Abstract
Facing increasing global rivalry, export-oriented firms are leveraging Corporate Social Responsibility (CSR) as a strategic mechanism for market differentiation. However, there is little understanding of the catalysts of CSR-driven differentiation, especially the precursors of product-level versus firm-level CSR methods. This research addresses this gap by using the Strategy Tripod framework to examine the influence of resource-based capabilities (Digital Readiness, Green Collaborative Culture), industry-based pressures (Dysfunctional Competition, Competitive Intensity), and institution-based forces (Government Support) on the formulation of these specific CSR strategies. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze survey data from 329 managers across 170 export-oriented suppliers, the results indicate a complex array of influencing factors. Green Collaborative Culture, Dysfunctional Competition, and Government Support considerably enhance both product-level and firm-level CSR. However, the impacts of Digital Readiness and Competitive Intensity are more segmented. These factors increase the adoption of product-level CSR while exhibiting no substantial impact on firm-level activities. The findings highlight the need to integrate a multi-level CSR framework into strategic planning. For practitioners, the results suggest that managers of export-oriented firms should use digital capabilities to improve CSR transparency at the product level, involve local stakeholders to mitigate institutional pressures, and align their CSR initiatives with heterogeneous market demands to ensure a sustainable competitive advantage.
Plain Language Summary
In today’s competitive global market, companies that export goods are increasingly using Corporate Social Responsibility (CSR), doing good things for society and the environment, to stand out. However, we don’t fully understand why some companies focus their CSR efforts on making their products more ethical or “green,” while others focus on broader company-wide initiatives like community projects. This study explores what drives these different choices. We looked at three key areas: a company’s internal strengths (like its technology and green-minded culture), industry pressures (like intense or unfair competition), and external forces (like government support). After surveying 329 managers from 170 exporting companies, we found that the reasons are complex. A strong green culture, unfair competition, and government support encourage companies to pursue CSR at both the product and company levels. In contrast, a company’s tech-savviness and the general intensity of market competition mainly push them to improve CSR only at the product level, without much effect on company-wide programs. For managers, our findings suggest using technology to make products more transparent, working with local partners to handle outside pressures, and tailoring CSR activities to meet market demands. This approach can help build a lasting competitive advantage.
Keywords
Introduction
For export-oriented suppliers from developing nations, navigating the global economy presents a distinct set of challenges. Beyond conventional commercial pressures, these firms must contend with the complexities of global oversight, meet a diverse and often conflicting array of international social and environmental standards, and build trust in markets where they are often perceived as foreign and less established (Fan, 2021). In this high-stakes environment, Corporate Social Responsibility (CSR), encompassing actions that extend beyond legal obligations to generate social and environmental value (Kim & Kim, 2025; W. Li et al., 2025), has emerged not merely as an ethical imperative, but as a critical strategic tool for differentiation and survival. While CSR is essential for addressing local institutional gaps (Cezarino et al., 2022) and signaling reliability to skeptical global buyers (Marano et al., 2017), it also imposes severe resource burdens. As J. H. Lee et al. (2018) argue, in the highly competitive context of emerging economies, broad CSR initiatives can be perceived as overinvestments that distract managers from core survival tasks. This creates a strategic dilemma: How can resource-constrained suppliers navigate the trade-off between embedding CSR into products to meet immediate market demands (product-level differentiation) versus investing in broader organizational legitimacy (firm-level differentiation)? The existing literature often treats CSR as a monolithic construct, failing to explain why firms might prioritize one level of differentiation over the other when facing such conflicting pressures.
In emerging markets, CSR has evolved beyond mere compliance into a sophisticated differentiation strategy. Firms use CSR to distinguish themselves in crowded markets, signaling reliability to both domestic and international stakeholders. This differentiation strategy drives value creation by integrating multiple dimensions, including social, ethical, and environmental benefits. For example, environmental stewardship mitigates ecological externalities, such as carbon emissions and inefficient waste management, and serves as a critical differentiator in markets increasingly scrutinized for environmental impact (He et al., 2025). Ethical integrity, achieved through operational equity, including employee welfare and transparent investor relations, fosters “moral capital” (Dall’Agnol et al., 2025; Guix & Lotfy, 2025). Additionally, philanthropic engagements, which secure proactive societal contributions and community-centric initiatives, enhance local legitimacy, a vital factor for firm survival in emerging regions (Zuluaga & Acosta, 2025). Financial commitment, characterized by strategic investment in sustainable R&D, diversity programs, and CSR-focused capital allocation, ensures that social goals are backed by economic substance (Cai et al., 2025; Huang et al., 2024).
Despite the emergence of multi-dimensional CSR frameworks, many firms have a limited conceptualization of value creation, centered on immediate shareholder returns. To develop beyond this restrictive paradigm, firms can implement Dual-Level CSR-based Differentiation. By combining product-specific attributes with a robust organizational identity, enterprises can replace narrow profit-seeking with a holistic value framework. According to D’Souza et al. (2024), this integrated approach is essential for securing the enduring legitimacy and stakeholder resonance required for long-term survival. At the product level, sustainable features, such as biodegradable materials and international eco-certifications, appeal to the “green” sensibilities of global consumers. This enables firms to command price premiums even in price-sensitive emerging markets. Firm-level differentiation extends beyond the physical offering to foster systemic trust. Through ethical operational practices and global advocacy campaigns, the corporate brand is repositioned as a symbol of reliability. This reduces information asymmetry between the firm and global investors, enhancing financial and reputational stability.
A critical distinction must be maintained between the broad commitments of CSR and the measurable metrics of Environmental, Social, and Governance (ESG), where CSR serves as a comprehensive, self-regulatory framework for social accountability while ESG provides the specific, quantifiable criteria used to evaluate performance (Tan et al., 2025). Building upon these definitions, CSR-based differentiation represents the deliberate strategic choice to leverage these commitments to secure a unique market position, functioning as a vital tool for export-oriented firms to reduce the “liability of foreignness” by bridging the gap between domestic origins and international expectations while building the reputational capital necessary for sustained success in highly regulated global markets (Khan & Jin, 2024; Lupo & Bartley, 2024).
