Do trust and corporate social responsibility activities affect purchase intentions? An examination using structural equation modeling
-
DOIhttp://dx.doi.org/10.21511/im.16(4).2020.06
-
Article InfoVolume 16 2020, Issue #4, pp. 62-73
- Cited by
- 1115 Views
-
216 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Organizations place great value on corporate social responsibility (CSR), as it has been found to influence customer attitudes and intentions. This study analyzed the impact of CSR on consumers’ purchase intentions. The significance of this study arises from the fact that all progressive companies are increasing their expenditure on CSR activities. In this study, purchase intention was considered as a dependent variable, while trust, ethical, and legal CSR activities were the independent variables. Data for the study was collected from 210 randomly chosen respondents from amongst consumers of Delhi and National Capital Region of India. The data, analyzed using Structural Equation Modeling, found that trust, ethics, and legal CSR activities directly impacted consumer purchase intentions. These results indicate that legal factors do not significantly influence the corporate decision on spending on CSR activities. On the other hand, ethical factors and trust factors significantly influence the corporate decision on expenditure on CSR activities. The findings highlight companies’ requirements to be conscious of their social image. Probable limitations of the study could include sample size and the number of variables chosen.
- Keywords
-
JEL Classification (Paper profile tab)M14, M31, M38
-
References69
-
Tables4
-
Figures3
-
- Figure 1. Research model
- Figure 1A. SEM output
- Figure A2. CFA output
-
- Table 1. Demographic profile
- Table 2. Construct validity and reliability
- Table 3. Discriminant validity
- Table 4. Hypotheses testing
-
- Aguinis, H. (2011). Organizational responsibility: Doing good and doing well. In APA handbook of industrial and organizational psychology, Vol 3: Maintaining, expanding, and contracting the organization (Vol. 3, pp. 855-879). American Psychological Association.
- Ahmed, I., Nazir, M. S., Ali, I., Nurunnabi, M., Khalid, A., & Shaukat, M. Z. (2020). Investing In CSR Pays You Back in Many Ways! The Case of Perceptual, Attitudinal and Behavioral Outcomes of Customers. Sustainability, 12(3), 1158.
- Albus, H. (2012). The Effects Of Corporate Social Responsibility On Service Recovery Evaluations In Casual Dining Restaurants. Electronic Theses and Dissertations, 2004-2019.
- Bae, J., & Kim, S. (2013). The influence of cultural aspects on public perception of the importance of CSR activity and purchase intention in Korea. Asian Journal of Communication, 23(1), 68-85.
- Barcelos, E. M. B., de Paula Baptista, P., Maffezzolli, E. C. F., da Silva, W. V., Zancan, R., & Marchetti, C. (2015). Relationship between an organization evaluated as being socially responsible and the satisfaction, trust and loyalty of its clients. Australian Journal of Basic and Applied Sciences, 9(7), 429-438.
- Bhattacharya, C. B., Korschun, D., & Sen, S. (2009). Strengthening Stakeholder – Company Relationships Through Mutually Beneficial Corporate Social Responsibility Initiatives. Journal of Business Ethics, 85(2), 257-272.
- Carroll, A. B. (1979). A three-dimensional conceptual model of corporate performance. Academy of Management Review, 4(4), 497-505.
- Carroll, A. B. (1991). Corporate social performance measurement: A commentary on methods for evaluating an elusive construct. Research in Corporate Social Performance and Policy, 12(42), 385-401.
- Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 12(1), 85-105.
- Chin, W. W. (1998). Issues and opinion on structural equation modeling. MIS Quarterly, 22(1), vii-xv.
- Choi Beomjoon, & La Suna. (2013). The impact of corporate social responsibility (CSR) and customer trust on the restoration of loyalty after service failure and recovery. Journal of Services Marketing, 27(3), 223-233.
- David, P., Kline, S., & Dai, Y. (2005). Corporate social responsibility practices, corporate identity, and purchase intention: A dual-process model. Journal of Public Relations Research, 17(3), 291-313.
- Davies, R. (2003). Making globalization good: The moral challenges of global capitalism. In The business community: Social responsibility and corporate values (pp. 301-319.). Oxford University Press.
- Dimitriades Zoe S. (2007). The influence of service climate and job involvement on customer-oriented organizational citizenship behavior in Greek service organizations: A survey. Employee Relations, 29(5), 469-491.
- Erkollar, A., & Oberer, B. (2012). Responsible business: The European Union is driving forward the European strategies on corporate social responsibility. Journal of EU Research in Business, 1.
- Eweje Gabriel. (2014). Introduction: Trends in Corporate Social Responsibility and Sustainability in Emerging Economies. Corporate Social Responsibility and Sustainability: Emerging Trends in Developing Economies, 8, 3-17. Emerald Group Publishing Limited.
