Corporate Social Responsibility for Gaining Competitive Advantage of Private Commercial Banks in Myanmar

Abstract

This study, titled Corporate Social Responsibility for Gaining Competitive Advantage of Private Commercial Banks in Myanmar, examines how CSR practices contribute to competitive advantage in the country’s banking sector, which is undergoing rapid modernization and heightened competition. Drawing on the adapted conceptual model of Eyasu and Arefayne (2020), the research had two objectives: (i) to identify the CSR practices of private commercial banks in Myanmar and (ii) to analyze the impact of CSR for Environment, CSR for Local Community, and CSR for Customers on competitive advantage. A quantitative research design was applied, with data collected through a structured questionnaire administered to 250 banking customers across multiple private commercial banks using convenience sampling. The survey items were adapted from established literature, and data analysis involved descriptive statistics, correlation, and multiple regression analysis. Reliability and validity tests confirmed the robustness of the scales. The findings revealed a strong positive correlation between CSR practices and competitive advantage. Among the predictors, CSR for Customers was the most influential, highlighting the importance of transparent practices, fair pricing, and inclusive financial products. CSR for Local Community ranked second, reflecting the impact of education, healthcare, and community programs. CSR for Environment, though significant, had the least effect. Overall, the study affirms that customer-focused and community-oriented CSR initiatives are key drivers of competitive advantage in Myanmar’s private banking sector.

Keywords – Private Commercial Banks; Myanmar; Corporate Social Responsibility; CSR for Environment; CSR for Local Community; CSR for Customers; Competitive Advantage

1. Introduction

The concept of Corporate Social Responsibility (CSR) has developed over thousands of years and is now widely recognized as a core business practice across the globe. Governments, nongovernmental organizations, and businesses increasingly regard CSR as central to discussions about ethical and sustainable development. The importance of CSR lies in balancing the economic benefits of business activity, such as wealth creation and job opportunities, with the negative impacts on the environment and human health. By adopting socially responsible practices, companies can reduce harm while also gaining competitive benefits, including stronger customer loyalty, higher employee commitment, and increased public trust. These factors contribute to long-term competitive advantage, making CSR a critical strategy for differentiation in highly competitive markets. In Myanmar, this holds particular importance given the country’s underdeveloped financial system, marked by historical instability, inflation, bank runs, insider lending, and widespread public mistrust. Despite ongoing reforms, including steps toward greater transparency by the Central Bank of Myanmar (CBM), less than 10% of the population holds a bank account, while reliance on informal systems, black markets, and unregulated remittance channels remains high. However, with rapid growth in the global fintech industry, Myanmar’s banking sector is experiencing new opportunities for digital transformation. In this transitional environment, CSR emerges as a key mechanism for banks to build trust, attract customers, and foster loyalty in a market where credibility and stability are highly valued.