In a rapidly evolving economy, Vietnam has to transition CSR from a voluntary gesture to a strategic necessity at both firm and product levels. The scale of the nation’s industrial output requires robust firm-level CSR to sustain global competitiveness. Currently, Vietnam is the leading exporter in Southeast Asia, with export values rising from $320 billion in 2019 to $470 billion in 2025 (McKinsey, 2023; VnEconomy, 2025). This expansion places Vietnamese firms in the international spotlight, where institutional ESG management is essential for mitigating operational risks in local communities. At the product level, a burgeoning class of affluent consumers is redefining market demands by prioritizing ecological and ethical standards. There is a growing emphasis on the “provenance of items,” which demands high levels of authenticity and traceability. To ensure consumer confidence, firms must provide transparent data on the ethical treatment of human, animal, and environmental resources throughout the supply chain (Schillebeeckx et al., 2022).
The adoption of social sustainability in Vietnam is not merely an internal initiative but is shaped by a complex ecosystem of external pressures. Enterprises in emerging Asian economies are increasingly forced to integrate sustainability into their corporate culture by major key drivers (Duong et al., 2024) including consumer advocacy manifesting as social pressure for ethical products; regulatory oversight involving mandates from municipal and national authorities; external stakeholder influence stemming from social media, NGOs, and social activists; and cultural internalization representing the firm’s intrinsic recognition of a sustainability-oriented organizational culture.
Despite the growing strategic importance of CSR, there is a significant research gap. While a substantial body of literature has explored the general benefits of CSR, there has been a lack of research that systematically investigates the specific drivers of Dual-Level CSR-based differentiation, particularly in the unique context of export-oriented suppliers in emerging economies such as Vietnam. The empirical literature has yet to determine how emerging internal capabilities (such as Digital Readiness and Green Culture) coexist with external pressures (such as Competitive Intensity, Dysfunctional Competition, and Government Support) to drive the strategic trade-off between product-level and firm-level differentiation.
To address this gap, this study used the Strategy Tripod Framework (Barin Cruz et al., 2013; Peng et al., 2009), which integrates three distinct perspectives to analyze strategic behavior. Under the Resource-Based View, the study examined Green Collaborative Culture as a critical moderator for achieving sustainable goals (S. Wang et al., 2022) and Digital Readiness as a significant enhancer of CSR engagement (Song et al., 2025). However, the role of digital capabilities remains a point of academic debate, as firms often struggle to translate technological tools into effective strategic governance (Eller et al., 2020). From the Industry-Based View, we analyzed Competitive Intensity and Dysfunctional Competition as a reflection of volatile competitive dynamics and market pressures. Finally, under the Institution-Based View, the study assessed Government Support as a proxy for the influence of regulatory mandates and institutional legitimacy.
In the context of Vietnam, a major global production hub where firms face intense pressure from consumers and regulators to enhance their social and environmental performance, this study addresses a central question: How do resource-based, industry-based, and institution-based factors collectively and individually shape the adoption of product-level and firm-level CSR differentiation strategies among export-oriented suppliers? This study aimed to provide a nuanced, empirically grounded model that can guide managers and policymakers in harnessing the power of CSR strategy to achieve a sustainable competitive advantage in the global marketplace.
Literature Review
The Tripod View of Strategy
This study offers a unique theoretical framework to develop a complete and contextually relevant model of CSR strategy in Vietnam. We synthesized the overarching strategic perspectives of the “Tripod View” with specific, granular CSR drivers. This integrated approach enabled the construction of a multi-tiered framework that accounts for the intricate interactions between a firm’s external environment, its internal resources, and the particular incentives driving its social and environmental activities.
The tripod view is the foundation for our model. This perspective proposes that a firm’s strategy emerges from three interconnected forces: the industry-based view, focusing on competitive dynamics; the resource-based view, emphasizing internal organizational strengths; and the institution-based view, which considers the formal and informal “rules of the game” (Peng et al., 2009). This approach is especially effective for comprehending strategic decisions in emerging economies such as Vietnam, where institutional volatility, characterized by political fluctuations and informal rivalry, significantly influences corporate conduct (C. Chen et al., 2023; Qu et al., 2024).
While the tripod view offers a comprehensive strategic framework, it often lacks the specificity required to identify the immediate factors compelling a corporation toward a CSR-differentiated strategy. We addressed this gap by adding a set of unique drivers that may be directly linked to the three pillars of the tripod.
Corporate Social Responsibility in Vietnam
The empirical literature categorizes CSR duties into economic, humanitarian, and legal sectors (Guo & Xie, 2025). As an essential and effective strategic response to stakeholder challenges, CSR includes context-specific organizational activities and policies that integrate stakeholder expectations with the
CSR is a self-regulatory business model, fostering accountability toward the firm itself, its shareholders, and the community. In the context of small enterprises, social responsibility is often rooted in the owner-manager’s personal moral values and a desire to promote social cohesion by “giving back” (Uba et al., 2023). Governments and corporations alike advocate for CSR due to its multi-dimensional impact on the economy, the environment, and social welfare.
In the realm of electronic product recycling, government-supported CSR has provided additional incentives for investors, resulting in an increased amount of recycled electronic equipment (Krstic & Mihajlov, 2020). By engaging in CSR, firms can create value while safeguarding their market reputation (Danish et al., 2025; Milfeld & Packer, 2025). Furthermore, CSR fosters robust customer relationships, which can enhance market share and increase consumer willingness to pay, independent of objective product quality (Kumar et al., 2025). A firm’s commitment to social responsibility facilitates product promotion by positively influencing consumer sentiment and securing a favorable market reputation (Mozas-Moral et al., 2024).
