Do Corporate Social Responsibility (CSR) Initiatives Boost Customer Retention in The Hotel Industry? A Moderation-Mediation Approach

Journal of Hospitality Marketing & Management
ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/whmm20
Do Corporate Social Responsibility (CSR) initiatives

boost customer retention in the hotel industry? A
moderation-mediation approach
Shalini Srivastava & Nidhi Singh
To cite this article: Shalini Srivastava & Nidhi Singh (2020): Do Corporate Social Responsibility
(CSR) initiatives boost customer retention in the hotel industry? A moderation-mediation approach,
Journal of Hospitality Marketing & Management, DOI: 10.1080/19368623.2021.1841705
To link to this article: https://doi.org/10.1080/19368623.2021.1841705
Published online: 02 Dec 2020.
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JOURNAL OF HOSPITALITY MARKETING & MANAGEMENT
https://doi.org/10.1080/19368623.2021.1841705
Do Corporate Social Responsibility (CSR) initiatives boost

customer retention in the hotel industry? A moderation-mediation
approach
Shalini Srivastava and Nidhi Singh
Jaipuria Institute of Management, Noida, India
ABSTRACT KEYWORDS
This study investigates the direct and indirect associations between CSR CSR; company reputation;
and customer retention, with the mediating effect of C-C (Customer- customer-company
Company) identification, company reputation, and customer satisfaction. identification; customer
satisfaction; stakeholder
A sample of 384 customers from the hotel industry was taken for the
approach
present study. The result found a significant mediating effect of the
aforementioned variables to measure the impact of CSR activities on
customer retention. The study also tested and confirmed moderated
mediation effect of C-C identification between CSR and customer reten
tion via company reputation. The study contributes to the existing litera
ture on stakeholder theory, and highlights its association with social
identity theory, social exchange theory, and signaling theory, with respect
to CSR activities in the hospitality industry. Encouraging a holistic
approach to strategic CSR in hotels, this study contributes a framework
of stakeholder roles, emanating from stakeholder responsibility and sta
keholder involvement in CSR in the hotel sector, that will be of interest to
both academics and practitioners.
本研究探讨了CSR与顾客保留的直接和间接关系, 并以C-C（顾客-公
司）认同、公司声誉和顾客满意度为中介效应. 本研究以384位酒店
业顾客为研究对象. 结果发现, 上述变量在衡量CSR活动对顾客保留的
影响时具有显著的中介作用. 本研究还验证了顾客-公司认同在顾客忠
诚与顾客保留之间的中介作用. 本研究有助于现有的利益相关者理论
文献, 并强调其与社会认同理论、社会交换理论和信号传递理论在酒
店业CSR活动中的关联. 本研究鼓励对酒店的CSR 战略采取一种整体性
的方法, 这项研究提供了一个利益相关者角色的框架, 该框架源于利益
相关者在酒店行业CSR中的责任和参与, 这将引起学术界和从业人员
的兴趣.
Introduction
A hotel’s success is judged when the front desk staff get an opportunity to greet a guest saying,
“Welcome Back”.
In India, hospitality is a very old tradition and ‘Guest is like a god’ is the tagline adopted by
the Indian Hospitality Industry.1 India is considered among the most diverse places in the
world and offers several cost-effective destinations to guests, with cultural, heritage, natural
CONTACT Nidhi Singh nidhi.singh@jaipuria.ac.in Jaipuria Institute of Management, Noida, Uttar Pradesh 201309,
India.
© 2020 Taylor & Francis Group, LLC
2 S. SRIVASTAVA AND N. SINGH
attractions (Gupta, 2017). India’s hospitality sector, and specifically the hotel industry, is
among the top 10 sectors in India, and is expected to reach 35 trillion by 2029.2 Regardless
of hotel industry contribution to employment generation and economic growth, several
studies confirmed that hotels often have been criticized by customers for the large con
sumption of natural resources for example, water, energy, and food, to provide the best
guest experience (Cheng et al., 2019; Kim & Kim, 2017; Rather, 2018). This may lead to
a negative environmental impact on the hotel business, and may affect the financial and
customer service benefits to hotels (Davvetas & Diamantopoulos, 2017). Various studies
shared that consumers care about the green credentials of hotels and green practices to
reduce the impact on the environment (Cheng et al., 2019; Rather, 2018). The hospitality
industry in India is changing its practices, led by the expectations of consumers, and trying
to create differentiating strategies to gain customers’ support. CSR is one such initiative that
is taken as a strategic marketing and management tool by companies of high repute
(Bhattacharya & Sen, 2003; Liu et al., 2010; Nexxar, 2018; Rhou & Singal, 2020).