- Fatma, M., & Rahman, Z. (2016). The CSR’s influence on customer responses in Indian banking sector. Journal of Retailing and Consumer Services, 29, 49-57.
- Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39-50.
- Galant, A., & Cadez, S. (2017). Corporate social responsibility and financial performance relationship: A review of measurement approaches. Economic Research-Ekonomska Istraživanja, 30(1), 676-693.
- Gallarza, M. G., & Saura, I. G. (2006). Value dimensions, perceived value, satisfaction and loyalty: An investigation of university students’ travel behaviour. Tourism Management, 27(3), 437-452.
- Gallarza, M. G., Maubisson, L., & Rivière, A. (2020). Replicating consumer value scales: A comparative study of EVS and PERVAL at a cultural heritage site. Journal of Business Research.
- Ghobadian, A., Gallear, D., & Hopkins, M. (2007). TQM and CSR nexus. International Journal of Quality & Reliability Management, 24(7), 704-721.
- Glavas, A., & Godwin, L. N. (2013). Is the perception of ’goodness’ good enough? Exploring the relationship between perceived corporate social responsibility and employee organizational identification. Journal of Business Ethics, 114(1), 15-27.
- Goel, M., & Ramanathan, P. E. (2014). Business ethics and Corporate Social Responsibility-Is there a dividing line. Procedia Economics and Finance, 11(1), 49-59.
- Grappi, S., Romani, S., & Bagozzi, R. P. (2013). Consumer response to corporate irresponsible behavior: Moral emotions and virtues. Journal of Business Research, 66(10), 1814-1821.
- Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (1998). Multivariate data analysis (Vol. 5, Issue 3). Prentice hall Upper Saddle River, NJ.
- Hair, J. F., Sarstedt, M., Matthews, L. M., & Ringle, C. M. (2016). Identifying and treating unobserved heterogeneity with FIMIX-PLS: part I – method. European Business Review.
- He, H., & Li, Y. (2011). CSR and service brand: The mediating effect of brand identification and moderating effect of service quality. Journal of Business Ethics, 100(4), 673-688.
- Hulland, J. (1999). Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic Management Journal, 20(2), 195-204.
- Ivanauskienė, N., Auruškevičienė, V., Škudienė, V., & Nedzinskas, Š. (2012). Customer perceptions of value: Case of retail banking. Organizations and Markets in Emerging Economies, 3, 75-88.
- Kilcullen Maureen, & Ohles Kooistra Judith. (1999). At least do no harm: Sources on the changing role of business ethics and corporate social responsibility. Reference Services Review, 27(2), 158-178.
- Kim, S. (2019). The Process Model of Corporate Social Responsibility (CSR) Communication: CSR Communication and its Relationship with Consumers’ CSR Knowledge, Trust, and Corporate Reputation Perception. Journal of Business Ethics, 154(4), 1143-1159.
- Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), 23-34.
- Kotler, P., & Lee, N. (2005). Best of breed: When it comes to gaining a market edge while supporting a social cause,“corporate social marketing” leads the pack. Social Marketing Quarterly, 11(3-4), 91-103.
- Lacey, R., & Kennett-Hensel, P. A. (2010). Longitudinal effects of corporate social responsibility on customer relationships. Journal of Business Ethics, 97(4), 581-597.
- Lee, J., & Lee, Y. (2015). The interactions of CSR, self-congruity and purchase intention among Chinese consumers. Australasian Marketing Journal (AMJ), 23(1), 19-26.
- Luo, X., & Bhattacharya, C. B. (2006). Corporate social responsibility, customer satisfaction, and market value. Journal of Marketing, 70(4), 1-18.
- Marin, L., Ruiz, S., & Rubio, A. (2009). The role of identity salience in the effects of corporate social responsibility on consumer behavior. Journal of Business Ethics, 84(1), 65-78.
- Ministry of Corporate Affairs. (2013). The Companies Act 2013, section 135. Corporate Social Responsibility.
- Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20-38.
- Mulaessa, N., & Wang, H. (2017). The effect of corporate social responsibility (CSR) activities on consumers purchase intention in China: Mediating role of consumer support for responsible business. International Journal of Marketing Studies, 9(1), 73-81.
- Naushad, M. (2018). A study on the antecedents of entrepreneurial intentions among Saudi students. Entrepreneurship and Sustainability Issues, 5(3), 600-617.
- Naushad, M., & Malik, S. A. (2015). Corporate governance and bank performance: A study of selected banks in GCC region. Asian Social Science, 11(9), 226.
- Nicolaides, A. (2018). Corporate Social Responsibility as an Ethical Imperative. Athens Journal of Law, 4, 285-300.
- Oney, E., Oksuzoglu Guven, G., & Hussain Rizvi, W. (2017). The determinants of electronic payment systems usage from consumers’ perspective. Economic Research-Ekonomska Istraživanja, 30(1), 394-415.
