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DO ACTIONS SPEAK LOUDER THAN WORDS? THE POWER OF PUBLICIZING CORPORATE SOCIAL RESPONSIBILITY
Do Corporate Social Responsibility (CSR) activities really influence firm value, and if so, what is the mechanism that is at work? In this study, we especially focused on publicizing CSR (PCSR) and tried to examine the effect of PCSR on firm value. We merged the data from different archival sources and obtained balanced panel data consisting of 385 firmyear observation across 77 firms for 5 years. The data contained several variables such as Publicizing CSR, WOM, Tobin's q, Advertising intensity, Contribution to sales ratio, ROE, Sales increase, Asset, GDP, and other financial indicators. This study provides several implications for marketing theory and practice. First, it simultaneously reveals the preceding and following factors of word of mouth. Second, our evidence suggests that marketing managers could obtain benefits if they concentrate not only on finding good CSR activities but also on publicizing them well, and that PCSR could be a great help for companies that want to improve the public awareness and interest. The purpose of this study is to clarify the relationship between publicizing CSR (PCSR) and firm value, and the mechanism by which the influence is conveyed. Our findings are as below. First, the higher the PCSR, the greater the firm value even though the ratio of contribution to sales is added. Because the contribution is known as a representative proxy for corporate socially responsible investment, this result implies that PCSR is significant even though the effect of CSR itself is controlled. Second, WOM mediates the relationship between PCSR and firm value. This suggests that publicizing CSR could attract people's attention and then contribute positively to firm value. Finally, this study found that the effects of PCSR on firm value are mediated through positive WOM in the context of controlling negative WOM. This result implies that PCSR increases the amount of positive WOM, rather than negative WOM, which helps improve corporate value.
