Advertisement

Brand equity and firm performance: the complementary role of corporate social responsibility

  • Mahabubur RahmanEmail author
  • M. Ángeles Rodríguez-Serrano
  • Mary Lambkin
Original Article
  • 9 Downloads

Abstract

Previous studies have demonstrated the impact of corporate brand equity on firm performance but have not yet investigated moderating effects on this relationship from other dimensions of firm strategy. This study puts forward a contingency model of the relationship between corporate brand equity and firm performance and investigates the moderating effect of one important contingency variable which is the firm’s corporate social responsibility (CSR) strategy. It is tested on a panel dataset of 62 US firms/corporate brands. The results of this study corroborate previous evidence that corporate brand equity has a significant positive impact on market-based performance, measured by market share, as well as on financial performance, measured by Tobin’s q. In addition, the findings indicate that CSR plays a complementary role, positively moderating the relationship between corporate brand equity and firm performance. That is, there is a synergistic connection between brand equity and CSR which increases long-term value over and above the direct impact of corporate brand equity.

Keywords

Brand equity Firm performance Corporate social responsibility 

Notes

References

  1. Aaker, D.A. 1991. Managing brand equity. New York: The Free Press.Google Scholar
  2. Aaker, D.A. 1992. The value of brand equity. Journal of Business Strategy 13: 27–32.CrossRefGoogle Scholar
  3. Aguinis, H., and A. Glavas. 2012. What we know and don’t know about corporate social responsibility a review and research agenda. Journal of Management 38: 932–968.CrossRefGoogle Scholar
  4. Aragón-Correa, J.A., and S. Sharma. 2003. A contingent resource-based view of proactive corporate environmental strategy. Academy of Management Review 28: 71–88.CrossRefGoogle Scholar
  5. Arellano, M., and S. Bond. 1991. Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies 58: 277–297.CrossRefGoogle Scholar
  6. Arellano, M., and O. Bover. 1995. Another look at the instrumental variable estimation of error-components models. Journal of Econometrics 68: 29–51.CrossRefGoogle Scholar
  7. Baker, W.E., and J.M. Sinkula. 2005. Environmental marketing strategy and firm performance: Effects on new product performance and market share. Journal of the Academy of Marketing Science 33: 461–475.CrossRefGoogle Scholar
  8. Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management 17: 99–120.CrossRefGoogle Scholar
  9. Barney, J., M. Wright, and D.J. Ketchen. 2001. The resource-based view of the firm: Ten years after 1991. Journal of Management 27: 625–641.CrossRefGoogle Scholar
  10. Bhattacharya, C.B., and S. Sen. 2010. Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. International Journal of Management Reviews 12: 8–19.CrossRefGoogle Scholar
  11. Blundell, R., and S. Bond. 1998. Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics 87: 115–143.CrossRefGoogle Scholar
  12. Cable, D.M., and D.B. Turban. 2003. The value of organizational reputation in the recruitment context: A brand-equity perspective. Journal of Applied Social Psychology 33: 2244–2266.CrossRefGoogle Scholar
  13. Capezio, A., J. Shields, and M. O’donnell. 2011. Too good to be true: board structural independence as a moderator of CEO pay for firm performance. Journal of Management Studies 48: 487–513.CrossRefGoogle Scholar
  14. Carton, R.B., and C.W. Hofer. 2010. Organizational financial performance: Identifying and testing multiple dimensions. Academy of Entrepreneurship Journal 16: 1–22.Google Scholar
  15. De Miguel, A., J. Pindado, and C. De La Torre. 2004. Ownership structure and firm value: New evidence from Spain. Strategic Management Journal 25: 1199–1207.CrossRefGoogle Scholar
  16. Dixon-fowler, H.R., D.J. Slater, J.L. Johnson, A.E. Ellstrand, and A.M. Romi. 2013. Beyond “does it pay to be green?” A meta-analysis of moderators of the CEP–CFP relationship. Journal of Business Ethics 112: 353–366.CrossRefGoogle Scholar
  17. Donaldson, T., and L.E. Preston. 1995. The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review 20: 65–91.CrossRefGoogle Scholar
  18. Duru, A., R.J. Iyengar, and E.M. Zampelli. 2016. The dynamic relationship between CEO duality and firm performance: The moderating role of board independence. Journal of Business Research 69: 4269–4277.CrossRefGoogle Scholar
