ABSTRACT
This chapter aims at narrowing the knowledge gap on corporate social responsibility (CSR) and firm performance in developing countries. It reviews the main theoretical hypotheses linking CSR and firm performance and provides an overview of the existing empirical evidence in both advanced and developing economies. The chapter discusses the econometric methodology adopted. It also provides details on the data employed together with some descriptive statistics. The chapter also discusses the prevalence of CSR activities across six Latin American countries and the impact on a selected measure of firms’ performance, namely their revenues. The impact of CSR on firm performance has been theoretically and empirically analysed under the spectrum of two alternative hypotheses, namely: “the social impact” and “the shift of focus” hypothesis. However, firms in developing countries have had a mixed reaction to the increasing popularity of CSR. Thus, a better understanding of the effects of CSR in developing countries appears of great policy relevance.