According to the European Commission, CSR is defined as an observance of companies
toward social and environmental concerns of their stakeholders, on a voluntary basis (Lai
et al., 2015). The foundation of corporate social responsibility is based on economic
benefits, i.e. be profitable, all the remaining philanthropic, ethical, and legal responsibilities
rely upon this (Carroll, 1979). Moreover, the customer is the only stakeholder who
generates revenues and therefore, is considered highly valuable for a firm’s performance
metric (Rivera et al., 2016). A large number of studies confirmed that customer retention is
important for the success of a hotel since the cost of retention of an existing customer is
always lower than acquiring a new customer, considering searching cost, marketing cost,
integration cost, etc. (Rahimi & Kozak, 2017). Therefore, studying CSR from the customer’s
viewpoint and understanding the impact of CSR on customers’ retention is very important
to achieve the economic benefits of CSR.
CSR practices are highly significant to the hotel sector because the sector provides
intangible services that are judged by customers on quality, and goodwill created by social
initiatives. Social initiatives provide reputational benefits to hotels, which further leads to
several positive outcomes including brand image and consumer’s loyalty by revisiting,
paying more, making recommendations, and consumer’s willingness to pay more for
sustainable hotels offering organic products, etc. In a few cases, customers have been
found ready to overlook minor service failures in such places (Kotchen & Moon, 2011).
Each of these outcomes has the potential to enhance the profitability of a hotel (Kim & Kim,
2017). The sector has started implementing various corporate social responsibility (CSR)
practices such as efficient use of energy, green practices in hotels, efficient use of natural
resources, fair treatment to employees, ethical services, etc., to gain customers’ loyalty and
reputation (Farmaki, 2019; González-Rodríguez et al., 2019). A large number of studies
show that the firms which are actively engaged in CSR activities have high reputational and
financial benefits in the long term (Carroll & Shabana, 2010; Davvetas & Diamantopoulos,
2017; Farmaki, 2019; Theodoulidis et al., 2017). On the contrary, many studies also con
firmed that hotels that mainly focus their CSR efforts on philanthropic areas are unlikely to
receive customers’ support toward such CSR activities (Bhattacharya & Sen, 2004).
Moreover, the related concept of greenwashing is widely discussed in academic literature,
which details false claims or misleading CSR reporting by companies for the sake of
promotion and to gain competitive advantage (De Freitas Netto et al., 2020; Rivera et al.,
JOURNAL OF HOSPITALITY MARKETING & MANAGEMENT 3
2016; Servera-Francés & Piqueras-Tomás, 2019). Once exposed, firms may face customer’s
dissatisfaction or low retention. Therefore, it is observed that the relation between CSR
efforts and customer’s retention is not only direct and also includes some significant factors
in the relationship (Saeidi et al., 2015).
Existing hospitality studies mainly focus on the direct relation between CSR and custo
mer retention, but ignore some influential factors in the process; this makes the results
deficient (Alamgir & Nasir Uddin, 2017; Wang, 2020). In line with this, the study presents
a comprehensive framework, including the mediating effect of three distinct and significant
factors, each derived from social identity theory (C-C identification), signaling theory
(company reputation), and social exchange theory (customer satisfaction), to measure the
indirect association between CSR practices and customer retention. The present study
proposes the following key research questions:
(1) How are CSR practices mediated by C-C identification, company reputation, and
customer satisfaction, to influence customer retention in the hotel industry?
(2) How does C-C identification moderate the mediating impact of company reputation
between CSR and customer retention?
The study adds to the existing literature by providing significant theoretical and practical
insights on CSR in hotels. On the one hand, understanding the role of CSR in hotels in
strengthening customer retention by integrating a few crucial dimensions, can lead to the
development of industry-specific theoretical approaches. On the other hand, innovative and
practical application of stakeholder theory by understanding stakeholder interests may be
gained, promoting a holistic approach to CSR implementation in hotels and contributing to
the long-term sustainability of the sector. The paper is divided into five parts. The first part
deals with an introduction; the second part reviews the literature of the main constructs; the
third part presents a conceptual framework, hypothesis development; the fourth part deals
with methodology and data analysis. The final part of the study includes discussion,
implications, limitations, and suggestions for future research.
