Do customer satisfaction and reputation mediate the CSRâ€“FP link? Evidence from Australia
Direct tests between corporate social responsibility (CSR) and firm performance (FP) have been argued to be spurious. Following this line of argument, the present study tests a mediated model in understanding the CSRâ€“FP relationship. Specifically, we posit that reputation and customer satisfaction mediate fully the CSRâ€“FP relationship. Based on the results from a sample of 280 Australian firms, the findings suggest that CSR is linked with FP. However, the effect is indirect: while CSR is linked to both reputation and customer satisfaction, reputation alone mediates the CSRâ€“FP relationship. The results are interesting, suggesting that to reduce ambiguity surrounding the CSRâ€“FP relationship scholars need to significantly expand studies that address moderating and mediating variables. Discussion is given to these findings along with paths for future research.
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