PESTEL Analysis of External Factors Influencing CSR Performance Toward Sustainable Development: Evidence from Small and Medium Construction Enterprises

Corporate social responsibility (CSR) plays a critical role in promoting sustainable development in the construction industry. However, existing PESTEL-based studies have predominantly focused on large construction firms, and empirical evidence on how macro-environmental factors influence CSR performance in construction small and medium-sized enterprises (SMEs) remains limited, particularly in emerging economies. To address this gap, this study integrates the PESTEL framework with stakeholder and contingency theories to quantify the effects of political, economic, social, technological, environmental, and legal external forces on CSR performance in Chinese construction SMEs. Based on 380 valid survey responses and analyzed using partial least squares structural equation modeling (PLS-SEM), the findings reveal that political, economic, and social factors exert the strongest positive effects on CSR performance, while legal factors have a moderate influence. Technological and environmental pressures, although statistically significant, exhibit comparatively weaker impacts, which reflects construction SMEs’ limited financial and absorptive capability, fragmented workflows, and uneven institutional enforcement. Theoretically, this study extends stakeholder and contingency theories by showing that, in emerging-economy construction SMEs, CSR performance is driven primarily by coercive power and institutional legitimacy, and that the effects of macro-environmental pressures are conditional on firm-specific capacities. Practically, the findings suggest that effective CSR promotion requires combining political mandates with capacity-building policies, targeted financing, and SME-oriented technological and environmental support.