  19. Edeling, A., and M. Fischer. 2016. Marketing’s impact on firm value: Generalizations from a meta-analysis. Journal of Marketing Research 53: 515–534.CrossRefGoogle Scholar
  20. Feng, H., N.A. Morgan, and L.L. Rego. 2015. Marketing department power and firm performance. Journal of Marketing 79: 1–20.CrossRefGoogle Scholar
  21. Feng, H., N.A. Morgan, and L.L. Rego. 2017. Firm capabilities and growth: The moderating role of market conditions. Journal of the Academy of Marketing Science 45: 76–92.CrossRefGoogle Scholar
  22. Godley, A.C. 2013. Entrepreneurial opportunities, implicit contracts, and market making for complex consumer goods. Strategic Entrepreneurship Journal 7: 273–287.CrossRefGoogle Scholar
  23. Grewal, R., J.A. Cote, and H. Baumgartner. 2004. Multicollinearity and measurement error in structural equation models: Implications for theory testing. Marketing Science 23: 519–529.CrossRefGoogle Scholar
  24. Jamali, D. 2008. A stakeholder approach to corporate social responsibility: A fresh perspective into theory and practice. Journal of Business Ethics 82: 213–231.CrossRefGoogle Scholar
  25. Jean, R.-J.B., Z. Deng, D. Kim, and X. Yuan. 2016. Assessing endogeneity issues in international marketing research. International Marketing Review 33: 483–512.CrossRefGoogle Scholar
  26. Johansson, J.K., C.V. Dimofte, and S.K. Mazvancheryl. 2012. The performance of global brands in the 2008 financial crisis: A test of two brand value measures. International Journal of Research in Marketing 29: 235–245.CrossRefGoogle Scholar
  27. Jones, T.M. 1995. Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management Review 20: 404–437.CrossRefGoogle Scholar
  28. Keller, K.L. 2016. Reflections on customer-based brand equity: perspectives, progress, and priorities. AMS Review 6: 1–16.CrossRefGoogle Scholar
  29. Kim, H.-R., M. Lee, H.-T. Lee, and N.-M. Kim. 2010. Corporate social responsibility and employee–company identification. Journal of Business Ethics 95: 557–569.CrossRefGoogle Scholar
  30. Kirk, C.P., I. Ray, and B. Wilson. 2013. The impact of brand value on firm valuation: The moderating influence of firm type. Journal of Brand Management 20: 488–500.CrossRefGoogle Scholar
  31. Lai, C.-S., C.-J. Chiu, C.-F. Yang, and D.-C. Pai. 2010. The effects of corporate social responsibility on brand performance: The mediating effect of industrial brand equity and corporate reputation. Journal of Business Ethics 95: 457–469.CrossRefGoogle Scholar
  32. Lamberti, L., and E. Lettieri. 2009. CSR practices and corporate strategy: Evidence from a longitudinal case study. Journal of Business Ethics 87: 153–168.CrossRefGoogle Scholar
  33. Lee, K.-H., and B. Min. 2015. Green R&D for eco-innovation and its impact on carbon emissions and firm performance. Journal of Cleaner Production 108: 534–542.CrossRefGoogle Scholar
  34. Lee, S., K. Seo, and A. Sharma. 2013. Corporate social responsibility and firm performance in the airline industry: The moderating role of oil prices. Tourism Management 38: 20–30.CrossRefGoogle Scholar
  35. Lockett, A., S. Thompson, and U. Morgenstern. 2009. The development of the resource-based view of the firm: A critical appraisal. International Journal of Management Reviews 11: 9–28.CrossRefGoogle Scholar
  36. Lyon, T.P., and J.P. Shimshack. 2015. Environmental disclosure: Evidence from Newsweek’s green companies rankings. Business and Society 54: 632–675.CrossRefGoogle Scholar
  37. Madden, T.J., F. Fehle, and S. Fournier. 2006. Brands matter: An empirical demonstration of the creation of shareholder value through branding. Journal of the Academy of Marketing Science 34: 224–235.CrossRefGoogle Scholar
  38. Maignan, I., O. Ferrell, and L. Ferrell. 2005. A stakeholder model for implementing social responsibility in marketing. European Journal of Marketing 39: 956–977.CrossRefGoogle Scholar
  39. Melo, T., and J.I. Galan. 2011. Effects of corporate social responsibility on brand value. Journal of Brand Management 18: 423–437.CrossRefGoogle Scholar
  40. Menguc, B., and L.K. Ozanne. 2005. Challenges of the “green imperative”: A natural resource-based approach to the environmental orientation–business performance relationship. Journal of Business Research 58: 430–438.CrossRefGoogle Scholar
  41. Moir, L. 2001. What do we mean by corporate social responsibility? Corporate Governance: The international journal of business in society 1: 16–22.CrossRefGoogle Scholar
