CSR and financial performance with a mediating effect of brand value: an exploration of the role of geographic location and industry setting
thesisposted on 28.03.2022, 02:31 authored by Petra Bouvain
Corporate social responsibility (CSR) and brand issues are generating interest amongst practitioners and researchers at the global level. This thesis attempts to capture some of the major issues in the realm of the relationship between a firm's corporate social performance (CSP), corporate financial performance (CFP) and brand value, making a contribution to the CSR and branding literature by linking the two seemingly separate streams of literature. Differences between regions, levels of development and industry sector differences are shown to impact on the relationship. Three papers were developed with the first one demonstrating that brand value is positively related to CSR in a sample of 84 major banks from East Asia and the US. That paper shows that different CSR factors are linked to brand value for firms in the US compared to those in East Asia, using ANOVA and multiple regressions. The second paper extends this research and investigates 335 banks from both developed and emerging economies and demonstrates differences in the relationship between CSR variables, brand value and market capitalisation. This paper highlights the challenges that the banking sector faces in the community, employment, governance and environmental areas. The third paper is a multi-industry study with a sample of 627 companies from developed as well as emerging economies, including from the fast growing BRICS (Brazil, Russia, India, China and South Africa). The results, based on structural equation modelling, showed that a relationship between CSP, brand value and CFP was only found for firms in developed countries. Possible explanations for these differences are attributed to institutional as well as cultural differences, and manifest in divergence, convergence and crossvergence. The overarching notion of this thesis is that 'doing good will lead to financial rewards' and as such supports the business case for CSR as advocated by Carroll and Shabana (2010) and Porter and Kramer (2006). However, the study only found partial empirical evidence for the aforementioned notion, namely for firms based in developed countries.