Effect of Corporate Social Responsibility Practice on Sustainable Development: Evidence from Leather Factories in Lume District, Oromia, Ethiopia

Abstract

This study aims to investigate the effects of corporate social responsibility (CSR) practices on sustainable development (SD) in the leather factories operating in Oromia, Lume district. To address the aims of the research, a cross-sectional quantitative method was used. Data
were gathered from 256 samples with 91% response rate. Data were analyzed using descriptive, correlation, and ordinal logistic regression analyses using SPSS version 16 and Jamovi version 2.6.44. Data analysis shows that leather factories are playing their economic and discretionary responsibilities, but low emphasis was given to legal and ethical responsibility practices. Correlation analysis reveals that economic, legal, ethical, and discretionary responsibility practices are significantly and positively associated with SD. Besides, the effects of CSR practices on SD were examined. The result revealed that economic, legal, ethical, and discretionary responsibility practices have a significant and positive effect on sustainable development (β=1.41, 1.24, 1.10, 0.635, and p-value <0.001), respectively. Further, it is found that CSR practices explains 18% variations in sustainable development. Thus, the researchers suggest that the government and other concerned bodies have to play their part to engage Lume leather factories in CSR practices through creating awareness, engaging stakeholders, and law enforcement to ensure SD.