Conceptual background
Stakeholder approach to corporate social responsibility
CSR is often perceived as a socially responsible act, so the companies involved in CSR
initiatives are considered valuable for all the stakeholders including employees, business
partners, and especially, customers, since CSR acts have an enormous impact on customer-
related outcomes (Bhattacharya & Sen, 2004). Three types of CSR approaches are often
talked about viz., stakeholder approach (Basu & Palazzo, 2008; Farmaki, 2019); perfor
mance – oriented approach (Kang et al., 2016) which focuses on the relationship among
CSR activities, company strategy, and required performance; and motives-oriented
approach (Basu & Palazzo, 2008) which focusses on the results. Stakeholder’s approach is
generally favored by authors while examining CSR because it includes the claims of all
internal and external stakeholders who have a direct or indirect interest in the company
(Peloza & Papania, 2008). Freeman (1984), who first introduced stakeholder theory, defines
stakeholders as “a group or individual who have claims and can be affected by the actions or
performance of a company.” The theory recommends that a firm should include all
stakeholders including customers, employees, communities, etc., in their decision-making
activities (Theodoulidis et al., 2017). Stakeholder’s theory of CSR is found appropriate in
many ways: First, it suggests that a firm’s success depends on both economic or non-
economic benefits of CSR that are provided to all stakeholders (Benavides-Velasco et al.,
2014; Brown & Forster, 2013). This confirms that stakeholders expect the firms to be
involved in social programs and support CSR for several economic or non-economic
benefits (Wolter et al., 2017). Second, stakeholder theory in CSR was further supported,
in line with the instrumental stakeholder holder approach, which defines companies’ CSR
activities as a source of promoting the economic wellbeing of each stakeholder. On the other
hand, the normative stakeholder approach explains the moral and ethical obligations of
firms toward their stakeholders Jamali. Hence, stakeholder theory, which is based on the
principle that each stakeholder’s interest matters, is given high attention in academic
literature (Famiyeh et al., 2016; Rhou & Singal, 2020; Theodoulidis et al., 2017).
Hospitality researchers too have emphasized on stakeholder theory in explaining CSR
practices (Farmaki, 2019; Gao & Mattila, 2014). Studies confirmed that stakeholder theory
helped in identifying sustainable issues in the hospitality sector and suggested policies based
on the expectations of each stakeholder (González-Rodríguez et al., 2019; Kang et al., 2010).
However, most hospitality studies selectively applied the theory within hotels by explaining
opportunities or challenges associated with it (Kang et al., 2012; Kapoor, 2017; Roberts,
1992). However, there are some significant studies that investigated instrumental views and
measured the influence of CSR practices on stakeholder’s perception (Ghaderi et al., 2019;
Hur et al., 2020).
Social identity theory emerges as an important theory in explaining CSR and measuring its
impact on stakeholders (Abdullah et al., 2017). According to the theory, the social identity of an
individual occurs when his/her belief about an organization or firm becomes self-identifying
(Pratt, 1998). A large number of studies talked about social identity theory (Hur et al., 2020; Liu
et al., 2010; Tuškej et al., 2013; Wolter et al., 2017) and confirmed that individuals who are not
formal members of the organization such as customers can also develop organization identity as
self-identity (Yang et al., 2017). While examining hotel’s CSR practices in social identity theory,
customer-company identification (C-C identification) was assessed by various researchers, for
defining or satisfying customer’s self-identity with the hotel (Bhattacharya & Sen, 2003; Fatma
et al., 2018; Marin et al., 2009; Martínez & Del Bosque, 2013). The concept discussed engage
ment of customers with the hotel’s actions, green initiatives, and causes that prompted them to
support various favorable, or sometimes unfavorable, the behavior of the hotel (Rather, 2018).
Various hospitality studies confirmed that hotels that are actively engaged in CSR practices
provide meaningful social identities to consumers which satisfies their self-definitional needs,
leads to positive consumer behavior and support to the organization (Fatma et al., 2018;
Ghaderi et al., 2019; Martínez & Del Bosque, 2013).
