Ethical Leadership and CSR Engagement in SMEs: Sequential Mediation of Trust and Organizational Commitment Across Pakistan, India, and Taiwan

Abstract

This study examines how ethical leadership promotes employees’ corporate social responsibility (CSR) engagement in small- and medium-sized enterprises (SMEs) through a sequential mechanism of Trust in leadership and organizational commitment, and whether this process differs across national contexts. Survey data were collected from SME employees in Pakistan (n = 102), India (n = 70), and Taiwan (n = 96). Using a multi-group partial least squares structural equation modeling (PLS-SEM) approach with bootstrapping, we test direct, indirect, sequential mediation, and moderation effects linked to national culture (collectivism) and institutional support. Results show that ethical leadership has a positive direct effect on CSR engagement and an additional indirect effect via Trust in leadership and organizational commitment. The strength of these relationships varies across the three countries, underscoring the importance of cultural and institutional conditions when translating leadership ethics into CSR-oriented behaviors. The findings extend CSR micro foundations in SMEs and offer actionable guidance for leadership development and policy support in emerging and advanced economies.