Corporate Social Responsibility, Customer Satisfaction, and Market Value

Journal of Marketing, 70 (4), 1-18, 2006

19 Pages Posted: 5 May 2013

See all articles by Xueming Luo

Xueming Luo

Temple University

CB Bhattacharya

European School of Management and Technology (ESMT); Katz Graduate School of Business University of Pittsburgh

Date Written: 2006

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.

JEL Classification: M21, M31, G00, G12, L86, M00, M30, M14

Suggested Citation

Luo, Xueming and Bhattacharya, Chitrabhanu, Corporate Social Responsibility, Customer Satisfaction, and Market Value (2006). Journal of Marketing, 70 (4), 1-18, 2006. Available at SSRN: https://ssrn.com/abstract=2260523

Xueming Luo (Contact Author)

Temple University ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

HOME PAGE: http://www.fox.temple.edu/mcm_people/xueming-luo/

Chitrabhanu Bhattacharya

European School of Management and Technology (ESMT) ( email )

Schlossplatz 1
10117 Berlin
Germany

Katz Graduate School of Business University of Pittsburgh ( email )

Pittsburgh, PA
United States
4123834212 (Phone)

HOME PAGE: http://www.business.pitt.edu/faculty/bhattacharya

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