EXPRESS: The Impact of Corporate Social Responsibility on Brand Sales: An Accountability Perspective Academic Article uri icon

abstract

  • Consumers are increasingly mindful of CSR when making purchase and consumption decisions. While extant research suggests small, positive effects of CSR on measures of firm financial valuation, consumers' behavioral response to CSR initiatives in the form of actual purchase decisions remains undocumented. This paper introduces a framework categorizing firm-initiated CSR efforts as “Corrective,” “Compensating,” or “Cultivating goodwill” actions, and documents the influence of these different types of CSR on brand sales. Leveraging a database of CSR press releases and sales data from leading CPG brands, the authors examine the effect of CSR announcements on brand sales. The findings suggest that CSR initiatives that genuinely seek to reduce a brand's negative social or environmental impact (“Corrective” and “Compensating”) produce the greatest sales lift, while CSR actions consisting of purely philanthropic-type efforts (“Cultivating goodwill”) can actually hurt sales. The experimental results show that, conditional on CSR reputation, consumers perceive varying degrees of sincerity in the different CSR types, which mediate the effect of CSR type on purchase intentions. Overall, the results suggest that consumers are more inclined to reward firms that directly reduce the negative by-products of their own business practices than to be impressed by public goodwill gestures.

author list (cited authors)

  • Nickerson, D., Lowe, M., Pattabhiramaiah, A., & Sorescu, A.

publication date

  • January 1, 2021 11:11 AM