Government Grants and CSR for Employees: Evidence from Vietnam’s SMEs

This article explores the relationship between government grants and CSR activities for employees. The panel dataset of SMEs provides evidence of a statistically significant positive effect of government grants in terms of financial on CSR for employees (trade union, social insurance, health insurance, maternity leave, and retirement). However, government grants in terms of training supports and trade promotion have negative impact on employees welfares. This result implies that the government can indirectly enhance employee welfares (CSR for employees) through direct financial grants to firm operations. In other words, businesses that receive financial grants are able to operate more efficiently, thereby, employees also receive more welfares. Besides, the training and trade promotion grants policies should be strictly controlled.