Does Environmental Regulation Contribute to CSR of Cameroonian’s SMEs, or Does It Rather Develop “Free Riders” Who Employ Psychological Defense Mechanisms? Empirical Evidence Based on a Multivariate Probit Approach

This paper investigates the influence of environmental regulations on the adoption of Corporate Social Responsibility practices among Small and Medium-sized Enterprises in Cameroon. It specifically examines the role of psychological defense mechanisms in shaping these practices. Based on a survey of 680 Cameroonian SMEs conducted via KoboCollect, this research explores the relationship between environmental regulations and the adoption of CSR practices, paying particular attention to the psychological defenses that may influence these decisions. A multivariate probit model was employed to examine the relationship between philanthropic CSR and environmental expenditures. The results indicate a significant positive correlation, suggesting that increased philanthropic CSR is associated with higher budgets for environmental protection and pollution reduction. Subsequently, our findings demonstrate that budgets allocated to environmental protection, pollution reduction, and compliance with environmental regulations all have a positive and significant impact on the environmental performance of the firms examined. Finally, the company’s internal social policy seems to play a pivotal role in the adoption of environmental practices. Conversely, CSR communication and social interaction do not appear to have a significant impact on the environmental performance indicators studied. This result can be explained by the fact that communication and social interaction are not ends in themselves, but rather means of reinforcing other dimensions of CSR. However, introducing the concept of psychological defense mechanisms, with a particular focus on rationalization, “it is necessary” to highlight the importance of the underlying motivations of entrepreneurial behavior. While rationalization does not appear to directly affect overall performance, it reveals tensions between regulatory compliance and genuine commitment to the environment.