The impact of CSR on brand equity:

the moderating role of consumer

involvement in CSR

Master’s Thesis 15 credits

Department of Business Studies
Uppsala University
Spring Semester of 2020

Date of Submission: 2020-06-03

Author: Jiajun Wu
Wanying Huang

Supervisor: Cong Su
Lingshuang Kong

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Abstract
While pursuing profits, modern firms begin to undertake corporate social responsibility

(CSR). Different ways for firms to implement CSR have diverse impacts on

consumer-based brand equity that reflects the meaning of the brand in consumers’ minds

and is of considerable significance to corporate marketing strategy. However, previous

research on CSR rarely uses signaling theory to explain the internal mechanism of

generating consumer-based brand equity. It is also a gap of existing literature to study

how to strengthen the impact of a firm’s CSR on consumer-based brand equity. This

thesis, based on stakeholder theory and signaling theory, analyzes the effects of the

degree of a firms’ CSR on consumer-based brand equity, including brand awareness,

perceived quality, and brand loyalty, and how these effects are moderated by consumer

involvement in CSR. This study adopts the quantitative approach and receives 201 valid

questionnaires by taking Alipay (a Chinese firm providing online financial services) as

the target of the survey.

The results indicate that the degree of a firm’s CSR positively impacts brand

awareness, perceived quality, and brand loyalty through empirical analysis. Meanwhile,

as a moderator, consumer involvement in CSR positively moderates the relationship

between the degree of a firm’s CSR and perceived quality but shows no significant

moderating effects on the other two associations. By uncovering the relationship between

CSR and consumer-based brand equity through the signaling theory and by introducing

the variable of consumer involvement in CSR, this study advances CSR research. It

extends the application of signaling theory in a new research area as well.

Key words
Corporate social responsibility, Consumer-based brand equity, Consumer involvement,

Signaling theory

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Table of contents
1. Introduction....................................................................................................................1
1.1 Research background ................................................................................................1
1.2 Research purpose....................................................................................................... 2
1.3 Research contributions...............................................................................................2
1.4 Structure.....................................................................................................................3
2. Theoretical Framework.................................................................................................4
2.1 Theoretical background............................................................................................. 4
2.2 Hypotheses development........................................................................................... 8
3. Research Methodology................................................................................................ 16
3.1 Research design....................................................................................................... 16
3.2 Questionnaire design............................................................................................... 17
3.3 Sample and data collection...................................................................................... 18
3.4 Measurements.......................................................................................................... 21
3.5 Common method variance control...........................................................................23
3.6 Data analysis technique........................................................................................... 24
4. Results...........................................................................................................................25
4.1 Exploratory factor analysis and reliability analysis.................................................25
4.2 Correlation analysis................................................................................................. 26
4.3 Regression analysis..................................................................................................27
5. Findings........................................................................................................................ 31
5.1 CSR and brand equity..............................................................................................31
6. Conclusion.................................................................................................................... 34
6.1 Main conclusions and managerial implications.......................................................34
6.2 Research contributions.............................................................................................35
6.3 Limitation and future research.................................................................................36
References.........................................................................................................................37
Appendix...........................................................................................................................45
1. Introduction

1.1 Research background

Nowadays, consumers are increasingly rational and diversified in their brand evaluation

of firms. In addition to considering the brand reputation and market share, consumers

begin to pay close attention to each firm’s contribution to society through public welfare,

which is mainly embodied in corporate social responsibility. According to the global

survey on CSR by McKinsey, an internationally renowned management consulting

company, 76% of managers believe that CSR has a long-term positive effect on the

improvement of corporate shareholder value and 55% believe that CSR can help firms

enhance social prestige (Mckincy and Company, 2018). Some firms devote to CSR

initiatives to establish a good social image rather than for obtaining investment returns.

However, in the practical, many other firms still act in a lack of social responsibility

pursuing the short-term economic benefits but finally bring more significant harm to their

brand equity.

Acknowledging the importance of CSR, a considerable number of scholars have

researched in this area. Many studies use the stakeholder theory to analyze managers’

contribution to social welfare through CSR (e.g. Clarkson, 1995; Maignan et al., 2005).

Consumers, as critical stakeholders, are always taken into consideration when assessing

the effects of CSR for consumer-based brand equity such as brand loyalty (e.g. Khan and

Fatma, 2016; Martínez and Nishiyama, 2019; Aljarah and Ibrahim, 2020) and brand

awareness (e.g. Mattera et al., 2012; Rhou et al., 2016). However, most of the literature

on CSR focuses on firms’ engagement while neglecting consumer involvement in CSR

even with the fact that more and more firms take initiatives to provide the consumers

with opportunities to join their CSR activities to enhance CSR’s effects. But can

consumer involvement in CSR enlarge its impacts? The answer is still unclear as little

attention is paid to the role of consumer involvement in CSR.

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 Additionally, signaling theory is not widely used for research on CSR. Signaling

theory is proposed to investigate how one party conveys its unobservable quality to

another reliably and effectively but mostly applied in human resource management (e.g.

Suazo et al., 2009; Moss et al., 2015). More recently, researchers also extend the

application range of this theory to strategy and entrepreneurship studies (Taj, 2016), but

only a few relate the signaling theory to CSR focusing on the relationship between firms

and their investors (Su et al., 2016). Particularly, the literature of the signaling theory

applied in CSR studies needs to be further expanded by examining the relationship

between firms and their consumer.

1.2 Research purpose

To fill the research gaps mentioned above, drawing on stakeholder theory and signaling

theory, this study investigates how the degree of a firm’s CSR has an impact on

customer-based brand equity and how this impact is shaped by consumer involvement in

CSR. In this study, the authors adopt the conceptual framework from Yoo and Donthu

(2000), where brand awareness, perceived quality, and brand loyalty are the significant

elements of consumer-based brand equity. To achieve the research purpose, we propose

two specific research questions to be investigated:

Research question 1: How does the degree of a firm’s CSR influence on consumer-based

brand equity?

Research question 2: What role does consumer involvement in CSR play in these effects?

1.3 Research contributions

Based on the questionnaire survey of Chinese consumers of Alipay (the largest mobile

financial service provider in China) and analyzed via SPSS, this study makes

contributions to the literature and theory as follows. Firstly, this study invokes a relatively

under-explored theoretical view in CSR research - signaling theory (Spence, 1973),

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which enables us to advance the research on CSR and to extend the application of

signaling theory in a new research area. It suggests that a firm’s CSR may work as a

signal providing additional information for consumers when evaluating the firm’s brand.

Secondly, this study uncovers the relationship between the degree of a firm’s CSR and

consumer-based brand equity by using the signaling theory, which extends the literature

on CSR and branding. Thirdly, this research enriches the literature on CSR by introducing

the variable of consumer involvement in CSR. It contributes to CSR related research by

discovering the moderating effect of consumer involvement between the degree of a

firm’s CSR and perceived quality.

1.4 Structure

The main parts of this thesis are as follows. Chapter 2 begins with a critical literature

review around CSR, stakeholder theory, and signaling theory. Based on the theory

background, the framework of hypotheses is presented. Chapter 3 introduces the

methodology where the quantitative research approach is used to examine the hypotheses.

According to the measurement scale developed by previous studies, the data is collected

through an online questionnaire survey and analyzed by SPSS 25. Chapter 4 shows the

significant findings from the data are illustrated in detail with the reliability test, validity

test, and regression analysis of the hypotheses. Chapter 5, the results are discussed and

summarized with theoretical implications. Finally, in chapter 6, the main conclusion,

primary contributions, limitations, and potential aspects for future research.

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2. Theoretical Framework

This chapter mainly presents the discussion of the literature on CSR concerning the

stakeholder theory and the signaling theory and builds a research model. A critical

literature review about CSR, stakeholder theory, and signaling theory is presented in the

beginning. Then, the research model and hypotheses regarding the impact of the degree

of a firm’s CSR on brand awareness, perceived quality, and brand loyalty are developed

based on the theoretical background.