Stakeholder foci CSR practices are widely discussed under signaling theory (Connelly
et al., 2011) which explains that CSR positively influences a firm’s reputation. Signaling
theory explains that company reputation is built upon elements such as public opinion,
market credibility, trust, and stakeholder’s expectations (Miles & Covin, 2000). A large
number of hospitality studies states that hotels who take into consideration social and
environmental aspects while doing business, practice CSR by offering high quality and
environment-friendly services, green ambiance, etc., signaling that the hotel is socially
responsible; this enhances the firm’s reputation (Kucukusta et al., 2013; Miles & Covin,
2000; Su et al., 2017; Zhang et al., 2020). Several examples are available on various CSR
activities done by hotels and restaurants in India which not only helped the establishments
to gain customer’s attention but also enhanced reputation (See Table 1). In a similar
manner, CSR practices can create a positive relationship with customers while increasing
the hotel’s reputation. There are studies which confirmed that hotels whose CSR activities
focus on the interests and economic benefits of all stakeholders can give a positive signal
and increase the firm’s reputation in the long run (Ghaderi et al., 2019; González-Rodríguez
et al., 2019; Kim & Kim, 2017; Taj, 2016). On the contrary, when firms’ CSR efforts focus on
philanthropic dimensions such as charity, social issues, etc., over other interests of stake
holders, it brings huge ambiguity among stakeholders about companies’ CSR efforts and its
consequences for them (González-Rodríguez et al., 2019; Raj, 2016; Rhou & Singal, 2020).
Finally, stakeholder theory closely relates with social exchange theory which basically
talks about mutual benefits derived from an activity between two or more groups or
individuals (Adams, 1965; Homans, 1961). The theory argues that during the exchange, if
parties are mutually treated equal, the outcome is satisfaction (Oliver, 1997). Some sig
nificant hospitality and tourism studies linked social exchange theory with CSR activities
and talked about social exchange benefits such as organization trust, customer satisfaction,
and loyalty (purchasing product or services, customer retention, etc.), in exchange for
economic or noneconomic benefits received from the hotels (Cheon & Cheon, 2016;
Rather, 2018; Su et al., 2017). According to social exchange theory, stakeholders expect
long-term mutually beneficial association with a firm (Zhao et al., 2016). When they
perceive that the hotel’s CSR efforts are aligned with stakeholders’ wellbeing, they feel
satisfied and exchange benefits by showing a favorable attitude (McGinley et al., 2017).
However, social exchange theory is widely discussed in the context of employees when
examining CSR in hotels (Jang et al., 2017; McGinley et al., 2017), but very limited
discussion happened on customers’ perception (Rhou & Singal, 2020). Expectation con
firmation theory is another theory that is used by researchers while assessing CSR practices
(He & Li, 2011). According to the theory, when companies involved in CSR confirm or
exceed the expectations of customers, they are found to be more satisfied with the organiza
tion’s products or services (Martínez & Del Bosque, 2013).
There is significant research in CSR in the field of the hospitality sector (Farrington et al.,
2017; Rhou & Singal, 2020) which provides significant insights into CSR within hospitality.
A large number of studies discussed various approaches/concepts while explaining the impact
of CSR activities of hotels on consumers’ behavior (Cheng et al., 2019; González-Rodríguez
et al., 2019; Su et al., 2017; Yang et al., 2017). There are studies which looked for drivers of
stakeholders’ approach to CSR in hotels (Chen & Lin, 2015; McGinley et al., 2017), which may
be customers’ perception, attitudes, and satisfaction (Gao & Mattila, 2014; Kang et al., 2012) as
well as employees’ perceptions toward their organization (Fu et al., 2014; Luu, 2017; McNamara
et al., 2017; Park & Levy, 2014; Zientara et al., 2015). Despite wide literature on CSR, a lack of
clarity exists on what CSR means to each stakeholder (Rhou & Singal, 2020). Majorly, these
studies talked about various definitions of CSR, or tried to associate with stakeholders’ expecta
tions (Luu, 2017; Park & Levy, 2014). Moreover, most of the studies suggested only the direct
impact of a hotel’s CSR initiatives on customer’s retention, which were proven impractical or
idealistic in academic researches (Marín & de Maya, 2013; Tuškej et al., 2013). However, there
are a few significant works which confirmed the indirect effect of CSR on consumer behavior
6
S. SRIVASTAVA AND N. SINGH
Table 1. Overview of the top five hotel companies in India.

Total value of Indian hotels: $ 658 million in 2019 Ranking (out of 10)
Market Financial performance (Net Make My Yatra. Trivago
Name of Hotel CSR initiatives Share profit Margin in 2019) Trip.com com N.V.
