Beyond Warm Glow: The Risk-Mitigating Effect of Corporate Social Responsibility (CSR)

Abhi Bhattacharya, Valerie Good, Hanieh Sardashti, John Peloza*

*Corresponding author for this work

    Research output: Contribution to journalArticleAcademicpeer-review

    6 Citations (Scopus)
    12 Downloads (Pure)

    Abstract

    Corporate social responsibility (CSR) positively impacts relationships between firms and customers. Previous research construes this as an outcome of customers’ warm glow that results from supporting firms’ benevolence. The current research demonstrates that beyond warm glow, CSR positively impacts firms’ sales through mitigating their customers’ perceptions of purchase risk. We demonstrate this effect across three conditions in which customers’ perceived risk of purchase is heightened, using both secondary data and two lab experiments. Under conditions of greater purchase risk (i.e., recessions, a service context, and longer-term consumer commitments), CSR positively impacts both sales and customer purchase intentions to a greater extent than in conditions of lower purchase risk. In addition to measuring purchase risk as the mediating process behind these effects, we demonstrate that the effect of CSR on sales is stronger for those CSR activities that signal a stakeholder orientation.

    Original languageEnglish
    Pages (from-to)317–336
    Number of pages20
    JournalJournal of Business Ethics
    Volume171
    Early online date27-Jan-2020
    DOIs
    Publication statusPublished - 2021

    Keywords

    • SIGNALING THEORY
    • BRAND EQUITY
    • CUSTOMER SATISFACTION
    • MODERATING ROLE
    • MARKET SHARE
    • CREATE VALUE
    • CONSUMER
    • IMPACT
    • MANAGEMENT
    • FIRMS

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