2.1 Theoretical background

2.1.1 Corporate social responsibility

CSR is an essential managerial issue in modern firms. The definition of corporate social

responsibility is first proposed by Bowen (1953) who defines it as “ the obligations of

businessmen to pursue those policies, to make those decisions or follow those lines of

action which are desirable in terms of the objectives and values of society.” He discusses

business ethics, social responsibility, and lays the foundation for corporate executives and

scholars to use CSR as part of corporate strategy and management decisions.

Since being introduced, CSR has become an essential topic in management studies

and well developed (Berger et al., 2007). CSR plays a vital role in the development of

firms and society. As more firms involved in CSR activities, to formulate the relationship

between the CSR activities and the social issues, Carrol (1979; 1991; 2016) builds up a

four-dimensional framework to stress the key aspects when planning for issues about

social performance and the implementations in the developing society. He points out that

four responsibilities, like a pyramid, set a foundation of the genetic characterization of

duties to society: economic, legal, ethical and philanthropic responsibilities. From the

perspective of social welfare, some studies also discuss the related managerial practices

and imply the importance of firm’s CSR activities about narrowing the gap between rich

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and poor and social impacts for administrative practice (e.g. Wartick and Cochran, 1985;

Wood, 1991). That is, CSR provides a multi-perspective explanation for the responsibility

to be assumed in the development of firm and society, with far-reaching impacts.

Therefore, a recently more agreed concept of CSR is “ Corporate social responsibility

encompasses the economic, legal, ethical, and discretionary (philanthropic) expectations

that society has of organizations at a given time ” (Carroll & Buchholtz, 2014, p.32)

which is adopted by this thesis.

From the perspective of the firm, empirical researches illustrate the connection

between CSR and firms’ benefits from branding (e.g. Cha, Yi, Bagozzi, 2016; Chung and

Lee, 2019; Einwiller et al., 2019; Martinez and Bosque, 2013), where the degree of a

firm’s CSR could directly or indirectly influence consumers’ purchase intention and

brand identification (He and Li, 2011). CSR also matters in evaluating firm’s stakeholder

related contribution (Costa and Menichini, 2013) and consumer perception (e.g. Claekson,

1995; Huang, Cheng, and Chen., 2017), mainly through fulfilling the economic

responsibilities, fitting CSR with strategic intentions, and even being set as a method for

the promotion of social order (Falck and Heblich, 2007). In short, CSR has been verified

for its contributions to branding and consumer perception. However, the majority of

previous studies focus on the involvement of firms or employees (e.g. Chong, 2009) in

CSR and rarely pay attention to individual participation in firm ’s CSR which is also a

potential factor shaping the effect on consumer perception of a firm’s CSR.

2.1.2 CSR from stakeholder perspective

Various theories are adopted to explore the influence on firms and consumers through

CSR in previous studies. According to Fernando and Lawrence (2014), there are three

mainstream theories employed in CSR literature studies: legitimacy theory, stakeholder

theory and institutional theory. Based on Fernando and Lawrence (2014), these three

theories have similarities, though, stakeholder theory pays more attention to the

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investigation of independent consumers and can link firms with their stakeholders from

the aspects like ethics and management.

The stakeholder theory illustrates that the development of the firm is inseparable

from the input or involvement of stakeholders. Stakeholders are defined as the

individuals or groups that can influence a firm’s decisions through their relationship

(Freeman, 1984). As this perspective is extensively used in the research on the impact of

CSR, stakeholders are considered to be able to evaluate the degree of a firm ’ s CSR

(Endacott, 2004; Rowley and Moldoveanu, 2003).

For researches about consumers (as an essential group of stakeholders) through the

stakeholder theory and CSR, two major perspectives are emerging in recent years (Berger

et al., 2007). In one stream, some studies start investigating how consumers are

individually involved in CSR initiatives taken by firms (Rupp and Mallory, 2015; Gond

et al., 2017). Consumers may enhance their loyalty and awareness to the firm by

perceiving the value creation that CSR activities bring with, which is also a marketing

output of the firm (Green and Peloza, 2011). Meanwhile, since the appreciation from

consumers can contribute to the profitability of firms, empirical studies have come up

with formulated processes and frameworks to measure the interaction between the

consumer and the company through CSR activities (e.g. Bhattacharya and Sen, 2004).

Hence, stakeholder theory is suitable to be used to study further how consumers

participate in CSR and its effects on consumer-based brand equity.

A stream of studies considers consumer involvement as very important. For instance,

Howie et al. (2018) argue that companies could win their competitors, create social

influence, and gain higher operational efficiency of marketing applications by engaging

in cause-related marketing which refers to a designated cause for profit-gaining by

encouraging consumers to get involved (Varadarajan and Menon 1988). Also, Bagozzi

and Dholakia (2002) discuss a kind of member involvement in the virtual community and

the distinction between personal and group intentions from an individual perspective.

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However, despite the importance of consumer involvement in firms’ activities, little

attention is paid to consumer involvement in CSR and its effects.

2.1.3 Signaling theory

Signaling theory is proposed to resolve the problem of information asymmetry (Spence,

2002) by figuring out how one party may signal its potential and tacit advantage to

another one. Signaling theory highlights several main elements, such as signaler, signal,

and receiver. Signalers are generally defined as insiders who have access to the internal

information of the organization that outsiders can not acquire (Kirmani and Rao, 2000).

Regarding signals involving the information about the firm, the products, and the

relationship between the organizations, the quality of signals is emphasized (Spence,

2002) since different signals are detected to varying degrees by the receivers (Gulati and

Higgins, 2003; Ramaswami, 2010; Spence, 2002). Additionally, signaling validity is also

affected by the receivers who are usually particular individuals or groups. If the receivers

lack the awareness or the correct methods of perceiving and interpreting the signals, the

process of signal transfer does not work effectively (Gulati and Higgins, 2003; Srivastava,

2001). There are still other elements, such as the signaling environment and feedback that

influence the process of information transfer and interpretation (Kirmani and Rao, 2000).

To sum up, signaling theory is dedicated to solving how one party effectively conveys the

unobservable quality to another one concerning the influences of every element.

Signaling theory is applied to a variety of researches in the field of strategic

management and human resource management, but with little relationships with the

literature of CSR. Firms in different scales, such as microenterprises (Moss et al., 2015)

and startups/IPO (initial public offering) firms (Bruton et al., 2010), could act as signalers

based on the reflection of taking social responsibilities to gain extra financial profits.

Researchers such as Hochwarter et al. (2007), from the field of psychology and

management, claimed that employees might manipulate their political behaviours as the

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signals to achieve greater or lesser fit with the perceptions of meaningful work outcomes.

Su et al. (2016) find that signaling effects on CSR practices can promote the financial

performance of firms in emerging economies. From the perspective of consumers, the

application of signaling theory usually takes advertisement as a signal (BliegeBird et al.,

2005) to improve sales and brand effect. They pay attention to the evaluation of a

product’s quality when facing information asymmetry (Kirmani and Rao, 2000).

Therefore, in a variety of consumer and marketing research, the advertising of quality is

usually used to differentiate the product as a signal which is commonly defined as “an

action that the seller can take to convey information credibly about unobservable product

quality to the buyer” (Rao, 1999).

The review of signaling theory suggests that only a few studies focusing on the

relationships between companies and consumers relates signaling theory to CSR. But

firms’ CSR may function as a signal to express the positive sides of firms to stakeholders

such as consumers, suppliers, investors and government, and different types of

stakeholders could perceive firm’ CSR in diverse ways. Hence, the signaling theory is

suitable to use when exploring the effects of the degree of a firm’s CSR on

consumer-based brand equity.

2.2 Hypotheses development

2.2.1 The effects of CSR on consumer-based brand equity

Brand equity refers to the increment in marketing effectiveness or output of a branded

product relative to the same product without a brand (Keller, 1993). Keller and Lehmann

(2001) divide the existing brand equity measurement into three categories. The first one,

from the perspective of consumers, reflects the brand strength or brand value with the

information of consumers’ attitudes. The second category, from the standpoint of

product-market output, examines the production and the benefits that brands add to their

products in the commodity market. The third category measures the value of brands as a

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financial asset from the perspective of financial market output. This thesis takes

consumer-based brand equity as the research object. The literature review suggests that

the specific dimensions of consumer-based brand equity include brand loyalty, perceived

quality, brand awareness (Yoo et al., 2000), perceived value for the cost, brand

uniqueness, and the willingness to pay a price premium for a brand (Netemeyer, 2004).

