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The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness

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  • Henri Servaes

    () (London Business School, London NW1 4SA, United Kingdom)

  • Ane Tamayo

    () (London School of Economics and Political Science, London WC2A 2AE, United Kingdom)

Abstract

This paper shows that corporate social responsibility (CSR) and firm value are positively related for firms with high customer awareness, as proxied by advertising expenditures. For firms with low customer awareness, the relation is either negative or insignificant. In addition, we find that the effect of awareness on the CSR--value relation is reversed for firms with a poor prior reputation as corporate citizens. This evidence is consistent with the view that CSR activities can add value to the firm but only under certain conditions. This paper was accepted by Bruno Cassiman, business strategy.

Suggested Citation

  • Henri Servaes & Ane Tamayo, 2013. "The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness," Management Science, INFORMS, vol. 59(5), pages 1045-1061, May.
  • Handle: RePEc:inm:ormnsc:v:59:y:2013:i:5:p:1045-1061
    DOI: 10.1287/mnsc.1120.1630
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    File URL: http://dx.doi.org/10.1287/mnsc.1120.1630
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    References listed on IDEAS

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    9. Daniel Fernández‐Kranz & Juan Santaló, 2010. "When Necessity Becomes a Virtue: The Effect of Product Market Competition on Corporate Social Responsibility," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 453-487, June.
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