The Indian Hotels Company Limited: Taj hotels, Employee Volunteering, Taj Public Service Welfare Trust, 25% 9.48% More than 8
resorts and palaces (Tata group) Sustainability initiatives
EIH Limited (Oberoi hotels and resorts) Partnership with SOS Children’s Villages, Project Saksham, health 17% 7.3% More than 7
and wellbeing
HLV Ltd. (Leela hotels resorts palaces) Labor colony, Kerala relief project, Pooja and lunch at Alang with 0.6% −24% More than 7
labor and staff, Leela Chowk, world literacy day
Bharat Hotels (Lalit hotels and resorts) Project Disha, Subros Education Society, The Blind School and The 5% 3.63% More than 7
Spastic Society, SEEDS
ITC Welcome group (ITC group) ITC Green Center, greening of the supplying chain, ECO educational 1.1% 27.7% More than 8
games, ECO
Authors compilation (data collected from various sources such as hotels websites, moneycontrol.com, make my trip, trivago.in, yatra.com, brand equity, etc.)3
(Chiu & Sharfman, 2011; Hur et al., 2020; Saeidi et al., 2015; Zhao et al., 2016) but, limited the
research to one theory or dimension in the hotel context (Farmaki, 2019; Su et al., 2017).
Stakeholder’s approach is discussed in a few significant Indian studies considered very impor
tant (Kapoor, 2017; Sharma & Mishra, 2018). These studies found high involvement of
stakeholders with companies that are actively involved in CSR, resulting into stakeholders’
engagement, finally leading to high corporate performance (Kapoor, 2017; Mir & Shah, 2018;
Sharma & Mishra, 2018). In addition, no known study combined social identity theory,
signaling theory, and social exchange theory, to create a comprehensive framework for measur
ing the indirect relationship between CSR efforts and consumer behavior. The present study
aims to fill this gap.
Conceptual framework and hypotheses development

Figure 1 explains the conceptual model which deals with the research gaps that were
identified and derived from a review of the literature.
Mediating effect of C-C-identification, company reputation and customer satisfaction

Bhattacharya and Sen (2004) were the first to confirm that CSR practices and their impact on
customers’ reactions are not always direct. Later, a large number of studies supported the
results and suggested that CSR and customer outcomes are influenced by several factors
(Ghaderi et al., 2019; Liu et al., 2010; Saeidi et al., 2015) that assist in converting CSR activities
into related outcomes for customers (García de Leaniz & Rodríguez Del Bosque Rodríguez,
2015). Thus, we propose that the relationship between CSR and customer’s retention is not
only direct but also mediated. In this context, three distinct variables, C-C identification,
company reputation, and customer satisfaction, are included as mediating variables in the
relationship between CSR efforts and customer’s reaction (retention). Numerous previous
Figure 1. Conceptual framework.

studies confirmed that C-C identification, company reputation, and customer satisfaction are
outcomes of CSR (Hur et al., 2020). In addition, the evidence is available which states that
customer’s reaction (loyalty/retention) is also positively influenced by these variables.
Therefore, the present study used them together in analyzing the relationship between CSR
and customer retention.
Customer-company identification (C-C identification) is considered one of the strongest
relations between a company and its customer (Wolter & Cronin Jr, 2017). There are
a number of consumer behavior studies where the importance of C-C identification was
discussed in relation to consumer’s perception toward a firm’s performance (I. Ali et al.,
2019; Antón et al., 2007; Bhattacharya & Sen, 2003; Davvetas & Diamantopoulos, 2017).