According to the multidimensional brand equity scale developed by Yoo and Donthu

(2000), this study will examine consumer-based brand equity from three dimensions

which are brand awareness, perceived quality, and brand loyalty.

Brand awareness

Brand awareness is defined as brand recognition (Keller, 1993) that means the node

strength of a brand in consumers’ memory. In other words, brand awareness reflects the

degree to which consumers are able to recognize and identify the brand in different

situations (Rossiter and Percy, 1987). It determines whether consumers can tell which

brands they have seen before when they enter the store. Brand awareness plays a vital

role in consumer decision making because it increases the chance of a brand to be a

member of the consideration set (Baker, 1986; Nedungadi, 1990) which means a

collection of brands that are considered when making a purchase decision. Some studies

have implied that the degree of a firm’s CSR can positively impact brand awareness (e.g.

Servaes and Tamayo, 2013; Tian et al., 2011) but little with the situation where consumer

involvement is engaged.

Concerning the impact of the degree of a firm’s CSR on brand awareness, many

studies are strengthening a positive relationship between them (Hur et al., 2014; Keller,

2003; Lai et al., 2010). For instance, Martínez and Nishiyama (2019) find that CSR could

enhance brand awareness in the hospitality sector. Evidence is also provided by Kang and

Namkung (2018) who take Starbucks as an example and claim the positive relation

between CSR and brand awareness, especially when consumers show a higher level of

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ethical consumerism. Further, when firms actively put information about their CSR

initiatives into the social media or the message is passively received by consumers,

consumers’ perceptions of CSR are formulated, which positively affect the

consumer-based brand equity, especially brand awareness (Lai et al., 2010). Specifically,

such information enables consumers to realize that firms are making contributions to

society and willing to transfer part of their benefits to society. As a result, consumers will

think that such firms are socially responsible and may pay more attention to broadcasting

the brands under them. Compared with firms who do not undertake CSR, consumers are

more familiar with those who are socially responsible (Huang and Sarigollu, 2014).

From the perspective of signaling theory, companies usually take CSR actions as

signals which help convey their underlying quality, such as firm culture to distinguish

themselves to be trustworthy in consumers’ minds and finally increase brand awareness.

Also, people are more willing to receive the relevant information of a responsible firm,

including the introduction of its core businesses and brand logo so that brand awareness

is strengthened. Thus, the following hypothesis can be formulated:

Hypothesis 1: The degree of a firm’s CSR is positively related to brand awareness.

Perceived quality

Perceived quality refers to “ the consumer ’ s judgement about a product’s overall

excellence or superiority” (Zeithaml, 1988, p. 61). It relates to consumers’ intangible and

comprehensive perception of brands, and the influencing factors include product quality

and service quality. What needs to be emphasized is that perceived quality is not the

actual quality of products or services but subjective evaluation of their condition from

consumers (Zeithaml, 1988). Perceived quality is a crucial reason for consumers to make

a purchase decision. For firms, higher perceived quality can differentiate products,

increase profits and even premium.

Empirical studies are taken to investigate the diverse relationships between the

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degree of a firm’s CSR and perceived quality, for instance, the direct positive impact of

CSR on consumer perceived quality (Liu et al., 2014) and the positive mediating effect of

perceived ethicality from CSR on word-of-mouth (Makovic et al., 2018). Illustrated by

signaling theory, a firm’s CSR actions may be signals that convey a brand image with

strength and reliability to receivers. Considering that there exists lack of transparency in

some markets, consumers are more willing to establish relations with firms with large

scale, strong R&D ability and good reputation, so they tend to take their overall

impression of firms interpreted from signals as an essential basis for judging a specific

product’s characteristics. Undertaking social responsibilities helps people believe that the

firm is responsible and the products it provides will also be reliable (Martinez and

Bosque, 2013). Such kind of trust will amplify consumers’ satisfaction toward the

products and improve their perceived quality.

On the other hand, owing to the increasing awareness of environment protection,

firm’s CSR activities often involves protecting the environment and helping people in

need. Many people think that environment-friendly products or services are more

valuable to people’s physical and mental health, which makes them believe that the

products from CSR related firms are of higher quality. The following hypothesis can be

formulated:

Hypothesis 2: The degree of a firm’s CSR is positively related to perceived quality.

Brand loyalty

Brand loyalty is explained by Oliver (1999) as a kind of consumer behaviour that, no

matter what the reason was, consumers would continue to buy products of a particular

brand repeatedly, and this kind of behaviour was hard to change with the transition of the

market environment. Therefore, brand loyalty is usually reflected by consumers’

emotions, consciousness, and practice. Enhancing brand loyalty is the key to establish a

foothold and occupy the market for a long time, and also an important way for firms to

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increase profits. The impact of the degree of a firm’s CSR on brand loyalty is well

documented (e.g. Cha, Yi, and Bagozzi, 2016; Khan et al., 2019; Rivera et al., 2019) and

most of the research show positive relations between them in the context of different

industries or diverse countries. In addition to illustrating such direct influences, Osakwe

et al. (2020) try to illuminate the mechanism through which CSR indirectly influences

brand loyalty and identify corporate reputation and trust as mediators.

From the perspective of firms, sincerity can positively enhance the maintaining of

brand loyalty (Lin, 2010), where firm’s CSR thus become valid signals that help create an

image of integrity (Yoon et al., 2006), conveying information and building trust with

consumers acknowledgement. When releasing such signals, consumers who do not

expect the firm to be socially responsible before may be surprised. They feel the sense of

responsibility of the firm and over satisfied by it, which enables consumers to identify

with their own choices to a higher degree and eventually improves brand loyalty. So, the

following hypothesis can be formulated:

Hypothesis 3: The degree of a firm’s CSR is positively related to brand loyalty.

2.2.2 The moderating role of consumer involvement in CSR

Consumer involvement is now widely concerned in marketing, especially for advertising

strategy (Kim et al., 2009; Halkias and Kokkinaki, 2013; Algharaba et al., 2020).

However, the use of concept “involvement” is not consistent among the literature, and

it depends on how different researchers manipulate the variable (Laurent and Kapferer,

1985.). In this study, consumer involvement in CSR is identified as the degree to which

consumers participate in a firm’s CSR. Consumer involvement may contribute to firms

through working as a call for consumer participation and relationship building if analyzed

with the signaling theory. The encouragement on consumer involvement could sustain

user feedback, repeat purchase, positive perceptions, and more substantial brand equity

from the consumer (Lai et al., 2010; Oveis et al., 2010) because the consumers are

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“insiders” when participating in firms’ CSR during the interaction processes. In this

essence, consumers who are involved receive more potent signaling effects of a firm’s

CSR to a brand than those without the involvement in CSR. Therefore, consumer

involvement in CSR is supposed to strengthen the impact of the degree of a firms’ CSR

on consumer-based brand equity (e.g. brand awareness, perceived quality, and brand

loyalty).

Firstly, a recent study by Hur, Kim, and Woo (2014) implies that a firm’s CSR

activities such as charity events help formulate brand awareness for firms that serve a

broad range of consumers. By getting involved in a firm’s CSR, consumers can learn

more about the details of CSR events and receive a deeper understanding of how the firm

makes efforts to make the world better. Combined with signaling theory, consumer

involvement serves as a strengthened signal which emphasizes a firm’s CSR behaviors in

consumers’ mind so that they become more familiar with the brand. That is to say,

consumer involvement in CSR increases the positive relationship between the degree of a

firm’s CSR and brand awareness, and this kind of recognition is supposed to be gradually

enhanced by the involvement as reminders. So, the following hypothesis can be

formulated:

Hypothesis 4: Consumer involvement in CSR positively moderates the relationship

between the degree of a firm’s CSR and brand awareness.

Secondly, customer involvement is supposed to increase quality by previous studies (e.g.