- Parsa, H. G., Lord, K. R., Putrevu, S., & Kreeger, J. (2015). Corporate social and environmental responsibility in services: Will consumers pay for it? Journal of Retailing and Consumer Services, 22, 250-260.
- Peloza, J., & Shang, J. (2011). How can corporate social responsibility activities create value for stakeholders? A systematic review. Journal of the Academy of Marketing Science, 39(1), 117-135.
- Pérez Andrea, & Rodríguez del Bosque Ignacio. (2014). Customer CSR expectations in the banking industry. International Journal of Bank Marketing, 32(3), 223-244.
- Pinney, C. (2001). Imagine speaks out. How to manage corporate social responsibility and reputation in a global marketplace: The challenge for Canadian business. 23.
- Poddar, A., Narula, S. A., & Zutshi, A. (2019). A study of corporate social responsibility practices of the top Bombay Stock Exchange 500 companies in India and their alignment with the Sustainable Development Goals. Corporate Social Responsibility and Environmental Management, 26(6), 1184-1205.
- Ramasamy, B., & Yeung, M. (2009). Chinese Consumers’ Perception of Corporate Social Responsibility (CSR). Journal of Business Ethics, 88(1), 119-132.
- Ramesh, K., Saha, R., Goswami, S., & Dahiya, R. (2019). Consumer’s response to CSR activities: Mediating role of brand image and brand attitude. Corporate Social Responsibility and Environmental Management, 26(2), 377-387.
- Reich, A. Z., Xu, Y. H., & McCleary, K. W. (2010). The influence of social responsibility image relative to product and service quality on brand loyalty: An exploratory study of quick-service restaurants. Hospitality Review, 28(1), 2.
- Rodin, D. (2005). The ownership model of business ethics. Metaphilosophy, 36(1-2), 163-181.
- Roitto, A. (2013). Factors Effecting Corporate Social Responsibility Disclosure Ratings: An Empirical Study of Finnish Listed Companies. Oulu Business School, Oulu, Finlândia.
- Salmones, M. M., & Perez, A. (2018). Effectiveness of CSR advertising: The role of reputation, consumer attributions, and emotions. Corporate Social Responsibility and Environmental Management, 25(2), 194-208.
- Sandström, S., Edvardsson, B., Kristensson, P., & Magnusson, P. (2008). Value in use through service experience. Managing Service Quality: An International Journal.
- Servera-Francés, D., & Arteaga-Moreno, F. (2015). The impact of corporate social responsibility on the customer commitment and trust in the retail sector. Ramon Llull Journal of Applied Ethics, 6, 161-178.
- Servera-Francés, D., & Piqueras-Tomás, L. (2019). The effects of corporate social responsibility on consumer loyalty through consumer perceived value. Economic Research-Ekonomska Istraživanja, 32(1), 66-84.
- Simionescu, L. N. (2015). The relationship between corporate social responsibility (csr) and sustainable development (sd). Internal Auditing & Risk Management, 10(2).
- Smith, N. C. (2003). Corporate social responsibility: Whether or how? California Management Review, 45(4), 52-76.
- Stanwick, P. A., & Stanwick, S. D. (1998). The relationship between corporate social performance, and organizational size, financial performance, and environmental performance: An empirical examination. Journal of Business Ethics, 17(2), 195-204.
- Sweeney, J. C., & Soutar, G. N. (2001). Consumer perceived value: The development of a multiple item scale. Journal of Retailing, 77(2), 203-220.
- Tang, Z., Hull, C. E., & Rothenberg, S. (2012). How corporate social responsibility engagement strategy moderates the CSR – financial performance relationship. Journal of Management Studies, 49(7), 1274-1303.
- Uhlig, M. R. H., Mainardes, E. W., & Nossa, V. (2020). Corporate social responsibility and consumer’s relationship intention. Corporate Social Responsibility and Environmental Management, 27(1), 313-324.
- Vaaland Terje I., Heide Morten, & Grønhaug Kjell. (2008). Corporate social responsibility: Investigating theory and research in the marketing context. European Journal of Marketing, 42(9/10), 927-953.
- Walsh, G., Shiu, E., & Hassan, L. M. (2014). Replicating, validating, and reducing the length of the consumer perceived value scale. Journal of Business Research, 67(3), 260-267.
- Xu, Y., Yu, W., & He, Y. (2014). Research Review and Prospect of Corporate Social Responsibility and Consumers’ Purchase Intention. In J. Xu, J. A. Fry, B. Lev, & A. Hajiyev (Eds.), Proceedings of the Seventh International Conference on Management Science and Engineering Management (pp. 675-686). Springer Berlin Heidelberg.
- Yadava, R. N., & Sinha, B. (2016). Scoring sustainability reports using GRI 2011 guidelines for assessing environmental, economic, and social dimensions of leading public and private Indian companies. Journal of Business Ethics, 138(3), 549-558.