Firms with established CSR initiatives generally have greater market expansion opportunities and benefit from more robust labor market frameworks compared to non-participatory peers (S. Bansal et al., 2023). While research suggests that CSR enhances business reputation and strengthens political connections (T. Bansal & Clelland, 2004; L. Cheng et al., 2025), it also results in performance pressures and increased operational costs to sustain high standards. Our study investigated how
In Vietnam, CSR practitioners face a landscape defined by two primary factors. First, the domain of CSR is characterized by “moral pluralism,” where practitioners must reconcile competing moral foundations and values. Second, in transitional economies like Vietnam, where institutional frameworks are often underdeveloped, systematic oversight of voluntary CSR remains limited. Consequently, individuals often have to navigate tensions between personal beliefs and established cultural norms, particularly in a society influenced by collectivist and communist ideologies (Vu & Shin, 2024).
Vietnam has increasingly prioritized CSR and ESG policies, driven by domestic reforms and global supply chain pressures (Nguyen et al., 2025; Vietnam Corporate Sustainability Forum, 2025). The nation’s export-oriented sectors—primarily textiles, apparel, electronics, and agriculture—each face distinct CSR challenges. The textile industry, employing over 2.5 million people, faces rigorous international scrutiny regarding labor rights and working conditions (Sustainability Europe, 2025; Vietnam Briefing, 2025). The electronics sector must manage environmental hazards associated with hazardous waste and chemical disposal (Carbonclick, 2025).
Vietnam’s CSR trajectory and ESG rankings highlight both progress and persistent challenges within the broader Asian manufacturing landscape. Compared to Bangladesh, Vietnam has a higher rate of independent CSR audits and stricter regulatory compliance, largely driven by free trade agreements such as the
These contextual considerations position Vietnam as a vibrant yet complex environment for CSR and ESG implementation. As export sectors face mounting global pressure, the focus of CSR continues to evolve based on enterprise type. This comparative perspective underscores Vietnam’s unique regional standing, broadening the implications of this study beyond a purely national framework.
Hypothesis Development
Green Collaborative Culture
To be considered creative, a thought or concept must be novel, functional, and distinctive (Amabile & Gryskiewicz, 1989). Within this paradigm,
Organizational creativity theory posits that leaders in green collaborative cultures are typically accessible, open, and transparent; traits that empower followers to pursue innovative, sustainable initiatives (Mandal & Pal, 2024). Such leadership behaviors propel the formulation of strategies and projects that align with a firm’s commitment to sustainable development (Shobande et al., 2025). Based on this theoretical framework, we proposed the following hypotheses:
Digital Readiness
This study examined the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), and Blockchain Technology (BCT) because of their transformative potential in advancing sustainability. While studies suggest these digital advancements enhance sustainability through increased transparency, operational efficiency, and environmental stewardship, a growing body of research highlights concerns regarding their broader social implications.
Empirical evidence indicates that the IoT, AI, ML, and BCT significantly contribute to social sustainability. Specifically, the
Despite these promising outcomes, critics argue that Industry 4.0 technologies may have adverse social effects. Automation and increased digitalization risk exacerbating labor inequality by displacing low-skilled workers. The collection and monitoring of vast datasets raise ethical concerns regarding employee privacy and the widening digital divide between technologically advanced and developing regions. Additionally, without adequate oversight, the integration of AI and ML may result in biased decision-making, potentially undermining equity and inclusivity within social supply chains.
In this context,
Dysfunctional Competition
Maskus and Reichman (2017) observed that new firms using innovative tactics are more inclined to develop original, creative products to ensure long-term sustainability amidst Dysfunctional Competition. Furthermore, when Dysfunctional Competition stems from political networking in hostile and unproductive rivalries, it interacts with entrepreneurial and market orientations to produce diverse strategic configurations (Du & Kim, 2021).
Prior research suggests that the relationship between an entrepreneurial orientation and CSR is positively moderated by external Dysfunctional Competition (L. Sheng et al., 2023). In these environments, innovative efforts often lack adequate legal safeguards (Du et al., 2016), leaving firms vulnerable to product replication by competitors and eroding their competitive advantage (Posen et al., 2022). To counter this, businesses increasingly rely on trusted partnerships for resource exchange and collaborative innovation (Min & Kim, 2021).
When faced with intense Dysfunctional Competition, companies are likely to adopt differentiation strategies to avoid “homogeneous competition” and maintain market standing (S. Sheng et al., 2013). This environment drives firms toward CSR initiatives as a primary mechanism for building social capital with key stakeholders and securing critical resources. In highly dysfunctional settings, entrepreneurial firms participate in CSR to obtain the institutional support necessary to explore new opportunities and protect their interests. Thus, dysfunctional competitiveness serves as a catalyst for deeper engagement with CSR. Based on these theoretical foundations, we proposed the following hypotheses:
Competitive Intensity
In the dynamic and often turbulent landscape of modern business,
This study characterized Competitive Intensity as the breadth of direct and indirect competition a firm encounters from its rivals. In highly competitive markets, organizations are perpetually compelled to differentiate themselves, innovate, and capture market share. This pressure often manifests through price competition, aggressive marketing campaigns, and technological races.
As consumer and stakeholder awareness of environmental challenges intensifies, CSR has emerged as a potent mechanism for differentiation. Within this context, firms may develop eco-friendly products, invest in sustainable supply chains, or engage in broader CSR initiatives not merely as philanthropic gestures, but as strategic responses to external market pressures.
While the relationship between competition and corporate strategy is well-documented, a significant gap remains in our understanding of how Competitive Intensity affects CSR across various organizational levels. The current literature frequently analyzes the overarching impacts of CSR in competitive environments but fails to sufficiently differentiate between
At the product level, fierce competition necessitates innovation and distinctiveness. In a market saturated with homogenous goods, integrating social and environmental attributes directly into the product—via eco-design, sustainable materials, ethical sourcing, or responsible end-of-life management—can secure a unique market position. Product-level CSR is a tangible manifestation of corporate values and appeals directly to the expanding demographic of “conscious consumers.” Consequently, we contend that as Competitive Intensity increases, firms are more likely to integrate CSR directly into their product development strategies.