Auh et al., 2007; Chan et al., 2010). Christodoulides et al. (2010) also suggest that

involvement positively affects perceived quality. Besides, since product quality can be

quietly improved by observing additional information (Shapiro, 1982) and consumer

participation produces brand experience (Carlson et al., 2018), consumer involvement

may accelerate the process of signal transfer and help convey a more comprehensive

knowledge of quality so as to improve perceived quality. On the other hand, the sense of

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involvement will also enhance the understanding of identity, making consumers think that

they are part of the project. To express differently, consumers feel like they are the firm’s

members to some extent so that regard the firm’s CSR activities to be meaningful and the

products to be reliable. So, the following hypothesis can be formulated:

Hypothesis 5: Consumer involvement in CSR positively moderates the relationship

between the degree of a firm’s CSR and perceived quality.

Thirdly, consumers’ emotions, consciousness, willingness, and behavior are crucial to

maintaining consumer loyalty to a brand, both attitudinal and behavioral, such as a

consumer’s desire to recommend a product to other potential consumers (Anisimova et al.,

2007; Jang et al., 2015). Bettencourt (1997) illustrates that the consumer voluntary

performance increases the likelihood of them communicating with companies, which

helps build a positive relationship and enhance psychological loyalty. As a moderator,

customer participation in CSR is found to impact the indirect relationship between a

firm’s CSR-brand fit and service brand loyalty (Cha et al., 2015). For service industries,

with the inseparability as characteristics, consumers participate at some level in creating

the service as employees, which improves their satisfaction (Bitner et al., 1997; Chen and

Raab 2014), resulting in brand loyalty. Moreover, consumers may feel valued and cared

about by the firms when being invited to participate in their CSR activities, which leads

to higher evaluations by them towards a firm’s CSR, so the influence of the degree of a

firm’s CSR on brand loyalty is stronger with consumer involvement. The following

hypothesis can be formulated:

Hypothesis 6: Consumer involvement in CSR positively moderates the relationship

between the degree of a firm’s CSR and brand loyalty.

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Figure 1 Research Model

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3. Research Methodology

This chapter outlines the research method of this thesis to examine the hypotheses

developed in the previous section. We adopt a quantitative research method via a survey

to the consumers of a famous online financial service provider - Alipay in the Chinese

market. Specifically, this chapter demonstrates the research design, followed by

questionnaire designing, sampling, data collection, sample description, and data analysis

technique.

3.1 Research design

Based on what Cooper & Schindler (2014) illustrate, as the research design is a process

of selection where most plans, methods, and techniques will be chosen to satisfy the

demand of the research objects, the process of selecting a target firm has been made with

consideration. Qualitative methods tend to illustrate the understanding in depth (Matveev,

2002)，while the quantitative methods are generally more suitable for conducting surveys

on a large number of samples, generalizing a large amount of data, and testing hypotheses

at the same time. (Westerman, 2006). Owing to qualitative tools such as interviews are

more capable of processing descriptive data, quantitative methods can enhance data

generalization and test relationship-based hypotheses better. Hence, our study is suitable

to utilize a quantitative research method.

Alipay, a Chinese firm, is chosen as the empirical context for our survey. Recently,

Chinese firms put increasing importance to the research and implementation of CSR, by

which consumers also become more interested in CSR than before (Li et al., 2019). To

select a firm that owns a comprehensive CSR recognition among the native consumers,

we analyze the top 10 companies from the Report on the development of the top 100

Chinese Internet companies in 2019 (ISC and MIIT, 2019) with the indicators of visibility,

user-scale, social effects of company’s CSR. We finally choose the app Alipay from

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Alipay (China) Network Technology Limited Company. The following reasons are

demonstrated to explain that Alipay is representative:

First, as of the first half of 2018, the number of mobile payment users in China is

about 890 million, and the penetration rate of mobile payment among mobile phone users

in China(that is, the proportion used in the past three months) has reached 92.4% (State

Information Center et al., 2019). Meanwhile, as widely functions as Paypal in the

European market, Alipay holds the leading market share as 54.4% of China’s Third-Party

Payments Providers in 2019 (iResearch Consulting Group, 2020). Thus, Alipay owns a

top-ranked user scale in the Chinese mobile financial industry.

Second, many CSR activities organized by Alipay have obtained much attention

from the consumers and society, in which consumers could be engaged in kinds of events

and share their kindness, for instance, maximizing service value and social response by

applying digital technology to consumer service (Accenture, 2020). In the program Ant

Forest, consumers are encouraged to record their daily energy savings and reduced

carbon dioxide emissions, and when the cumulative savings reach a specific target, the

real trees will be planted in certified areas. A survey suggests that such a program can

positively affect the user’s intention and awareness through perceived persuasiveness,

sense of achievement (Yang et al., 2018).

3.2 Questionnaire design

This questionnaire enquiries the degree of a firm’s CSR, consumer involvement in CSR,

and consumer-based brand equity from the consumers of Alipay. The main aspects

related to the survey are personal characteristics (location, age, gender, religion and so

on), the degree of Alipay’s CSR, brand awareness, perceived quality, brand loyalty and

involvement of CSR. A structured questionnaire is designed to capture and assess the

relationship between those aspects. Based on a literature review about CSR engagement,

a draft of the questionnaire is developed.

17
 The language of the questionnaire is firstly set as English, and translation into

Chinese is done afterwards. Following the back-translation technique proposed by

Brinslin (1970), two students with good English proficiency are invited to translate the

Chinese version back to the English version and provide suggestions for translation. Then,

we have a pre-test of the Chinese questionnaire. Notably, 8 interviewees are invited to fill

out the questionnaire and put forward their understandings, questions, and suggestions for

modification. Among the 8 interviewees, there are 3 males and 5 females with the age

span range from 17 to 35 years old, and they are all consumers who have been using

Alipay for more than 2 years. This pre-test helps to eliminate misunderstandings and

uncertainties in the Chinese context. During this revision, our supervisors also gave us

efficient and valuable advice for the improvement of applicability.

3.3 Sample and data collection

The target samples are Alipay’ s consumers in China. The way we use for data collection

is Convenience Sampling because it provides more possibility to collect as many samples

as we can considering affordability, easiness and availability (Etican et al., 2016).

Since Alipay offers most of its services online, an online survey is more in line with

the living habits of these consumers than a paper questionnaire, which also helps enhance

the efficiency. Moreover, due to the recent epidemic, a study based on an online inquiry

is used for the data collection. By generating a link that is easy to spread from the online

questionnaire platform Wenjuan Xing, and posting the link on the WeChat (the most

widely used communication tool in China), our questionnaire can get access to a large

number of diverse sampling with less cost of time.

The number of samples collected through the online platform is 254 where all

questions are thoroughly answered by the respondents. Among them, there are 201 valid

questionnaires, which means the effective rate is 79.13%. Here, an accurate survey needs

to meet the condition that the respondents must pass the polygraph test. That is to say, for

18
some questions, we ask twice from opposite angles. If the respondents answer them

inconsistently, the corresponding answer sheet will be deleted. Consequently, 53

questionnaires are excluded because they did not meet the condition.

3.4 Descriptive information of samples

As shown in Table 1, among the 201 valid questionnaires, 135 answers are from females

with a proportion of 67.2%, which is twice as much as males. This could result from the

fact that female WeChat users pay more attention to Alipay, social responsibility, and

other subjects related. It may also because women are more active on social media, and

they are more inclined to establish connections by social media than men (Vermeren,

2015). For the age, 81.1% of the respondents are from 18 to 44 years old, but there are no

answers from people over 65. Students and full-time workers make up the majority and

account for 43.3% each. Due to the large proportion of students, there are 85 people with

a personal income of less than 2800 CNY. In the dividing values of 2800 and 7400, the

percentage of low, medium and high-income samples is 42.2%, 37.8% and 20.0%, where

the three groups of values are relatively well-distributed in terms of income. With the

remarkable improvement of education in China in recent decades, an increasing number

of Chinese receive higher education, so the number of respondents who have not

achieved a college degree is only 15.

Besides, since the questionnaire was spread online, the respondents also have to

answer their geographical location, regional economic level and the answers look

relevant and representatives, such as Guangdong (16.4), Zhejiang (18.9), and Hubei

(14.4). For religion measured by a scale question, the sample average is 2.9 with the

standard deviation of 1.688, which means the respondents are generally not religious. The

reason is that the governing party in China does not encourage religion, especially for the

communists. Overall, the samples are representative covering people from different

19
 financial status, education levels, and from 25 provincial-level regions (there are overall

31 provincial-level regions in mainland China).

