Branding through responsibility: the advertising impact of CSR activities in the Korean instant noodles market

Abstract

This paper empirically examines the extent to which a favorable corporate image, shaped by social contributions, influences consumer choice and firm sales. Using data on corporate social responsibility (CSR) media coverage in the Korean instant noodle market during the 2010s, we find evidence that the distinctive CSR activities and resulting media coverage of Ottogi---one of the country's largest instant noodle producers---positively affected the consumer utility derived from the firm's products. Consequently, Ottogi's annual sales of its major brands increased by an average of 18.7 million packages (or 5.6%). This effect is comparable in magnitude to that of a nearly 50% increase in advertising spending. Our findings suggest that CSR can foster firm growth by boosting product sales.

Keywords: Corporate image, CSR, Nested Logit, Instant noodles

JEL Classification: D12, L66, M14