Beyond individual products, Competitive Intensity also drives firms to adopt a more holistic, firm-level CSR strategy. In hyper-competitive markets, a firm’s overarching reputation and brand identity become critical strategic assets (Kemper et al., 2013). Engaging in systemic CSR initiatives—such as community investment programs, large-scale environmental conservation efforts, or the adoption of fair labor standards—facilitates the development of a robust brand reputation that is difficult for competitors to replicate. As Zhu et al. (2023) suggested through a game-theoretic lens, competitive pressures often compeled firms to strategically align their CSR efforts with those of their rivals to maintain market standing.
At the organizational level, CSR is a
Government Support and Corporate Social Responsibility
Political factors are paramount in assessing market positioning relative to subsidies, prompting a contentious debate over whether such fiscal support enhances market power or distorts competition (Webster & Cain, 2025). Various mechanisms suggest a positive correlation between subsidies and market power: for instance, Huang and Du (2024) argued that industrial land subsidies provide firms with a distinct competitive advantage, though often at the expense of operational efficiency. Conversely, in markets characterized by high product substitutability and acute environmental consciousness, subsidies may inadvertently drive firms toward excessive green R&D, leading to overproduction and diminished profitability (Fang & Zhao, 2023). Furthermore, subsidies act as a signaling mechanism, facilitating access to external financing and credit from financial institutions (Xing et al., 2024).
Subsidies can catalyze innovation in sectors focused on green energy and fossil fuel alternatives (H. Zhang & Zhang, 2023). However, Government Support may also introduce significant inefficiencies. In the Vietnamese context, empirical evidence has shown an adverse correlation between industrial subsidies and corporate export performance, with quantity-based transfers often proving ineffectual in poverty alleviation (Do & Le, 2023).
The availability of subsidies may also incentivize rent-seeking behavior, such as financial fraud or the distortion of productivity metrics. Subsidies can also erode the motivation for recipient firms to enhance internal efficiency, leading to an institutional dependency where market power becomes contingent upon continued state support. In highly competitive landscapes, these capital flows may decrease market responsiveness, fostering a “production-for-subsidy” mindset that contributes to oversupply.
While the nexus between Government Support and CSR remains relatively under-explored, one prominent perspective suggests that subsidies are instruments for regulating environmental externalities (Yin et al., 2025). Economic and tax incentive programs have been shown to bolster eco-friendly innovation performance, particularly when coupled with direct government grants (Yin et al., 2025). For example, Government Support significantly improves the operational efficiency of CSR-linked initiatives, such as battery-swapping services (Wu & Zhang, 2025).
Conversely, climate risks may impede sustainable innovation in private enterprises, particularly those with limited Government Support or those operating in non-polluting sectors (C. Lee, Li & Zhang, 2025). Access to state finance allows firms to improve efficiency and engage in socially beneficial activities, strengthening the symbiotic bond between the private sector and the state.
Current research in operations management highlights how governmental regulations are designed to institutionalize CSR activities. While some models use environmental fees to encourage the deployment of green technology (Iannucci & Tampieri, 2023), others suggest that corporations actively pursue CSR only after meeting mandatory ESG commitments (Yin et al., 2025).
A persuasive argument suggests that governments provide subsidies to achieve specific political objectives (Berka et al., 2025). Within this framework of strategic reciprocity, private firms may engage in socially responsible initiatives as a means of “repaying” or maintaining ties with the state (Alonso-Morales et al., 2025). Municipalities that excel in the efficient allocation of subsidies—characterized by high human capital and resilient social institutions—tend to achieve significant progress toward the UN Sustainable Development Goals (SDGs). Based on these dynamics, we proposed:
The conceptual model is shown in Figure 1.
Conceptual model.
Methodology
Case Study Method and Analysis
The case study method enables a comprehensive and rigorous examination of a specific organization, event, or social unit within a defined spatial and temporal framework and is defined by Miles et al. (2014) as “a phenomenon in a bounded context.” This methodology is particularly appropriate when the context is inextricable from the phenomenon itself, as observed in the study of CSR in an emerging economy such as Vietnam. In this landscape, institutional frameworks, cultural norms, and market dynamics profoundly influence strategic decision-making. Given that the boundaries between the phenomenon and its context are often fluid, this methodology uses multiple sources of evidence to ensure triangulation, validity, and depth of insight (Yin, 2018).
At the
At the
Many of Vietnam’s leading conglomerates, including
In environments where
In Vietnam,
Sampling and Data Collection
To evaluate the proposed hypotheses, a survey was conducted among export-oriented suppliers based in Vietnam. Vietnam was selected as an ideal research context because its constrained domestic market provides a significant impetus for local suppliers to pursue globalization. The study used a purposive sampling technique, which is widely applied in contemporary research to access specific populations and reach targeted participants effectively.
The sample was selected based on two rigorous criteria: (1)
Through a partnership with a state-owned e-commerce association, 274 export-oriented firms were initially identified. Of these, 170 firms agreed to participate (a 62% response rate). From these 170 organizations, contact information was obtained for 510 senior personnel, including owner-managers and managing directors (three per firm). Online questionnaires were distributed to these leaders, resulting in 329 completed surveys (a response rate of 64.5%).
Data were collected between October 2022 and February 2023 using a structured questionnaire. While most items were adapted from established literature, several new constructs were developed to meet the specific objectives of this study. The preliminary instrument was evaluated by subject matter experts in international trade to ensure content validity.
This study was conducted in strict adherence to established ethical standards for research involving human participants. The research design implemented several measures to ensure the protection and well-being of all respondents:
A pilot study involving semi-structured interviews was conducted with five managers from international firms with varying levels of global engagement. This process facilitated the refinement of the survey instrument, which was subsequently translated into Vietnamese using the
Demographic and Organizational Profile.
Source. Authors’ own creation/work.