Table 1 Descriptive statistic of respondents’ characteristics

Item Frequency Percent (%) Item Frequency Percent (%)
Student 87 43.3 0-2800 85 42.3
Employment
Full time 87 43.3 2800-5600 32 15.9
status
Others* 27 13.4 5600-7400 22 10.9
Male 66 32.8 Income (CNY) 7400-10200 22 10.9
Gender
Female 135 67.2 10200-15800 21 10.5
College degree
35 17.4 15800+ 19 9.5
or below

Education Bachelor’s
106 52.7 0-18 6 3.0
level degree
Master and
60 29.9 Age 18-24 86 42.8
above
Single 137 68.2 25-34 77 38.3
Marriage
Married 64 31.8 35-64 32 16

*. Other situation of employment. e.g. homemaker, part-time, self-employed, unemployed, and retired

Chart 1 location distribution of respondents’ characteristics*

*. Data annotation: province, number of samples, percentage

20
3.4 Measurements

3.4.1 Dependent and independent variables

Empirical studies are used to develop the questionnaire for accuracy. The cited literature

contribute to the survey with a higher degree of reliability and a better-constructed

measurement scale (See Table 2 below). All the items apart from those related to the

personal information are set in the form of the seven Likert levels (Bell et al., 2018;

Likert, 1932), from which “1” equals to “strongly disagree” and “7” equals to “strongly

agree”.

The degree of a firm’s CSR, the independent variable, is operationalized as the

contribution and improvement to the well-being of society offered by the firm. We adopt

the perceptual measure from Hur et al. (2020) and Iglesias et al. (2018) to evaluate the

degree of Alipay’s CSR from its consumers, where five questions are given in the

questionnaire.

This study has three dependent variables. Brand awareness, which is defined as a

reflection to scale how much consumers can recognize and identify the brand in different

situations. Three questions developed by Washburn and Plank (2002) are adapted to

capture the degree of the awareness. Perceived quality, which refers to the consumer

perception of the offerings by the firm in a whole, is tested with question adopted from

Washburn and Plank (2002) with five questions for different aspects. Brand

loyalty implies consumer’s willingness of repeating purchase and recommending the

brand to others, and it is assessed via five questions adopted from Huddleston et al. (2003)

and Washburn and Plank (2002).

The moderator variable, Consumer involvement in CSR, is set to account how much

the customers take part in CSR activities organized by the firm. According to Cha, Yi,

and Bagozzi (2016), one single item is designed to assess the degree of self-involvement

of Alipay’s CSR.

21
 Table 2 Constructs and measure items in the questionnaire

Constructs Measure items Source

CSR1: Alipay is a socially responsible company.

CSR 2: Alipay is concerned with improving the well-being of

Hur et al. (2020)
The degree society.
of a firm’s CSR 3: Alipay behaves responsibly regarding the environment.
CSR CSR 4: Alipay is more beneficial to society’s welfare than
Iglesias et al.
other companies.
(2018)
CSR 5: Alipay contributes to society in positive ways.
AW1: I know what Alipay looks like.

Brand AW2: From many products and services, I can recognize Washburn and
awareness which come from Alipay (rather than other competing brands). Plank (2002)
AW3: I am aware of Alipay.
PQ1: Alipay’s services/products appear to be of very poor
quality.
PQ2: The likely quality of Alipay’s services/products is
extremely high.
Perceived PQ3: The likelihood that Alipay’s services/products would be Washburn and
quality functional is very high. Plank (2002)

PQ4: The likelihood that Alipay’s services/products are

reliable is very high.
PQ5: Alipay’s services/products must be of very good quality·.
BL1: I consider myself to be loyal to Alipay.
BL2: Alipay would be my first choice. Washburn and
Brand BL3: I will not pay to other brands if Alipay is available. Plank (2002)
loyalty BL4: I am very willing to recommend Alipay to my friends.
BL5: I will try to experience other services/products offered by Huddleston et al.
Alipay. (2003)
Consumer
involvement Cha et al. (2016)
CI1: I regularly participate in Alipay’s CSR activities.
in CSR

3.4.2 Control variables

In order to segregate the effects of the independent variable on the dependent variables,

22
some variables are being controlled based on previous studies. The literature review

suggests that individuals’ characteristics usually affect their attitudes toward a brand or

company (e.g. Chen and Green, 2011; Mathras et al., 2016). Firstly, gender, religion,

education level, and personal income are controlled. The principle of division is based on

the condition of Chinese society. Religion is measured by a seven-point Likert Scale with

the question that “ I consider I ’ m religious ” . Education level are set according to the

highest degree that currently can be obtained. Personal income is classified into 7 levels

according to China ’ s social income stratification and proportion (National Bureau of

Statistics of China, 2020).

In addition to that, previous research also suggests that brand competitiveness

impacts customer loyalty (Ahmad et al., 2008; Mechinda et al., 2010), so brand

substitutability is controlled. Brand substitutability is measured by a scale question that

“Apart from Alipay, I can enjoy the same services or products from other companies” on

seven Likert scales.

3.5 Common method variance control

For this research, the main risk affecting reliability and validity refers to Common

method variance (CMV), which means "variance that is attributable to the measurement

method rather than to the constructs the measures represent" (Podsakoff et al., 2003,

p.879), it may influence the estimation of the relationship between the variables. Due to

the potential effects presented by Podsakoff et al. (2003), the issue of CMV is considered

in this research, and methods are used to reduce the influence caused by CMV.

First, the pre-test process plays an essential role in avoiding the inclusion of

confusing, vague, or unfamiliar terms in the wording of questions and the content of

items (Chang et al., 2010). The pre-test, apart from what mentioned above, helps modify

some expressions in which literal translation may bring mistakes in the context of cultural

and language differences (e.g. many “very” characters do not need to be translated in the

23
Chinese context). Second, since most of the questions on the scale are positive, the

reverse questions are arranged in the questionnaire to test whether the respondent’s

process of answering the inquiry is focused and serious. At the same time, reversal items

reduce the impact of respondents’ consistent responses. Third, the questions and control

combinations used to investigate the same factor are scattered in different parts of the

questionnaire. The purpose of this decentralization is mainly to avoid that respondents

give the same answer to questions of the same factor habitually. Fourth, to guarantee the

questionnaire is valid, it needs to meet the condition of passing the two-side polygraph

test from a similar question where 53 answers were eliminated, as mentioned above. Fifth,

for reducing the CMV derived from social expectations, the answering process was set to

be anonymous to avoid the respondents from consciously providing non-completely true

ideas.

3.6 Data analysis technique

Regression analysis is used to test the research hypotheses in this study as it can identify

“whether a particular independent variable affects the dependent variable and to estimate

the magnitude of that effect if any (Aiken et al., 1991, p.2)”. The tool used for this

research is SPSS 25 because it usually provides intuitive and precise output. Cronbach”s

alpha test is used to test the reliability of all the items, exploratory factor analysis is used

to reduce the dimension and verify the construct validity of the factors extracted, and the

regression models are used to test the hypotheses.

24
4. Results

This chapter illustrates the empirical results based on data analysis through SPSS 25.

Quantitative tests and analysis are demonstrated, mainly including factor analysis,

reliability analysis, and regression analysis of the hypotheses.

4.1 Exploratory factor analysis and reliability analysis

Exploratory factor analysis is mainly used to condense the measurement items and extract

all items into several general factors, to reduce the repeated information and improve the

validity (Pallant, 2016). Firstly, the result of the Kaiser-Meyer-Olkin test for the group is

0.941, much higher than the requirement as 0.6 (Kaiser, 1974), implying a great

measurement model for factor analysis. The significance of the Barlett Test of Sphericity

is 0.000, much less than 0.05, indicating that the original data variables are correlated,

and the data is suitable for factor analysis.

Secondly, the reliability and validity of all the relative constructs’ measurement

models are involved (See Table 3). Cronbach’s alpha is 0.939, which is higher than the

standard coefficient as 0.6 (Nunnally, 1978), meaning that the scale used in this study has

internal consistency. The current Cronbach’s alpha is higher than the Cronbach’s alpha

value obtained by removing any item so that all current items can be retained. Among the

KMO values of each variable, the lowest value is 0.886 (AW2), much larger than 0.5. In

Communalities, all values were higher than 0.7, except CSR4 (0.631).