  42. Murray, J.Y., G.Y. Gao, and M. Kotabe. 2011. Market orientation and performance of export ventures: The process through marketing capabilities and competitive advantages. Journal of the Academy of Marketing Science 39: 252–269.CrossRefGoogle Scholar
  43. Park, C.W., A.B. Eisingerich, G. Pol, and J.W. Park. 2013. The role of brand logos in firm performance. Journal of Business Research 66: 180–187.CrossRefGoogle Scholar
  44. Rego, L.L., N.A. Morgan, and C. Fornell. 2013. Reexamining the market share–customer satisfaction relationship. Journal of Marketing 77: 1–20.CrossRefGoogle Scholar
  45. Richard, O.C. 2000. Racial diversity, business strategy, and firm performance: A resource-based view. Academy of Management Journal 43: 164–177.Google Scholar
  46. Roodman, D. 2006. How to do xtabond2: An introduction to difference and system GMM in Stata. The Stata Journal 9: 86–136.CrossRefGoogle Scholar
  47. Ruf, B.M., K. Muralidhar, R.M. Brown, J.J. Janney, and K. Paul. 2001. An empirical investigation of the relationship between change in corporate social performance and financial performance: A stakeholder theory perspective. Journal of Business Ethics 32: 143–156.CrossRefGoogle Scholar
  48. Russo, M.V., and P.A. Fouts. 1997. A resource-based perspective on corporate environmental performance and profitability. Academy of Management Journal 40: 534–559.Google Scholar
  49. Sen, S., C.B. Bhattacharya, and D. Korschun. 2006. The role of corporate social responsibility in strengthening multiple stakeholder relationships: A field experiment. Journal of the Academy of Marketing science 34(2): 158–166.CrossRefGoogle Scholar
  50. Servaes, H., and A. Tamayo. 2013. The impact of corporate social responsibility on firm value: The role of customer awareness. Management Science 59: 1045–1061.CrossRefGoogle Scholar
  51. Shahzad, A.M., and M.P. Sharfman. 2015. Corporate social performance and financial performance sample-selection issues. Business & Society 56: 889–918.CrossRefGoogle Scholar
  52. Srinivasan, S., and D.M. Hanssens. 2009. Marketing and firm value: Metrics, methods, findings, and future directions. Journal of Marketing Research 46: 293–312.CrossRefGoogle Scholar
  53. Stahl, F., M. Heitmann, D.R. Lehmann, and S.A. Neslin. 2012. The impact of brand equity on customer acquisition, retention, and profit margin. Journal of Marketing 76: 44–63.CrossRefGoogle Scholar
  54. Steenkamp, J.-B. 2014. How global brands create firm value: The 4 V model. International Marketing Review 31: 5–29.CrossRefGoogle Scholar
  55. Tashman, P., and J. Raelin. 2013. Who and what really matters to the firm: Moving stakeholder salience beyond managerial perceptions. Business Ethics Quarterly 23: 591–616.CrossRefGoogle Scholar
  56. Tracey, M. 1998. The importance of logistics efficiency to customer service and firm performance. The International Journal of Logistics Management 9: 65–81.CrossRefGoogle Scholar
  57. Torres, A., T.H. Bijmolt, J.A. Tribó, and P. Verhoef. 2012. Generating global brand equity through corporate social responsibility to key stakeholders. International Journal of Research in Marketing 29: 13–24.CrossRefGoogle Scholar
  58. Vomberg, A., C. Homburg, and T. Bornemann. 2015. Talented people and strong brands: The contribution of human capital and brand equity to firm value. Strategic Management Journal 36: 2122–2131.CrossRefGoogle Scholar
  59. Wang, D.H.-M., P.-H. Chen, T.H.-K. Yu, and C.-Y. Hsiao. 2015. The effects of corporate social responsibility on brand equity and firm performance. Journal of Business Research 68: 2232–2236.CrossRefGoogle Scholar
  60. Wang, H.-M.D., and S. Sengupta. 2016. Stakeholder relationships, brand equity, firm performance: A resource-based perspective. Journal of Business Research 69: 5561–5568.CrossRefGoogle Scholar
  61. Yeung, M., and B. Ramasamy. 2008. Brand value and firm performance nexus: Further empirical evidence. Journal of Brand Management 15: 322–335.CrossRefGoogle Scholar
  62. Zaefarian, G., V. Kadile, S.C. Henneberg, and A. Leischnig. 2017. Endogeneity bias in marketing research: Problem, causes and remedies. Industrial Marketing Management 65: 39–46.CrossRefGoogle Scholar

Copyright information

© Springer Nature Limited 2019

Authors and Affiliations

  1. 1.Department of MarketingRennes School of BusinessRennesFrance
  2. 2.Department of Business Organization and MarketingUniversity Pablo de OlavideSevilleSpain
  3. 3.Smurfit Graduate Business SchoolUniversity College DublinBlackrockIreland

Personalised recommendations