The descriptive profile of the sampled firms and respondents is summarized across several categorical variables, including company size, revenue, demographic characteristics, and industrial sector. Regarding firm size, the majority of enterprises employed fewer than 500 workers. Firms with fewer than 50 employees accounted for 21.3%, those with 51–200 employees constituted 29.2%, and firms with 201 to 500 employees represented the largest proportion of the sample (30.4%). Medium-sized firms with 501 to 1,000 employees comprised 11.6%, while large enterprises with more than 1,000 employees made up 7.6%. These figures indicate that the sample was predominantly composed of small and medium-sized enterprises (SMEs).
Firm revenue distribution revealed a similar trend toward smaller-scale businesses. About 23.4% of firms generated annual revenues below $1 million, while 22.8% and 21.9% fell within the $1 to 10 million and $10 to 20 million ranges, respectively. Firms earning $20 to 50 million constituted 14.9%, and those generating $50 to 100 million accounted for 9.7%. Only a small subset (5.8%) reported revenues exceeding $100 million, confirming that high-revenue firms were relatively underrepresented in the sample.
In terms of respondent demographics, males dominated the sample (75.1%), with females comprising 24.9%, reflecting a gender imbalance consistent with the industrial composition of the surveyed firms. The respondents’ educational attainment indicated that 57.8% held college or university degrees, and 35.3% had completed graduate-level education, suggesting a generally well-educated sample. Only 5.8% had graduated from vocational or junior high schools, and 1.2% reported other educational backgrounds.
Age distribution indicated that most respondents were in their early to mid-career stages. The largest group (57.1%) were aged between 25 and 34.9 years, followed by 23.7% between 35 and 44.9 years. Younger respondents under 25 years accounted for 9.4%, while only a small proportion (6.1%) were between 45 and 54.9 years, 2.7% were between 55 and 65 years of age, and less than 1% were aged more than 65 years. In terms of firm age, 37.1% of the businesses had operated for 3 to 6 years, 30.1% for more than 12 years, and 20.4% for 7 to 12 years. A smaller proportion (12.5%) were newly established firms under 3 years old, suggesting a balanced representation of both mature and emerging enterprises. Ownership structure analysis showed that privately owned enterprises dominated the sample (58.1%), followed by joint-stock companies (21.3%) and state-owned enterprises (12.5%). Foreign direct investment (FDI) enterprises represented 4.9%, while other ownership forms accounted for 3.3%, underscoring the strong presence of domestic private ownership among the surveyed firms. Industry-wise, the sample showed a diverse distribution. Electronics companies represented 25.8%, food and beverage firms made up 18.5%, textile manufacturers accounted for 17.6%, and metal processing industries comprise 11.9%. The remaining 26.2% belonged to other industrial categories. This diversity indicated a well-distributed representation across major manufacturing sectors.
Overall, the descriptive results show that the dataset predominantly consisted of small- and medium-sized, privately owned, domestically operated firms with highly educated young- to mid-career professionals, reflecting the typical characteristics of emerging industrial segments in the sample context. The data align with Vietnam’s leading export categories, which include electrical machinery and equipment, clothing and accessories, food products, fruits, and other agricultural goods (Workman, 2024).
Results
Data Analysis and Results
Measurement
All assessments in this study were derived from prior research and used a 7-point Likert scale, ranging from 1 “strongly disagree” to 7 “strongly agree.” The assessment of “Green Collaborative Culture” was based on the research of Barin Cruz et al. (2013), comprising a six-item latent component.
Data Examination
To assess the measurement model involving latent variables, component analysis and various statistical techniques were used in this research. Using measurements from prior research enabled the analyses to be performed in SmartPLS (Ringle et al., 2020). The factor analysis conducted in SmartPLS indicated that the factor loadings for all measurement items exceeded the threshold value of 0.7, and each construct exceeded the necessary inter-construct correlations (Agarwal & Karahanna, 2000).
The composite reliability (CR) ratios of the constructs exceeded 0.7, and the average variance extracted (AVE) exceeded the minimum requirement of 0.5 (refer to Table 2). Furthermore, all Heterotrait-Monotrait (HTMT) ratios of the correlations among the constructs ranged from 0.5 to 0.85. The measurements demonstrated convergent validity and reliability, as well as discriminant validity (Agarwal & Karahanna, 2000). Table 3 presents the findings of the correlation matrix, indicating strong discriminant validity, as evidenced by the square root of the AVE.
Descriptive Analysis.
Source. Authors’ own creation/work.
Discriminant Validity.
Source. Authors’ own creation/work.
Note. CC = Green Collaborative Culture; CI = Competitive Intensity; DR: Digital Readiness; GS = Government Support for eco-friendly/green and CSR projects; DS = Dysfunctional Competition, CSP = CSR-based differentiation strategy for product- level; CSF = CSR-based differentiation strategy for firm-level.
Common Method Bias
Common Method Bias (CMB) was evaluated to assess relevant variances during the research design and data collection processes. CMB was examined using two methodologies proposed by Podsakoff et al. (2003). The findings from Harman’s single-factor analysis and the collinearity assessment method (Kock, 2015) indicated that CMB did not significantly jeopardize the validity of the present research model.
Empirical Findings
Following the factor analysis results that demonstrated accurate and valid measurement constructs in the research model, we evaluated the structural model and computed the path coefficient using PLS-SEM. The route analysis used SmartPLS 3.3 (Ringle et al., 2020) with 5,000 bootstrap samples (Hair et al., 2014). The analysis evaluated effects among green-oriented and strategic factors, including Green Collaborative Culture (CC), Digital Readiness (DR), Dysfunctional Competition (DS), Competitive Intensity (CI), and Government Support (GS), on two outcome variables: the CSR-based Differentiation Strategy at the Product Level (CSP) and the CSR-based Differentiation Strategy at the Firm Level (CSF). Table 4 presents the results of the PLS-SEM analysis, including the estimated path coefficients, t-statistics, and p-values for all hypothesized relationships. The results indicate the following relationships:
H1a (CC → CSP): Green Collaborative Culture positively and significantly influenced the CSR-based product-level differentiation strategy (β = .272, t = 3.903, p < .001). This suggests that a strong collaborative culture emphasizing environmental values enhances firms’ abilities to differentiate products through CSR initiatives. H1b (CC → CSF): Green Collaborative Culture also exerted a significant positive effect on the firm-level CSR differentiation strategy (β = .284, t = 4.188, p < .001), indicating that internal collaboration and shared ecological values foster broader, organization-wide strategic integration of CSR.
