, minorities, etc.) number of employees
Education and training training expenses
List of actions to improve health & safety (accidents, fatalities) number of accidents, number of fatal
accidents
Number of community projects supported number of projects
Sponsorships and donations to community projects monetary value
Results of customer satisfaction surveys checklist yes or no (dummy vari-
ables)
Economic Dimension (ED)
Indicators Unit
Personnel expenses monetary value
Purchases monetary value
Donations to community monetary value
Total sum of taxes of all types paid monetary value
Reserves monetary value
Own endowment funds monetary value
Environmental Dimension (EnvD)
Indicators Unit
Annual electricity consumption kWh
Annual water consumption cubic meters
Use of recycled materials (paper, computer consumables, raw materials, packaging, plastics, other materials) report in tonnes, kilograms, or vo-
lume

7
S.-I.H. Juan Pablo, et al.
Waste recycled (paper, computer consumables, batteries, plastics andcardboard, other materials)
Corporate environmental initiatives(status of certification pertaining toenvironmental management systems,energy efficiency plan, compu-
terequipment renovation, luminaire control,energy-saving lighting, waste treatment,other environmental initiatives)
Economic Performance (EP) (from the Annual Accounts)
Indicators
Operating income (K1)
Profit/(loss) for the period (K2)
Total Assets (K3)
Equity (K4)
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Dr. Juan Pablo Sánchez-Infante received the B.E. and M.E. degree in industrial en-
gineering from the Polytechnic University of Madrid, Spain, in 1982. Ph.D. degree in
economics from the University of Castilla la Mancha, Toledo, Spain, in 2017. He is
Financial Control Officer and CIO in an international businesses Group. The main fields of
interest are the organization and administration of companies, Big Data and Business
Intelligent through the development of real models.
Dr Benito Yáñez-Araque is adjunct professor of Business Management and Marketing
and Chief Officer for Culture, Sport and University Extension in Toledo at University of
Castilla-La Mancha. He holds a Business Management and Administration B.A. degree and
Ph.D. in Economics, Entrepreneurship, Management of SMEs and Family Businesses from
the University of Castilla-La Mancha, and the M.A. degree in Occupational Risks
Prevention (Workplace Safety, Occupational Health and Ergonomics and Applied
Psychosociology) from the International University of La Rioja, and the Secondary and
Baccalaureate Teacher Training M.Ed. from the University of Extremadura. Her major
fields of research are: innovation, human resources, strategy, organizational behavior,
training and MICE.
Prof. Juan Moreno-Garcia received the B.E. and Ph.D. degrees from the University of
Castilla-La Mancha, Toledo, Spain, in 1992 and 2002, respectively, and the M.S. degree
from the University of Murcia, Spain, in 1996. He is an associate professor of industrial
engineering at the University of Castilla-La Mancha. His main fields of interest are fuzzy
and linguistic modeling, time series and linguistic description. He tries to develop models
for real applications.