Corporate Social Responsibility, Customer Satisfaction, and Market Value

Abstract

Although prior research has addressed the influence of corporate social responsibility (CSR) on perceived customer responses, it is not clear whether CSR affects market value of the firm. This study develops and tests a conceptual framework, which predicts that (1) customer satisfaction partially mediates the relationship between CSR and firm market value (i.e., Tobin's q and stock return), (2) corporate abilities (innovativeness capability and product quality) moderate the financial returns to CSR, and (3) these moderated relationships are mediated by customer satisfaction. Based on a large-scale secondary data set, the results show support for this framework. Notably, the authors find that in firms with low innovativeness capability, CSR actually reduces customer satisfaction levels and, through the lowered satisfaction, harms market value. The uncovered mediated and asymmetrically moderated results offer important implications for marketing theory and practice.

Is doing good good for you? how corporate charitable contributions enhance revenue growth

“…Luo and Bhattacharya (2006) report that corporate social responsibility, as measured by Fortune's annual subjective ranking of the 'most admired companies,' is positively associated with customer satisfaction. In addition, prior research (e.g., Anderson, Fornell, and Lehmann, 1994;Ittner and Larcker, 1998) demonstrates that customer satisfaction is associated with future financial performance.…”

The impact of corporate social responsibility on customer attitudes and retention—the moderating role of brand success indicators

“…Consumers may have a lay theory that company resources are zero-sum, implying that resources that are invested in improving a company's CSR record are diverted from strengthening a company's market position and improving a company's products and/or services (Newman et al 2014). Therefore, consumers may perceive that less successful companies' engagement in CSR comes at the expense of developing stronger corporate abilities (Luo and Bhattacharya 2006), and reason that only successful companies possess sufficient slack resources to invest in CSR (Kang et al 2016). This line of reasoning is supported by literature cautioning that CSR efforts of less innovative companies may be interpreted as focusing on the wrong priorities (Luo and Bhattacharya 2006;Newman et al 2014).…”

“…Therefore, consumers may perceive that less successful companies' engagement in CSR comes at the expense of developing stronger corporate abilities (Luo and Bhattacharya 2006), and reason that only successful companies possess sufficient slack resources to invest in CSR (Kang et al 2016). This line of reasoning is supported by literature cautioning that CSR efforts of less innovative companies may be interpreted as focusing on the wrong priorities (Luo and Bhattacharya 2006;Newman et al 2014). Engaging in CSR may then reinforce company success and improve customer attitude and retention, particularly toward already successful companies.…”

How corporate social responsibility can effect on the consumers` attitude and behavior?: a conceptual study

“…This study depends on social trade hypothesis to clarify the impact of CSR on purchaser conduct and disposition. Most of the past researchers examined the immediate connection between saw CSR and customer practices and/or utilized social character system to clarify this connection (Luo and Bhattacharya, 2006;Sen et al, 2006). It is investigated that contrasted with social personality, social trade better clarifies the relationship in the middle of CSR and buyers.…”

“…The principle target of this exploration is to provide relationship between corporate social responsibility to consumers behavior and to give impact of CSR on buyer demeanor and consumer behavior which helps firms to keep up their techniques as indicated by this investigation. The CSR has get to be standard (Franklin, 2008), While CSR gives backing to noble motivations, organizations rehearse it as much to build perceive ability as to make social effect, and put vigorously in great activities as well as in imparting them (Luo and Bhattacharya, 2006). In this regard, altruistic commitments, or after that propelled battle advertise them.…”