Abstract
The influence of corporate social responsibility (CSR) on employees' positive psychological capital in stressful situations remains unexplored in the literature for small and medium enterprises (SMEs). This study aims to examine how CSR could assist employees in developing psychological capital during the COVID-19 pandemic. In order to understand the aforesaid relationship, an attempt is made to study the mediation effect of affective commitment. Structural equation modelling (AMOS 21.0) was used for data analysis and hypothesis testing on a sample of 545 employees from 356 Malaysian SMEs. The results of this study showed that SMEs' CSR policies helped to improve the positive psychological capital of their employees during the COVID-19 pandemic. Also, affective commitment complementary mediates the relationship between CSR and psychological capital. During the COVID-19 pandemic, SMEs should come up with a consistent way to implement CSR policies and procedures to improve employees' psychological capital and increase their affective commitment toward the enterprise. There are two main contributions to the literature from this study, in addition to enriching previous empirical research on CSR. As a first contribution to the CSR literature, it examines how CSR impacts employees' psychological capital during a pandemic. COVID-19 is one of the recent pandemics that offers an opportunity to examine its effects on employee psychological state. Secondly, the results of the study add to the growing body of empirical research that supports affective commitment's significant relationship with CSR and enhances employees' psychological capital during a pandemic in a developing market.