As for the Factor loading, according to Costello and Osborne (2005), to find out the

number of factors affecting the observed variables and analyze the degree of correlation

between factors and observed variables, a factor extraction is done. The minimum value

is 0.693 (CSR1), and the maximum value was 0.854(AW2), both of which were greater

than 0.6, and four groups of factors are successfully extracted. Thus, it can be seen that

25
 the measurements of this model have reliability and consistency, truly reflecting the

condition of the sample.

Table 3. Factor, reliability and validity analysis

Standard Factor Cronbach’s Cronbach’s Alpha
Variables Labels Mean Communalities
deviation Loading Alpha if Item Deleted
CSR1 5.47 1.068 0.749 0.693 0.929
The degree
CSR2 5.28 1.050 0.820 0.753 0.925
of a firm’s
CSR3 5.47 1.077 0.835 0.783 0.942 0.924
CSR
CSR4 5.21 1.003 0.631 0.648 0.942
CSR5 5.41 1.026 0.835 0.760 0.924
AW1 5.11 1.258 0.843 0.784 0.922
Brand
AW2 5.30 1.179 0.900 0.854 0.943 0.902
awareness
AW3 5.50 1.145 0.817 0.822 0.927
PQ1 5.17 1.110 0.844 0.732 0.944
PQ2 5.41 1.088 0.807 0.705 0.948
Perceived
PQ4 5.44 1.103 0.813 0.751 0.956 0.946
quality
PQ5 5.29 1.080 0.851 0.753 0.944
PQ6 5.40 1.119 0.792 0.751 0.948
BL1 4.80 1.285 0.797 0.793 0.907
BL2 4.92 1.152 0.733 0.764 0.913
Brand
BL3 4.52 1.136 0.702 0.778 0.929 0.917
loyalty
BL4 5.20 1.214 0.751 0.714 0.911
BL5 5.06 1.182 0.678 0.714 0.918
Consumer
involvement CI1 4.12 1.468
in CSR

4.2 Correlation analysis

In this study, control variables are also tested in related models. Since some items are not

measured by scales (such as age, gender, and location), compared with the Pearson

correlation coefficient, Spearman’s rank correlation coefficient can transform the original

data into ranking data (Myers et al., 2010), which is more in line with the conditions of

the data in this study. Therefore, we chose Spearman’s correlation coefficient for this

analysis.

26
 Table 4 implies the result of the correlation test. As it can see, among them, some

control variables have significant impacts on dependent variables. For example, gender

has a slightly significant effect on brand loyalty and perceived quality, while education

level has a more substantial impact on brand awareness, brand loyalty, and perceived

quality. The coefficients of the independent variable CSR are all lower than 0.7.

Therefore, according to Pallant (2016), the results illustrate that all variables are

acceptable.

Table 4 Sperman’s rank correlation

GEN IN EDU RL SUB CI CSR AW BL PQ

Gender 1
Income -0.176* 1
Education level 0.105 0.006 1
Religion -0.036 0.072 -0.174* 1
Brand
-0.134 0.070 0.043 0.141* 1
substitutability

Consumer
0.126 -0.038 0.055 0.075 0.071 1
involvement in CSR

The degree of a
0.166* -0.052 0.242** -0.099 -0.055 0.387** 1
firm’s CSR
Brand awareness 0.104 -0.015 0.154* 0.043 0.060 0.309** .0538** 1
Brand loyalty 0.179* -0.001 0.169* -0.025 -0.080 0.358** 0.725** 0.435** 1

Perceived quality 0.172* -0.005 0.214** -0.137 -0.066 0.348** 0.806** 0.532** 0.727** 1

**. p<0.01; *. p<0.05

4.3 Regression analysis

After confirming the correlation between variables, we verify the research hypotheses

through linear regression analysis. The regression is one of the most frequently used

techniques for describing the relationship between the dependent and independent

variables (Pallant, 2016). This study examines the relationships between the degree of a

firm’s CSR, consumer involvement in CSR, and consumer-based brand equity.

27
 Table 5-7 shows the descriptive statistics that contain the correlations between the

tested variables. As can be seen from the tables, all the models passed the ANOVA test,

and their significances are 0.00, which are less than 0.05 as required. In other words, they

are of statistical significance. Also, all independent variables pass the t-test (p<0.05).

In the tables below, Model 1 (without moderation) and Model 2 (with moderation)

represent the results of the regressions. As is seen in the tables, there are positive

relationships between the degree of a firm’s CSR and brand awareness (β=0.754，p<0.01),

the degree of a firm’s CSR and perceived quality (β=0.78，p<0.01), the degree of a firm’s

CSR and brand loyalty (β=0.723，p<0.01). As for moderating effects, the only obvious

one lies in the relationship between the degree of a firm ’ s CSR and brand loyalty ( β

=0.22 ， p<0.01), where R square increases from 0.571 (Model 1) to 0.726 (Model 2),

illustrating that the moderating effect improves the interpretability of the model with

consumer involvement in CSR as the moderator. However, the moderating impact on the

other two connections, where R square of former decreases from 0.412 (Model 1) to

0.353 (Model 2), and R square of the latter slightly increases from 0.452 (Model 1) to

0.456 (Model 2). Hence, H1, H2, H3, and H5 are empirically supported, but H4 and H6

are not confirmed. The results demonstrate that the degree of a firm’s CSR is positively

related to brand awareness, perceived quality, and brand loyalty, and consumer

involvement in CSR positively moderates the relationship between a firm ’ s CSR and

perceived quality.

28
 Table 5. The degree of a firm’s CSR → Brand awareness
Variables Hypothesis Model 1 Model 2
coefficients t coefficients t
Gender -0.064 -0.466 -0.100 -0.742
Income -0.023 -0.734 -0.022 -0.721
Education level 0.068 1.050 0.061 0.971
Religion 0.077* 2.039 0.056 1.487
Brand 0.044 1.095 0.036 0.895
substitutability
CSR H1 0.754** 10.924 0.634** 9.121
CI 0.173* 2.547
CSR×CI H4 -0.103 -1.908
Model Summery
R Square 0.412 0.353
ANOVA
F 22.677 18.845
Sig. 0.000 0.000
**. p<0.01; *. p<0.05

CSR=The degree of a firm’s CSR; CI=consumer involvement in CSR

Table 6. CSR → Perceived Quality

Variables Hypothesis Model 1 Model 2
coefficients t coefficients t
Control Variables
Gender 0.178 1.668 0.064 0.074
Income 0.021 0.852 0.034 1.419
Education level -0.002 -0.042 -0.006 -0.140
Religion -0.031 -1.044 -0.038 -1.541
Brand 0.006 0.194 0.006 -0.219
substitutability
CSR H2 0.784** 00.728 0.941** 20.894
CI 0.338** 7.648
CSR×CI H5 0.220** 4.790
Model Summery
R Square 0.571 0.726
ANOVA
F 41.033 45.600
Sig. 0.000 0.000
**. p<0.01; *. p<0.05

CSR=The degree of a firm’s CSR; CI=consumer involvement in CSR

29
 Table 7. CSR → Brand Loyalty
Variables Hypothesis Model 1 Model 2
coefficients t coefficients t
Control Variables
Gender 0.275* 2.226 0.133 1.730
Income 0.009 0.302 0.015 0.711
Education level -0.011 -0.182 -0.019 -0.524
Religion 0.067 1.959 0.040 1.857
Brand -0.007 -0.191 -0.021 -0.923
substitutability
CSR H3 0.723** 11.639 0.976** 24.542
CI 0.671** 17.215
CSR×CI H6 -0.061 -1.829
Model Summery
R Square 0.452 0.456
ANOVA
F 26.636 20.099
Sig. 0.000 0.000
**. p<0.01; *. p<0.05

CSR=The degree of a firm’s CSR; CI=consumer involvement in CSR

30
5. Findings

This chapter mainly discusses the empirical findings and explains some results that are

not consistent with previous studies concerning the Chinese market’s unique situation.

