Fair Trade Practices for Fighting in Emerging Countries

Abstract

Fair trade is a concept that is becoming increasingly ingrained in consumers. This means that companies that are committed to the development of fair-trade policies can find here a source of competitive advantage. Likewise, these practices will favour many producers in the primary sector, which could turn this into an effective way of fighting poverty. The aim of this research is to find out how fair trade has an impact on company results. To this end, managers from 102 companies in an emerging economy (Peru) are analysed. PLS-SEM is used for this analysis. The results indicate that there is a mediating effect of fair trade on the relationship between corporate social responsibility and company performance. However, significant differences have been found compared to developed economies. These results provide insight into emerging economy managers' assessments of responsible business practices.