There is a tendency in individuals to create a social identity beyond their personal identity,
which they use to categories themselves in the social context (Tuškej et al., 2013). A large
number of studies examined the social identity of an individual within the scope of an
organization’s identity, to measure the sense of belongingness among stakeholders (García
de Leaniz & Rodríguez Del Bosque Rodríguez, 2015; Hur et al., 2020; Wolter&Cronin,
2016). The degree of belongingness among stakeholders is developed based on corporate
actions toward meeting their expectations (Hur et al., 2020). For the hospitality sector, C-C
identification is strongly found among formal (employees) members which are directly
linked with hotels’ operations, or can even influence informal(customers)stakeholders who
are not formal members of the hotel(Liu et al., 2010).It is due to the good image of the hotel
and high credibility that these informal members develop self-identity which causes them to
support various favorable or even unfavorable actions of the firm (Rather, 2018).This
further positively influences various customer’s outcomes such as customer retention,
revisit intention, positive word of mouth, loyalty, etc.(Brown&Forster,2013;Famiyeh et
al.,2016; Gao&Mattila,2014).A large number of studies confirmed that CSR practices help
hotels to establish a good image, which they use to promote self-identity and self-categor
ization among customers(Alamgir & Nasir Uddin, 2017; Jamali, Wang, 2020).CSR pro
motes a firm’s social performance more than its financial performance, which is used by
customers to relate their self-
identity with the social identity of the firm and support the firm’s actions by showing loyalty
(Dewnarain et al., 2019; Liu et al., 2010). Customers are more likely to favor hotels that
follow stakeholder-focused CSR practices and promote C-C identity among their members
(Ghaderi et al., 2019; Rahimi & Kozak, 2017). Extensive literature exists which states that
CSR enhances C-C identification of a customer with a firm, which further leads to positive
customer’s reaction (retention). Therefore, the current study proposes:
H1: Customer-company identification mediates the relationship between CSR efforts and
customer’s retention.
Corporate reputation examines the level of stakeholder’s expectations, met by firms from
their initiatives, products, and services (Kim & Kim, 2017). Definition of reputation differs
with perceptions of different stakeholders, but all the dimensions discuss the firm’s cred
ibility as a central point (Ghaderi et al., 2019; Kucukusta et al., 2013). The reputation of
a company determines its external perception, which is measured through its credible
actions (deliver what is promised), and if continually repeated, leads to high customer
retention (Zhang et al., 2020). There are studies in the marketing context which established
a positive relationship between reputation and customer loyalty (retention) (Farrington

et al., 2017; Hennig-Thurau et al., 2002; Taj, 2016). These studies confirmed that a customer
forms his/her positive or negative perception about a firm’s reputation and credibility based
on information available on various social platforms and websites (Jensen, 2002; Rivera
et al., 2016). CSR is one such credible activity and it is used as a strategic tool by various
firms to gain a competitive edge (Kucukusta et al., 2013). In the hospitality context, a large
number of studies confirmed that CSR programs related to hotel operations, community
services, service management, etc., enhance a hotel’s brand image (Bohdanowicz &
Zientara, 2009; Farmaki, 2019; Rhou & Singal, 2020; Sharma & Mishra, 2018). The reputa
tion of a hotel is based on its activities, services, etc., which are highly recognized and
tangible in nature (Homans, 1961). This is very crucial because customers make their hotel
bookings after reading several online and existing reviews about the reputation and quality
of a hotel (Gupta, 2017). CSR helps in creating a better association between the firm and its
customers (Famiyeh et al., 2016). Customers value hotels whose CSR efforts are widely
accepted, appreciated, and are outcome based. Moreover, CSR activities that meet stake
holder (customers) expectations by assuring high-quality services are often supported by
customers and lead to a high reputation (De Freitas Netto et al., 2020). There are similar
studies which stated that since CSR helps in improving firm’s reputation, it further drives
customer’s reaction and translates into retention (De Freitas Netto et al., 2020; Rahimi &
Kozak, 2017; Servera-Francés & Piqueras-Tomás, 2019). Hence, this study proposes:
H2: Company reputation mediates the relationship between CSR efforts and customer’s
retention.