H2a (DR → CSF): Digital Readiness showed no significant influence on firm-level CSR differentiation (β = .039, t = 0.757, p = .449). This implies that technological preparedness alone does not directly translate into strategic CSR outcomes unless supported by other organizational capabilities. H2b (DR → CSP): The effect of Digital Readiness on CSR-based product-level differentiation was positive and significant (β = .128, t = 2.288, p = .023). Firms leveraging digital tools are more likely to integrate CSR elements into product innovation and communication.
H3a (DS → CSP): Dysfunctional Competition significantly influenced CSR-based product-level differentiation (β = .197, t = 2.950, p = .003). Competitive distortions push firms to adopt product-level CSR differentiation as a proactive response to maintain legitimacy and reputation. H3b (DS → CSF): A significant positive relationship was also observed between Dysfunctional Competition and firm-level CSR differentiation (β = .214, t = 3.164, p = .002). This indicates that rising unethical or unfair competition pressures firms to strengthen CSR commitments across the organization.
H4a (CI → CSP): Competitive Intensity was positively related to CSR product-level differentiation (β = .146, t = 1.963, p = .050). Although marginally significant, this finding suggests that firms perceive CSR-related differentiation as a viable tool to outperform rivals in highly competitive markets. H4b (CI → CSF): The path from Competitive Intensity to firm-level CSR differentiation was statistically insignificant (β = .072, t = 1.036, p = .301), implying that intense competition alone does not stimulate CSR at the strategic organizational level.
H5a (GS → CSP): Government Support for eco-friendly and CSR projects significantly enhanced CSR-based product differentiation (β = .204, t = 2.708, p = .007). Public policy assistance, subsidies, and regulatory incentives appear to motivate firms to integrate CSR into their product portfolios. H5b (GS → CSF): Similarly, Government Support had a strong positive effect on firm-level CSR differentiation (β = .301, t = 4.193, p < .001). This highlights the critical role of institutional backing in encouraging firms to mainstream CSR within their strategic agendas.
Overall, eight of the ten hypotheses were supported, indicating that Green Collaborative Culture, Dysfunctional Competition, and Government Support are the most influential predictors driving CSR-based differentiation. These findings emphasize the combined importance of internal cultural alignment, external market pressures, and enabling governmental environments in strengthening both product- and firm-level CSR strategies among Vietnamese firms.
SEM Path Results.
Source. Authors’ own creation/work.
The finding that Digital Readiness (DR) did not significantly influence firm-level CSR differentiation (H2a: β = .039, t = 0.757, p = .449) suggests that mere technological preparedness is insufficient to directly drive CSR strategies at the organizational level. This aligns with emerging evidence that digital capabilities alone do not guarantee effective CSR integration unless accompanied by complementary organizational resources and managerial commitment (Hanelt et al., 2021). Digital transformation facilitates transparency, stakeholder engagement, and environmentally sustainable practices (Song et. al, 2025), but its impact on strategic CSR outcomes depends on how well digital initiatives are embedded within broader corporate governance and culture. The role of Digital Readiness in CSR may be mediated or moderated by factors such as leadership support, board diversity, or firm absorptive capacity, which may explain the nonsignificant direct effect.
Regarding Competitive Intensity (CI), the mixed results offer useful insights. The marginally significant positive effect of CI on CSR-based product differentiation (H4a: β = .146, t = 1.963, p = .050) indicates that firms may strategically use CSR at the product level as a competitive advantage tool in highly contested markets. This is consistent with the product differentiation theory of CSR that suggests firms facing greater external rivalry invest in CSR activities to enhance customer loyalty and brand reputation (Bagnoli & Watts, 2003; Porter & Kramer, 2002). Empirical studies have also documented positive CSR investments in competitive product markets as firms seek to differentiate their offerings (Bénabou & Tirole, 2010; Campbell, 2007).
However, the insignificant relationship between CI and firm-level CSR differentiation (H4b: β = .072, t = 1.036, p = .301) suggests that the intensity of competition alone does not motivate firms to comprehensively incorporate CSR at the organizational strategy level. This aligns with arguments that high industry competition pressures firms to focus on cost minimization and short-term survival strategies, which can crowd out broader CSR efforts (Porter & van der Linde, 1995; Shleifer, 2004). Moreover, firm-level CSR activities typically require substantial investments and long-term orientation (Bagnoli & Watts, 2003), which competitive environments might discourage. This nuanced effect underscores the complexity of CSR adoption and suggests that firm-level CSR differentiation may respond less to market competition and more to internal capabilities or institutional environments, an insight supported by scholars emphasizing the role of ownership structures and stakeholder relationships in shaping CSR strategies (Bénabou & Tirole, 2010). Together, these results highlight that while competitive pressures might influence tactical CSR applications such as product differentiation, they do not necessarily drive deep organizational CSR transformation, and that Digital Readiness requires strategic alignment with other organizational enablers to contribute effectively to firm-level CSR differentiation (Figure 2).
PLS-SEM results.
The R-squared values for endogenous variables were significant: CSR at the product level (R2 = 50%), CSR at the firm level (R2 = 47.6%). The R2 values were above 35%, showing that it is a robust model (Cohen, 2013).
Discussion and Implications
Discussion
Our empirical analysis provides a detailed validation of the Strategy Tripod framework in explaining CSR-based differentiation. The model explains a substantial amount of variance in both product-level (R2 = 50%) and firm-level CSR (R2 = 47.6%), confirming that strategic choices in emerging economies are driven by a complex interplay of internal resources, industry dynamics, and institutional forces. Below, we discuss these drivers in detail.
