The Influence of Corporate Social Responsibility on competitive advantage of food and beverage manufacturing firms in Kenya

Abstract

Corporate social responsibility has increasingly been recognized as a strategic mechanism through which firms can enhance their competitive positioning; however, in the food and beverage manufacturing sector in Kenya, there remains limited clarity on how specific dimensions of CSR translate into measurable competitive advantage. While firms are under growing pressure to comply with regulatory standards, meet stakeholder expectations, and engage in social initiatives, the extent to which these efforts contribute to improved product quality, brand image, customer loyalty, and market share remains insufficiently understood. This study therefore examined the effect of corporate social responsibility on competitive advantage among food and beverage manufacturing firms in Kenya, focusing on four dimensions: economic, legal, ethical, and discretionary responsibilities. Competitive advantage was operationalized using non-financial indicators, namely product quality, brand image, customer loyalty, and market share. Guided by Carroll’s CSR Pyramid Model, which underpins the multidimensional nature of CSR, and the Resource-Based View theory, which explains how CSR can be transformed into strategic capabilities, the study adopted a positivist research philosophy and a descriptive cross-sectional survey design. The target population comprised all 217 food and beverage manufacturing firms registered with the Kenya Association of Manufacturers. The unit of analysis was the firm, while the unit of observation consisted of three respondents per firm drawn purposively from senior management, marketing or corporate affairs, and quality assurance or compliance functions, yielding a total sample size of 651 respondents. Data was collected using a structured questionnaire measured on a five-point Likert scale and analyzed using descriptive and inferential statistics. Out of the 651 questionnaires distributed, 422 were returned, representing a response rate of 64.8 percent. The regression results indicated that the CSR dimensions jointly explained a substantial proportion of the variation in competitive advantage (R² = 0.776), and the model was statistically significant (F = 361.764, p < 0.001). All CSR dimensions were found to have positive and significant effects on competitive advantage, with legal responsibility emerging as the strongest predictor, followed by economic, ethical, and discretionary responsibilities. The study concludes that CSR contributes significantly to competitive advantage, particularly through regulatory compliance, operational efficiency, and ethical business practices. Based on these findings, the study recommends that firms prioritize compliance and efficiency-oriented CSR practices while strengthening ethical and discretionary initiatives to enhance customer trust and long-term competitiveness, and that policymakers reinforce enforcement of industry standards to support fair competition. The study further suggests that future research should adopt longitudinal designs to capture dynamic effects of CSR over time and incorporate financial performance indicators to complement non-financial measures of competitive advantage.