Does CSR Implementation Transfer into Better Performance?- Empirical Evidence from Chinese Construction SMEs

Due to acute resource constraints and environmental turbulence, many small and medium-sized construction enterprises (SMEs) prioritize short-term survival over corporate social responsibility (CSR) initiatives. Grounded in social exchange theory (SET), this study investigates how CSR implementation drives financial performance (FP) via the mediating role of non-financial performance (NP), aiming to deconstruct the “psychological black box” of this transformation. Drawing on a sequential mixed-methods design involving PLS-SEM analysis of 380 responses and 10 semi-structured interviews, the results confirm that CSR practices, particularly ethical practices and community engagement, can be effectively translated into improved NP, which acts as a vital strategic conduit for enhancing FP. However, skills development and training showed limited immediate impact due to a systemic “digital mismatch” and significant time-lag effects. Theoretically, this research refines SET by identifying a hierarchical transition where socio-emotional assets serve as compensatory resources in volatile and resource-constrained environments. Practically, the findings offer a strategic roadmap for SMEs to mitigate technological and systemic barriers, providing novel pathways for fostering CSR to achieve sustainable growth.