5.1 CSR and brand equity

5.1.1 CSR and brand awareness

Our empirical results suggest that the degree of a firms’ CSR matters in shaping

consumer-based brand equity. In other words, the degree of a firm’s CSR is positively

related to brand awareness, which means that taking CSR activities helps strengthen the

brand recognition in consumers’ mind, which is in line with the studies by Mattera et al.

(2012) and Martínez et al. (2019), where the positive effects of consumers’ perceptions of

firm’s CSR can be found for brand recognition. This result suggests that CSR activities

can deliver a positive signal towards consumers. Consumers have a stronger brand

awareness when the company substantially engaged in CSR activities, just like Alipay’s

actions to strengthen the image of an excellent product/service (Huang and Sarigollu,

2014; Servaes and Tamayo, 2013). In China, firms are encouraged to initiatively

undertake social responsibilities, and firms that actively fulfill their social obligations are

often reported by the mainstream media, which can also be an effective way of

propaganda to deepen the brand impression in consumer’s minds.

5.1.2 CSR and Perceived Quality

The relationship between the degree of a firm’s CSR and perceived quality is also

suggested to be positive, which is also in line with Martinez’s (2019) findings that CSR

behaviors of a firm enhance perceived quality. This relationship also indicates that in the

Chinese market, CSR can promote the subjective evaluation by consumers (Zeithaml,

1988). These activities work as a signal to society, especially to consumers, enabling

31
consumers to perceive the quality of products and services provided by the firm and

eventually establish a positive image of excellence in their minds (Martinez and Bosque,

2013).

Additionally, combined with some previous studies like Chen and Myagmarsuren

(2011), CSR activities can contribute to a sustainable relationship. For the online

financial services industry, because the services are mainly provided through online

channels on mobile devices, the image of reliability is more direct and effective for

improving perceived quality by internet software than offline industries. This stable and

long-term recognition is of great benefit to formulating a sustainable relationship.

5.1.3 CSR and brand loyalty

Our results reveal that the degree of a firm’s CSR plays a decisive role in shaping brand

loyalty. That is, the more social responsibilities a firm undertakes, the stronger its

consumer loyalty will be. This finding is consistent with He and Lai’s (2014) and

Moisescu’s (2015) results. Firms’ CSR activities are usually multiple and sustainable with

a certain degree of sociality, helping to keep long-term interactions with consumers. This

interaction can satisfy the expectation through the user experience of high quality and

reflect the company’s sincerity, as Lin (2010) argues. This relationship can also

encourage consumers to pay for the brand more in their lives and increase loyalty, with a

profound impression of humanistic care.

5.1.4 The role of consumer involvement in CSR

The result shows that consumer involvement in CSR positively moderates the

relationship between the degree of a firm’s CSR and perceived quality, which means the

more participation the consumers, the stronger the impact of the degree of a firm’s CSR

on perceived quality. Especially for the service sector, consumer involvement will

increase the interaction of businesses and consumers. When planning to encourage

32
consumers to participate in CSR activities, the firm will consider more from the

perspective of the user experience. Consequently, consumers are likely to experience

considerate service, and the perceived quality will be increased.

We also find that consumer involvement in CSR does not play a moderating role in

the relationship between the degree of a firm’s CSR and brand awareness. This means

consumer involvement cannot shape the impact of a firm’s CSR on brand awareness. It

may be that CSR activities concerning consumer involvement, such as environmental

protection and fund-raising projects, do not have enough advertising so that the main

participants are the existing consumers and rarely involve new consumers to the brand.

Therefore, it does little help improve consumer’s brand recognition, especially to make

new consumers more impressed by their CSR involvement.

Finally, the moderating effect of consumer involvement in the relationship between

the degree of a firm’s CSR and brand loyalty is not significant, challenging the result

from Cha et al. (2016) that consumer involvement in CSR moderates the indirect

influence of CSR on brand loyalty. This suggests that consumer involvement in CSR can

not enlarge the positive effects of a firm’s CSR on brand loyalty. The reason can be that,

in the Chinese market, consumer involvement in CSR has only emerged in recent years,

but the formation of consumer brand loyalty is a long-term process so that there is a time

lag between the occurrence of these two factors: consumer involvement and loyalty. That

is to say, after being involved in a firm’s CSR, it takes time for consumers to develop the

intention and actual behaviors of repeat purchases and recommending the brand to others,

thereby formulating customer loyalty. At the same time, Alipay is the firm with the

highest market share that some of the consumers use it every day, so they are not aware

that they are involved in the firm’s CSR when enjoying the services, which may affect

our empirical research.

33
6. Conclusion

6.1 Main findings and managerial implications

This research, drawing on stakeholder theory and signaling theory, is aimed to explore

how the degree of a firm’s CSR influences consumer-based brand equity, including brand

awareness, perceived quality, and brand loyalty, as well as to examine the role of

consumer involvement in these effects. Based on the data collected from Alipay’s

consumers by online questionnaires, it is found that the degree of a firm’s CSR has

positive impacts on brand awareness, perceived quality, and brand loyalty. Meanwhile,

consumer involvement in CSR leads to a more substantial effect on the degree of a firm’s

CSR on perceived quality, but its moderating impact on the other two relationships are

not confirmed. This suggests that CSR can positively signal consumers to influence

consumer-based brand equity, and this signaling effects of CSR on perceived quality can

be enlarged by consumer involvement in CSR.

There are some implications for managers as well. Firstly, firms are suggested to

take the initiative to assume their social responsibilities and regard it as one of the

strategies to promote brand equity, which does not harm the actual benefits but is very

conducive to improving their brand value. From a long-term perspective, firms can

establish good relationships with external stakeholders through CSR activities, increase

the brand reputation, and word-of-mouth, which finally promotes the brand value.

Secondly, firms may develop the form of CSR initiatives by introducing consumer

involvement, which shortens the distance between firms and consumers. Especially for

service-oriented firms, the interaction with consumers leads to a deeper understanding of

consumer demands to provide thoughtful services and improve consumer perceived

product quality. Finally, firms are encouraged to pay attention to the promotion of CSR

activities to attract a broader range of consumers and enhance brand awareness.

34
6.2 Research contributions

This study has several contributions to the literature and theory. Firstly, this study invokes

a relatively under-explored theoretical view in the research on CSR and signaling theory

(Spence, 1973), which enables us to advance the research on CSR and to extend the

application of signaling theory in a new research area. Signaling theory is well used to

explore different research areas such as entrepreneurship, strategic management, human

resource management, and marketing. However, it has rarely been adopted in CSR

literature. Unlike previous studies, we integrate signaling theory and stakeholder theory

to examine the effects of the degree of a firm’s CSR on consumer-based brand equity.

Our study suggests that CSR can act as a signal to provide additional information for

consumers when evaluating the firm’s brand and highlights the signaling role of CSR.

Secondly, this study uncovers the relationship between the degree of a firm’s CSR

and consumer-based brand equity by using the signaling theory, which extends the

literature on CSR and branding. In the existing literature, there is a lack of research on the

relationship between CSR and brand equity and its impact mechanism, but this thesis

provides a new perspective (e.g. signaling theory) to identify the effects of the degree of a

firm’s CSR on consumer-based brand equity.

Thirdly, this research enriches the literature on CSR by introducing the variable of

consumer involvement in CSR. In recent years, more and more consumers are involved

in the firm’s CSR, but few academic studies regard consumer involvement in CSR as an

important variable affecting the function of CSR. Our study identifies that the effect of

CSR on perceived quality depends on the degree of consumer involvement in CSR.

Therefore, this paper contributes to CSR related research by discovering the moderating

effect of consumer involvement in CSR between the degree of a firm’s CSR and

perceived quality.

35
6.3 Limitation and future research

Some limitations exist in this study. Different consumer characteristics lead to different

awareness and understanding of CSR so that consumer attitudes may be inconsistent in

the data collection process. Future studies may classify consumers based on their

heterogeneity and investigate the differences in their perception of the firm’s CSR

information to increase the theoretical and application value. Meanwhile, after posting

the questionnaire on WeChat, it takes more time to receive enough valid answers than

expected, this may result from some WeChat users selectively ignore our invitation.