Consumer satisfaction is another variable that is widely used by researchers in the market
ing context and has proved to be a predominant source of influence on consumer’s attitude
and loyalty (Antón et al., 2007). Customer’s satisfaction is defined as, ‘the degree to which
an organization meets customer’s expectations of the product or services, which is critical to
receive their support” (Luo & Bhattacharya, 2006). A large number of studies confirmed the
positive effect of satisfaction on loyalty (retention) and found satisfaction as one of the main
determinants of retaining customers (Luo & Bhattacharya, 2006; Rahimi & Kozak, 2017;
Saeidi et al., 2015; Theodoulidis et al., 2017; Wang, 2020; Wolter et al., 2017). Satisfaction is
both cognitive and relative in nature, which measures both emotional and rational aspects
of a product or service to influence consumer’s loyalty and experience (F. Ali et al., 2016;
Cetin & Walls, 2016; Jayasundara et al., 2009). There are a number of studies where
satisfaction is used as a mediator between customer’s experience with a product or service
and loyalty (retention), using hierarchical behavior model (Antón et al., 2007; He & Li,
2011; Saeidi et al., 2015; Wang, 2020). The findings of these studies confirmed that a firm’s
service attributes affect customer’s retention indirectly through satisfaction (Rhou & Singal,
2020; Wang, 2020). In relation to CSR, customer’s satisfaction is positively influenced by
CSR practices (Gao & Mattila, 2014). To be specific, firms that focus on improving the
quality of a product or service as a social practice, increase customer’s satisfaction (Berezina
et al., 2016; Rivera et al., 2016). For the hospitality sector, hotels offering high service quality,
smooth operations, focusing on green practices, etc., enhance their reputation, followed by
customer satisfaction (Cheon & Cheon, 2016; Kim & Kim, 2017; Zhao et al., 2016). A large
number of hospitality researchers confirmed that customer satisfaction is very crucial for
a hotel’s survival and leads to financial benefits in the long run, including revisit intention,
attracting new customers, positive reviews (Rhou & Singal, 2020; Saeidi et al., 2015). In
hospitality, satisfaction is generally recognized as a determinant to improve customer
association with the hotel, i.e. enhancing revisit intention, purchasing premium services,
posting positive reviews etc. (Berezina et al., 2016; Rhou & Singal, 2020). Customer-oriented
hotels focus more on customer-focused services in CSR, which leads to high satisfaction and
loyalty (retention) (Alamgir & Nasir Uddin, 2017).
H3: Customer’s satisfaction mediates the relationship between CSR efforts and customer
retention.
In addition, there are some significant studies (Saeidi et al., 2015; Wang, 2020) that found
that company reputation and customer satisfaction are strongly related. Company reputa
tion influences customer’s behavior including satisfaction, which leads to high retention
(Ghaderi et al., 2019). There are several studies where the tripartite relationship between
reputation, satisfaction, and retention is established (Marin et al., 2018; Wolter et al., 2017).
Reputed hotels offer the best services to customers, which leads to high satisfaction and
enables those hotels to attract or retain more customers (Saeidi et al., 2015). Therefore, in
light of the previous discussion, the study proposes.
H4: Customer’s satisfaction mediates the relationship between company reputation and
customer retention.
Moderating role of customer-company identification (C-C identification)

Based on social identity theory, an individual develops an emotional relationship with the
organization by creating self-identity along with the organization’s identity, and leads to
favorable behavior (García de Leaniz & Rodríguez Del Bosque Rodríguez, 2015).
C-C identification states that customers value an organization’s social practices when they
find those practices aligned with their self-identity (Gupta, 2017; Marin et al., 2018, 2009).
Customers create their identity based on the organization’s plans, mission, initiatives, that
were found unique and exclusive in the organization and were continued in the long term
(Liu et al., 2010). A large number of studies used C-C identification as a successful mediator
in the relationship between a company’s actions and related outcomes (satisfaction, reten
tion, actual usage, etc.) in the context of marketing (Bhattacharya & Sen, 2003; Davvetas &
Diamantopoulos, 2017), services (Brown et al., 2005; Marín & de Maya, 2013; Wolter &
Cronin Jr, 2017), hospitality sector (Martínez & Del Bosque, 2013; Yang et al., 2017). In the
hospitality context, these works majorly suggested the positive influence of
C-C identification in enhancing customer’s positive reaction (loyalty, retention) (He & Li,
2011; Rhou & Singal, 2020; Su et al., 2017). However, very limited studies discussed the
moderating role of C-C identification in particular (Davvetas & Diamantopoulos, 2017; Liu
et al., 2010), that too in the context of CSR practices (Bhattacharya & Sen, 2003; Liu et al.,
2010). Moreover, employee-company identification has been used mostly in this perspective
(Bohdanowicz & Zientara, 2009; Gupta, 2017). The moderating role of C-C identification
was found in CSR studies, for example between company reputation and engagement (I. Ali
et al., 2019), and between company CSR information and customer’s attitude change (Liu
et al., 2010). It is found that customers with a high level of identification feel greater
commitment toward the organization where CSR exists, and exhibit high retention behavior
(Liu et al., 2010). This means that customers would rarely switch their CSR-orientated
organization even if they find an increase in price or unavailability of a few services. On the
other hand, customers with low C-C identification would have low commitment level and
would change their perception toward the organization after listening to negative reviews or
receiving adverse unsatisfactory services from the organization, even if they perceived it
highly reputed (Marín & de Maya, 2013; Su et al., 2017). Given the evidence that
C-C identification moderates the relationship between reputation and customer’s behavior
(loyalty/retention), the present study also proposes:
H5: Customer company identification will act as a moderator between company reputa
tion and customer retention.
