Corporate social responsibility, customer satisfaction, and financial performance: The moderating effect of the institutional environment in two transition economies

Xuemei Xie, Yaoyang Jia, Xiaohua Meng, Chao Li

Research output: Contribution to journalArticlepeer-review

Abstract

Corporate social responsibility (CSR) is a long-established topic in firms' operating process, yet few studies have examined CSR from the perspective of customer satisfaction and institutional environments. We fill the gap in the existing literature by exploring the roles of customer satisfaction and institutional environments as they pertain to the link between CSR efforts and financial performance, specifically in the context of transitional economies. In this work, we use a sample of 238 firms located in China and Vietnam. Our empirical results present several interesting findings: (a) the relationship between CSR efforts and financial performance is fully mediated by customer satisfaction; (b) good institutional environments positively strengthen the impact of CSR efforts on firms' customer satisfaction; and (c) there are significant differences in the moderating effect of institutional environments between the two countries that were sampled in this research. In the Chinese sample, the institutional environment positively moderated the relationship between CSR and customer satisfaction; while in the Vietnamese sample, the institutional environment positively moderated the relationship between CSR efforts and the return on sales (ROS). Based on these findings, we provide several recommendations for managers to effectively conduct CSR practices.

Original languageEnglish
Pages (from-to)26-39
Number of pages14
JournalJournal of Cleaner Production
Volume150
Early online date2 Mar 2017
DOIs
Publication statusPublished - 1 May 2017

Keywords

  • Corporate social responsibility
  • Customer satisfaction
  • Institutional environments
  • Transition economies

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