Another difficulty is that the sample of answers we receive from the middle-aged

and elderly consumer groups is relatively small, which may weaken the sample’s

representativeness. In this study, questionnaire links are sent to the 14 chat groups

dominated by middle-aged and elderly consumers. We also encourage the respondents to

invite their relatives and friends to participate in this survey. This means that the age of

consumers may have a potential impact on CSR perception and consumer involvement.

Thus, future research can extend the analysis to more specific samples, like the older

generation.

Besides, in this study, we analyze the impact of a firm’s CSR in online financial

service markets, but the results of this study are not necessarily applicable to other

industries. Therefore, the conclusion of this paper may be incomplete to a certain extent,

and whether it applies to other countries and industries remains to be further verified.

Future research can also study the moderating effect of consumer involvement in CSR on

consumer-based brand equity in other firms, industries, or countries, where consumers

may show different preferences based on specific characteristics.

36
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Appendix
Appendix 1: Questionnaire in English
Hello! Thank you very much for your participation in the survey of consumers' attitudes

towards corporate social responsibility based on Alipay. All information in this survey is

strictly confidential and is for scientific research purposes only. The answer is expected to

take five minutes. There are no standard answers to this questionnaire, either good or bad

answers, so please fill in according to your true judgment.

1.What is your gender?
A. Male B.
Female
2．Your age?
A.0-18 B.0-24 C.25-34 D.35-44 E.45-54 F．55-64 G.65+
3．Your live location?
(Chosen by the respondent)
4．Monthly income
A.0-280 B.2800-560 C.5600-740 D.7400-102 E.10200-130 F.13000-158 G.15800+
0 0 0 00 00 00
5．Employment Status
A. Student B. Housing work C. Part-time D. full-time
E. Retired F. Self-employed G. Unemployed H. Others
6. Education Status
A. High school and B. College C. Bachelor D. Master E．PhD and higher
lower
7．Marriage Status
A. Single B. Married without children C. Married with children
8．I have participated in corporate social responsibility activities of Alipay (China) Network
Technology Co., Ltd. (hereinafter referred to as Alipay), such as online donations on Alipay
platform, Ant Forest activities?
* Corporate social responsibility refers to the enterprise not only pursuing profits, but also making behaviors that are
beneficial to its society and environment.
A. Yes B. No
9. Please select the option that best matches your true feeling about the statement

each, where: 1= Strongly Disagree, 2 = Disagree, 3=Slightly Disagree, 4 =Neutral, 5

= Slightly Agree, 6 = Agree, 7 = Strongly Agree

45
I think I have religious belief(s) 1 2 3 4 5 6 7

Apart from Alipay, I can get the same service from other brands 1 2 3 4 5 6 7

Alipay makes more contributions to society than other brands 1 2 3 4 5 6 7

I probably know about Alipay 1 2 3 4 5 6 7

It’s hard to think of Alipay ’s brand image in my mind 1 2 3 4 5 6 7

As long as there are products / services provided by Alipay, I will not use other
1 2 3 4 5 6 7
similar brand products (such as WeChat Pay)
I often get involved in Alipay's corporate social responsibility related activities 1 2 3 4 5 6 7

I am willing to recommend Alipay to others 1 2 3 4 5 6 7

I think Alipay ’s products / services must be of high quality 1 2 3 4 5 6 7

Alipay is very likely to provide useful products / services 1 2 3 4 5 6 7

Alipay is a socially responsible brand 1 2 3 4 5 6 7

I know what brand Alipay is like 1 2 3 4 5 6 7

Products / services provided by Alipay is of poor quality 1 2 3 4 5 6 7

I will try to experience more products / services provided by Alipay 1 2 3 4 5 6 7

I am loyal to the brand Alipay 1 2 3 4 5 6 7

Alipay provides high-quality products / services 1 2 3 4 5 6 7

When it comes to Alipay, I can quickly think of its characteristics and attributes 1 2 3 4 5 6 7
Among many products and services, I am capable to identify which products
1 2 3 4 5 6 7
are from Alipay (not competitors)
Alipay is very likely to provide reliable products / services 1 2 3 4 5 6 7

Alipay is my first choice 1 2 3 4 5 6 7

Alipay contributes to the society in a positive way 1 2 3 4 5 6 7

Alipay owns a sense of responsibility for protecting the environment 1 2 3 4 5 6 7

Alipay focuses on improving overall social welfare 1 2 3 4 5 6 7

I can quickly associate with Alipay ’s trademark and logo 1 2 3 4 5 6 7

The possibility of Alipay providing high-quality products / services is very high 1 2 3 4 5 6 7

46
 Appendix 2: Questionnaire in Chinese

您好！非常感谢您参与基于支付宝的消费者对企业社会责任态度的调查。本次调查

所有信息严格保密，仅供科学研究之用。答题预计需要 5 分钟。 本问卷没有标准答

案，任何答案没有好坏之分，请根据您的真实判断填写。

1. 您的性别是？
A. 男性 B. 女性
2．您的年龄是？
A.0-18 B.0-24 C.25-34 D.35-44 E.45-54 F．55-64 G.65+
3．您在国内的居住地是？
（由受访者选择）
4．月收入
A.0-2800 B.2800-5600 C.5600-7400 D.7400-10200 E.10200-13000 F.13000-15800 G.15800+
5．受雇状况
A. 学生 B. 全职家庭工作 C. 兼职工作 D. 全职工作
E. 退休 F. 自雇 G. 失业 H. 其它
6. 教育状况
A. 高中及以下 B. 专科 C. 本科 D. 硕士 E. 博士及以上
7．婚姻状况
A. 单身 B. 已婚未育 C. 已婚已育
8．我参加过支付宝（中国）网络技术有限公司（以下简称支付宝）的企业社会责任行为，例如
支付宝平台的线上捐款、蚂蚁森林活动？
*企业社会责任指企业不只追求利润，更要做出对所在社会和环境有益的行为。
A. 是 B. 否

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9. 请从下列选项中选择您对于以下描述的认同程度，其中 1=非常不赞同，2=不赞

同，3=不太赞同，4=既不赞同也不反对/中立，5=比较赞同，6=赞同，7=非常赞同
我认为我有宗教信仰 1 2 3 4 5 6 7
除了支付宝，我还能在其他品牌获得同样的服务 1 2 3 4 5 6 7
支付宝比其他品牌对社会有更多贡献 1 2 3 4 5 6 7
我大概知道支付宝 1 2 3 4 5 6 7
我难以在脑海里联想到支付宝的品牌形象 1 2 3 4 5 6 7
只要有支付宝提供的产品/服务，我不会再使用其它同类品牌产品
1 2 3 4 5 6 7
（比如微信支付）
我经常参加支付宝的企业社会责任相关的活动 1 2 3 4 5 6 7
我愿意把支付宝推荐给其他人使用 1 2 3 4 5 6 7
我认为支付宝的产品/服务必须是高质量的 1 2 3 4 5 6 7
支付宝提供有用的产品/服务的可能性很大 1 2 3 4 5 6 7
支付宝是个对社会负责的品牌 1 2 3 4 5 6 7
我知道支付宝是什么样的品牌 1 2 3 4 5 6 7
支付宝提供的产品/服务质量差 1 2 3 4 5 6 7
我会尝试体验支付宝提供的更多产品/服务 1 2 3 4 5 6 7
我对支付宝这个品牌是忠诚的 1 2 3 4 5 6 7
支付宝提供的产品/服务质量高 1 2 3 4 5 6 7
提到支付宝，我很快就能联想到其特点和属性 1 2 3 4 5 6 7
在众多产品和服务中，我有能力识别哪些是来自支付宝的产品
1 2 3 4 5 6 7
（而非竞争对手的）
支付宝提供可靠的产品/服务的可能性很大 1 2 3 4 5 6 7
支付宝是我的第一选择 1 2 3 4 5 6 7
支付宝以积极的方式贡献社会 1 2 3 4 5 6 7
支付宝对保护环境有责任感 1 2 3 4 5 6 7
支付宝注重提高社会整体福利 1 2 3 4 5 6 7
我可以很快联想到支付宝的商标图案 1 2 3 4 5 6 7
支付宝提供高质量产品/服务的可能性非常高 1 2 3 4 5 6 7

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