Impact of CSR news reports on firm value
Asia Pacific Journal of Marketing and Logistics
ISSN: 1355-5855
Article publication date: 1 April 2020
Issue publication date: 1 April 2020
Abstract
Purpose
This study clarifies the relationship between corporate social responsibility (CSR) news reports and firm value and identifies the mechanisms that constitute this relationship. Specifically, it identifies the roles of word of mouth (WOM) and traditional advertising in this relationship.
Design/methodology/approach
The data set used for the analysis covers 77 firms in Korea from 2012 to 2015. The random-effects model is applied to verify three hypotheses. Using a three-step regression analysis and the Sobel test, this study reveals the roles of WOM and advertising expenditure in the relationship between CSR news reports and firm value.
Findings
CSR news reports positively affect firm value, and this relationship is mediated by WOM and moderated by advertising expenditure. Notably, the positive effect of WOM on firm value is stronger for companies that spend less on advertising.
Practical implications
The evidence implies that marketing managers could benefit from not only conducting CSR activities but also widely publicizing them. CSR news reports could help companies enhance public awareness of and interest in them.
Originality/value
This is the first study to investigate the influence of CSR news reports using empirical data in Korea.
Keywords
Acknowledgements
This work was supported by the Institute of Industrial Relations, Seoul National University.
Citation
Seok, J., Lee, Y. and Kim, B.-D. (2020), "Impact of CSR news reports on firm value", Asia Pacific Journal of Marketing and Logistics, Vol. 32 No. 3, pp. 644-663. https://doi.org/10.1108/APJML-06-2019-0352
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited