The varying effect of community, environmental, employee and product social responsibility on

The varying effect of community, environmental,

employee and product social responsibility on

sales, profit and brand equity

Johan van Abbema Thesis defense

Msc Marketing Intelligence & Management Theme: CSR: More than a Marketing Tool?

First supervisor: Dr. A. Bhattacharya Second supervisor: Dr. J. van Doorn

 Firms have to make trade-offs in engaging and managing different CSR types due to the limited capital resources (Godfrey and Hatch, 2007)

 Lack of literature about the effect of CSR types on

financial performances. Only two papers:

Jayachandran et al., 2013; Mishra and Modi, 2016

 What is the influence of CSR types on sales, profit and brand equity?

 4 different CSR types: community, environmental, employee and product social responsibility

 Remaining CSR types (human rights, diversity and

corporate governance) not included>prevent that paper would be too complex

 Dependent variables: sales, profit, brand equity

 Independent variables: environment-, employee-,

community- and product-based CSR

 Control variables: total assets, advertising, R&D,

industry dummies, long-term debts to total capital and years of CSR

 4 models are performed: ordinary least squares, generalized least squares, fixed effects model and random effects model

 Fixed and random effects model are preferred, since

those models are able to handle panel data.

Hypotheses Estimates Relationship P-value Significant R2

DV: sales (results from the random effects model) 0.164

H1a (environment) -256.66 + 0.767 No

H1c (employee) 1243.65 + 0.002 Yes

H1e (product) 1604.04 + 0.005 Yes

H1g (community) 942.40 + 0.254 No

DV: profit (results from the fixed effects model) 0.138

H1b (environment) 86.51 + 0.708 No

H1d (employee) 100.46 + 0.177 No

H1f (product) 109.69 - 0.491 No

H1h (community) -194.17 ∩ 0.341 No

DV: brand equity (results from the random effects model) 0.281

2a (environment) -0.08 + 0.09 Yes

2b (employee) -0.04 + 0.113 No

2c (product) 0.10 + 0.024 Yes

2d (community) 0.05 + 0.412 No

Results

 Paper contributes to CSR literature

 Only 4 of 12 hypotheses significant> CSR in general

and CSR types do not have similar influence on firm performances

 Employee- and product-based CSR efforts results in increasing sales. No significant relationship between CSR types and profit> increasing costs mitigates the positive effect on revenue

 Product-based CSR to enhance their brand equity

 Negative relationship between environmental-based

CSR and brand equity