Resource-based Drivers: The Contrast between Culture and Technology
First, regarding Green Collaborative Culture, our results support both H1a and H1b, aligning with the resource orchestration view presented by Wong et al. (2015). Although they focused on “Internal Green Supply Chain Integration,” their findings highlight that cross-functional collaboration is a critical mechanism for orchestrating internal resources and breaking down functional silos to achieve environmental goals. In our study, this culture enabled the cross-functional sharing of green knowledge required for both specific product innovation (H1a) and holistic firm-level strategy (H1b). Furthermore, S. Wang et al. (2022) highlighted the moderating role of organizational green culture, arguing that it strengthens the effectiveness of green knowledge management. In a supportive green culture, employees are more inclined to adopt pro-environmental behaviors and share eco-ideas, which catalyzes the differentiation of products and the achievement of competitive advantage.
In contrast, Digital Readiness presents a complex picture, presenting what we term the “Digital Readiness Paradox.” While digital capabilities significantly drove product-level CSR (H2b supported; β = .128), they showed no significant influence on firm-level CSR (H2a rejected). This finding aligns with the operational focus of SMEs in global supply chains. As noted by Shashi et al. (2020), digital technologies are critical enablers for enhancing supply chain visibility and agility, allowing firms to respond rapidly to market changes. For Vietnamese exporters, this means leveraging Digital Readiness to verify the ‘green’ attributes of their products to satisfy international buyers, thereby directly supporting product differentiation. Conversely, the lack of impact on firm-level CSR can be explained by the depth of digital adoption. Eller et al. (2020) argued that SMEs often focus on digitizing specific operational tasks but struggle to integrate digital strategies into their strategic planning due to resource constraints and daily business pressures. Similarly, in the context of emerging economies, Song et al. (2025) found that the positive impact of digital transformation on CSR is contingent upon high internal control quality. This implies that without robust internal governance mechanisms, which SMEs often lack compared to large listed firms, Digital Readiness alone may not automatically translate into holistic firm-level CSR improvements. Thus, our sample firms appear to be using technology as a tactical tool for product sales rather than a strategic lever for organizational transformation.
Industry-based Pressures: Signaling versus Survival
A notable finding of this study is the consistent positive influence of Dysfunctional Competition on both Product-level (H3a: β = .197) and Firm-level CSR (H3b: β = .214). This suggests that in Vietnam, engaging in ethical practices (“doing good”) is a strategic response to a dysfunctional (“bad”) market environment. We explain this through the lens of Signaling Theory. As Montiel et al. (2012) proposed, in markets plagued by unethical practices and weak legal enforcement (specifically policy-specific corruption), buyers face high information asymmetry. In such contexts, CSR certifications become a high-cost signal that only capable and honest firms can afford, effectively differentiating them from opportunistic rivals. Moreover, this behavior is critical for export-oriented firms. Extending the logic of Marano et al. (2017), suppliers from emerging markets often face a “liability of origin”: skepticism from global buyers regarding their reliability due to weak home-country institutions. By engaging in robust CSR at both the product and firm levels, Vietnamese suppliers can overcome these institutional voids, signaling to international partners that they adhere to global standards despite the dysfunctional domestic environment. Thus, rather than hindering CSR, unfair competition paradoxically incentivizes firms to invest more in social responsibility to establish legitimacy and trust.
Competitive Intensity showed a divergent effect. While intense competition drove Product-level CSR (H4a: β = .146, p < .05), it failed to stimulate Firm-level CSR (H4b: β = .072, p > .05). This dichotomy can be explained by the tension between differentiation needs and resource constraints. Regarding H4a, our finding supports Flammer (2014), who argued that increased foreign competition compels domestic firms to use CSR as a differentiation strategy to leverage their comparative advantage with local stakeholders. Similarly, R. Liu et al. (2026) posited that highly competitive environments promoted firms to innovate and explore new opportunities, such as green product innovation, to differentiate themselves from rivals (Yan et al., 2026). In Vietnam’s crowded export sector, embedding social and environmental attributes into products is a tactical necessity to escape price wars and capture premium market segments. However, the insignificance of H4b aligns with the Slack Resources Theory as articulated by Campbell (2007). High Competitive Intensity erodes profit margins, depleting the financial slack required for long-term, firm-wide CSR investments. Conversely, Lee et al. (2018) provided evidence from emerging markets that in highly competitive industries, broad CSR initiatives are often viewed as ‘overinvestments’ (agency costs) rather than strategic assets. In such environments, the pressure for short-term survival and cost efficiency can supersede the motivation for firm-level CSR. Thus, Vietnamese firms appear to adopt a pragmatic approach: they invest in CSR where it is visible to the customer (the product) but constrain spending on broader organizational CSR due to competitive cost pressures.
Institution-based Forces: The Critical Role of Government
Finally, Government Support emerged as a robust driver for both strategies (H5a and H5b supported). The strong support for H5a and H5b can be explained through Resource Dependence Theory. As noted by Zhao et al. (2022), in emerging economies, government subsidies serve as critical financial support that helps alleviate financing constraints. These financial buffers allow firms to absorb the substantial costs of CSR implementation (such as product development pressures), which would otherwise be prohibitively expensive. Additionally, Cezarino et al. (2022) highlighted that in emerging markets, firms often gain legitimacy by filling institutional voids and addressing social needs that government policies fail to cover. By actively responding to Government Support through robust CSR (H5b), Vietnamese firms not only secure financial incentives but also build political capital, ensuring long-term stability in a volatile institutional environment.
