Economists Name Best Practices of Corporate Social Responsibility in COVID Crisis

The COVID-19 pandemic has had a major impact on the economy. Researchers analyze the changes that have taken place in the economy, identify successful and failed strategies, and study all aspects of economic development. RUDN economists studied how corporate social responsibility proved itself in a crisis and found out whether companies can reduce trading risks in an era of crisis. Using the example of the member states of the Eurasian Economic Union (EEU), the researchers named the best practices of socially responsible companies, which, perhaps, should be adopted by other developing countries.

“The COVID-19 pandemic has become a threat to the sustainable development of the EEU and has caused uncertainty in terms of corporate social responsibility management. We assumed that companies from developing countries demonstrate low corporate social responsibility. To test this, we identified the trade risks of the EEU member states in the era of COVID-19 and determined how corporate social responsibility contributes to managing these risks,” said Inna Andronova, Doctor of Economics, Head of the Department of International Economic Relations, RUDN University.

Economists studied two years of data using statistical methods to identify trading risks and find how corporate social responsibility helps mitigate them. Members of the EEU were unable to take measures to manage the socio-economic consequences of the pandemic. At the state level, the measures related directly to the fight with virus (providing people with medical care, equipment, etc.), and at the international level – bans on the import and export of goods. Low-income countries that depend heavily on trade have found themselves economically vulnerable. Government decisions did not always take into account the interests of producers. The unsynchronized measures of the EEU members reduced mutual trade in goods for which demand exceeded supply.

At the same time, RUDN University economists named the best practices of companies in terms of social responsibility. Among them were the creation of a reserve of production capacities, the flexibility of business processes, readiness for import substitution, marketing support for domestic sales, the decision not to fire employees with flexible employment.

“The good practices of the EEC member states can be useful for companies from other developing countries. However, it should be emphasized that developing countries are very different from each other, and we have considered only the best practices of the EEU members. Replication of this experience may not provide the same high efficiency. Therefore, it is advisable to take into account the best practices of developing countries, especially the countries of Asia, South America and Africa,” said Inna Andronova, Doctor of Economics, Head of the Department of International Economic Relations of the Peoples’ Friendship University of Russia.