The impact of corporate social responsibility on brand equity

Abstract

Purpose

Despite the significant investment in research on corporate social responsibility (CSR), there still exists a lack of clarity in terms of how different types of CSR activities lead to the outcomes a firm desires with their investment in CSR. The purpose of this paper is to provide greater insight on the relationship between types of CSR activities and brand equity (BE). The authors develop and test a conceptual framework, which examines the unique relationship between each CSR dimension and BE, as well as the interaction of product-related CSR activities and employee-related CSR activities with CSR activities across the other dimensions.

Design/methodology/approach

The authors collected data from multiple secondary sources, including Kinder, Lydenberg and Domini (KLD) Research and Analytics Inc., Interbrand, Compustat and CMR. The authors used random-effect estimations to estimate panel regressions of BE as a function of the different dimensions of a firm’s CSR, interaction terms between CSR dimensions and product quality and interaction terms between employee relations and other CSR dimensions, as well as a set of control variables and Year dummy variables.

Findings

Based upon a large-scale panel data set including 78 firms for the period of 2000–2014, the results show that diversity- and governance-related CSR have a positive effect on BE, employee-related CSR has a negative effect on BE and both product and employee dimensions play important roles in the relationships between other CSR dimensions and BE. These results have important implications for both theory and practice.

Originality/value

This study makes several contributions to extant literature on CSR and brand strength. First, this study examines the impact of CSR on BE vs alternative measures of brand-related outcomes. This study uses the KLD database to determine scores for firm CSR activity. It is the first to use the extensive KLD database to examine the relationship between types of CSR activities and BE. Last, this study seeks to better understand some of the organizational factors which influence the success of CSR outcomes. Specifically, the research will examine the interaction of product-related and employee-related CSR activities with CSR activities across the other dimensions.

Citation

Yang, J. and Basile, K. (2019), "The impact of corporate social responsibility on brand equity", Marketing Intelligence & Planning, Vol. 37 No. 1, pp. 2-17. https://doi.org/10.1108/MIP-02-2018-0051