Theoretical Implications
This study makes several important contributions to the literature on strategic management and corporate social responsibility. First, it provides a robust empirical validation of the Strategy Tripod framework in the specific and under-researched context of CSR-based differentiation among export-oriented suppliers in an emerging economy. By simultaneously examining resource-based, industry-based, and institution-based drivers, our study offers a more holistic and integrated understanding than single-perspective analyses, confirming the framework’s utility in explaining complex strategic choices. Second, our research introduces and validates the concept of Green Collaborative Culture as a critical resource-based capability for driving CSR. This moves beyond generic conceptualizations of innovation to highlight the importance of a culture that is both environmentally conscious and collaborative, providing a new and valuable construct for future research in sustainable innovation. Third, the study contributes to the ongoing debate on the role of competition in fostering CSR. By disentangling the effects of Dysfunctional Competition and Competitive Intensity, we provide a more detailed picture, demonstrating that the nature of competition, not just its intensity, is a critical determinant of a firm’s strategic response. Finally, the “Digital Readiness Paradox” we identified opens a new and important avenue for theoretical development, suggesting that the link between digital transformation and corporate sustainability is not as straightforward as often assumed and requires a deeper examination of how digital tools are integrated into broader organizational strategies.
Practical Implications
The findings of this study offer several actionable insights for managers of export-oriented firms, particularly in emerging markets.
Cultivating Green Collaborative Creativity as a Core Competency
Green and inclusive creativity is one of the most influential and consistent drivers of corporate social responsibility differentiation. Managers should prioritize the development of an internal organizational culture that systematically fosters ecological innovation and inclusivity across functional boundaries. This involves creating collaborative mechanisms that connect departments, rewarding employees for proposing eco-innovative solutions, and ensuring that sustainability-oriented thinking becomes an integral part of daily operations. Encouraging employee empowerment at all organizational levels enhances ownership of sustainability initiatives, positioning green-oriented creativity not as an auxiliary function but as a central source of sustainable competitive advantage.
Leveraging Digital Tools for Transparency and Strategic Integration
The adoption of digital tools to enhance transparency in product-level CSR represents an essential initial step toward sustainable transformation. However, the managerial opportunity extends far beyond transparency alone. Firms should strive to achieve deeper integration of Digital Readiness by embedding advanced technologies across operations to systemically reinforce CSR outcomes and organizational performance. Artificial Intelligence (AI) and the Internet of Things (IoT) can be deployed to optimize resource utilization and predictive maintenance and minimize waste and energy consumption. Blockchain can ensure supply chain traceability and ethical sourcing by recording immutable transactions. Digital platforms can also support more meaningful stakeholder engagement, enabling firms to communicate CSR achievements transparently and build trust with both customers and investors.
Leveraging CSR as a Strategic Shield in Dysfunctional Markets
In business environments characterized by unfair competition, weak regulatory enforcement, or unethical market behavior, CSR can function as a strategic defense mechanism. Firms that visibly commit to ethical practices, transparency, and sustainability can differentiate themselves in such dysfunctional markets. A robust CSR reputation not only helps build trust with international partners and socially conscious consumers but also reduces reputational and operational risks. By adopting socially responsible conduct as a strategic asset, companies can strengthen their legitimacy, enhance resilience, and maintain a favorable position amid challenging competitive dynamics.
Proactively Engaging With Government Support and Policy Alignment
Firms should move beyond passive compliance with state policies and instead engage proactively with government initiatives that promote sustainability. This entails identifying and leveraging available subsidies, tax incentives, and eco-friendly policy frameworks designed to advance green innovation. Actively participating in government-led capacity-building programs can also strengthen organizational competitiveness and technological maturity. Aligning corporate CSR strategies with national and regional sustainability agendas reinforces the firm–government relationship, enhances institutional legitimacy, and contributes to broader socio-environmental objectives. Such synergistic engagement ensures that CSR is not pursued in isolation but becomes an integral element of a collaborative, sustainable economic ecosystem.
Conclusion
This research provides valuable insights into the pragmatic implications of corporate social responsibility for policymakers, business managers, and stakeholders operating in emerging economies. The findings affirm that CSR adoption is strongly supported by institutional mechanisms and government intervention. Targeted subsidy programs, when aligned with specific sectoral needs, can optimize financial resource allocation and ensure that firms implement sustainable and socially responsible practices effectively. By synchronizing policy incentives with industry priorities, legislators can stimulate CSR-related investments and nurture a more ethical and sustainable corporate environment.
For businesses seeking long-term growth and export competitiveness, integrating CSR into strategic planning is essential. Firms should cultivate a culture of environmentally conscious creativity that fosters cross-departmental knowledge sharing and continuous innovation. Encouraging employee participation in sustainability-driven idea generation and problem-solving can grant firms a significant competitive advantage in global markets. In highly competitive or dysfunctional market contexts, CSR should be viewed not merely as a compliance mechanism but as a strategic instrument for differentiation, reputation enhancement, and risk mitigation. Through socially responsible initiatives, firms can strengthen relationships with customers, investors, and regulatory agencies while bolstering brand equity and international credibility.
In parallel, companies must enhance their digital readiness to reinforce CSR execution. Although this study found limited direct effects of digital capability, digital integration can substantially improve transparency, supply chain sustainability, and stakeholder engagement. Investing in digital infrastructure and employee training is thus crucial to increase the organizational efficiency of CSR-related technologies. Collectively, these insights emphasize that a holistic CSR strategy—supported by government frameworks, internal innovation, and digital transformation—can help firms sustain competitiveness, build stakeholder trust, and ensure long-term success in international markets.
While this study provides valuable insights, its limitations offer clear directions for future research. First, our data were collected from a single country, Vietnam. Although this provides a much-needed perspective from a key emerging economy, the generalizability of our findings to other institutional and cultural contexts remains an open question. Future research should test the validity of our model across a diverse range of emerging and developed markets. Second, our study relied on cross-sectional data, which capture a snapshot in time. A longitudinal research design would be invaluable for understanding how the drivers of CSR strategy evolve as firms mature, as industries change, and as institutional environments develop. Finally, our measures for constructs such as “Green Collaborative Culture” and “Dysfunctional Competition” rely on the perceptual data obtained from managers. While this is a standard and valid approach, future work could complement such data with more objective indicators, such as patent filings for green technologies, documented instances of unfair trade practices, or third-party audits of CSR performance. Such multi-method approaches would provide an even more robust validation of the proposed relationships.
Footnotes
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Data Availability Statement
Data sharing not applicable to this article as no datasets were generated or analyzed during the current study.