Assuming that C-C identification moderates the relationship between company reputation and
customer retention, it is also possible that C-C identification will conditionally influence the
relationship between CSR practices and their customer-related outcomes (retention). This
depicts the moderated mediation pattern between the study variables as shown in Figure 1.
Thus, customers with high C-C identification are likely to perceive CSR practices very essential
and adding to company reputation, followed by high customer retention (Karazsia & Berlin,
2018; Liu et al., 2010). On the contrary, a customer with low C-C identification will be doubtful
about CSR practices, their influence on firm’s reputation, and this will result in low customer
retention. Hence, the study proposes the following hypothesis:
H6: The indirect effect of CSR on customer retention via company reputation is condi
tional upon customer-company identification. The indirect effect is stronger for customers
who report high levels of company identification.
Methodology
Sample and data collection
The present study used the convenience sampling method. Data were collected from star
luxury hotels situated in north India. These hotels were selected based on their ratings (3 or
more ratings). More than 20 luxury hotels were approached by the authors, out of which
seven hotels kindly agreed for the survey on their customers on the condition of privacy.
Respondents were existing customers of these hotels (See Table 2) and have been
approached for the survey with the help of hotel staff. Preliminary questions were included
in the survey forms asking their current association, recent stay, and tenure of stay in the
hotel. A respondent who was not an existing customer of the hotel was left out in the final
survey. Authors believe that different respondents may have different opinions about the
survey scales, which may affect data validity. Therefore, pilot testing was conducted on 80
existing customers. Reliability and content validity of the scales were checked to indicate the
appropriateness of the scales and measure errors. After pilot testing, the proposed scales
were finalized and survey forms were distributed personally or emailed to 700 customers in
a span of around 4 months in 2019. Respondents were briefed about the purpose of the
Table 2. Demographic details.

Variable Frequency Percentage (%)
Gender
Male 221 57.6
Female 163 42.4
Marital Status
Married 173 45.1
Single/others 211 54.9
Age
21–30 years 49 12.8
31–40 years 143 37.3
41–50 years 100 26.1
More than 50 years 92 23.8
Education
Graduate 165 43
Post graduate 200 51.8
Others 19 5.2
For how many years have you been visiting this company?
1–5 years 139 36.2
6–10 years 212 55.2
11–15 years 22 5.7
16–20 years 7 1.8
More than 20 years 4 1.0
study. They were explained about the need of the study, duration of the study, and were
assured about the security of their personal data given in the survey process. Total of 410
questionnaires were received back from the survey, 26 were discarded due to incomplete
information. Data of 384 respondents were finally taken for analysis. The method used to
test the hypotheses was quantitative, using the survey to gauge customers’ perception about
their respective hotels. Table 2 depicts the demographic details of the customers.
Measures
All the scale items of the study were measured on a 5-point rating scale with 5 as strongly
agree and 1 as strongly disagree. CSR was measured on four items borrowed from Fatma
et al. (2018). Company reputation was measured on a 5-item scale developed by Saeidi et al.
(2015). The 3-item scale developed by Wolter and Cronin (2016) and Fatma et al. (2018)
was used to measure customer-company identification. The 3-item scale of Fatma et al.
(2018) was used to measure customer retention. In order to measure customer satisfaction,
the 4-scale items from Saeidi et al. (2015) were used.
Reliability and validity analysis

The data were analyzed using SPSS, Macro PROCESS, and AMOS. The internal consistency of
the items was calculated through Cronbach’s alpha coefficient. CFA was conducted to test the
model fit. Apart from these, convergent validity, discriminant validity, and composite reliability
were tested for the study. SEM and Moderation mediation techniques were used for testing the
hypotheses. Table 3 shows the result of CFA. The χ2 value of 2.73 is lower than the threshold of
3, as per the recommendation by Hair et al. (2011). It can further be noticed that all the values
pertaining to GFI, AGFI, NFI, and CFI are greater than the prescribed value of 0.9 (Byrne,
1998), while the value of RMSEA is lower than the threshold of 0.08 (Hair et al., 2011).
Table 3. Fit indices of the structural model.

Fit Indices Value in the model
2 2.73
x =df
GFI .935
AGFI .897
NFI .906
CFI .912
RMSEA .065
In order to verify the SEM assumptions, researchers conducted a multivariate normality

test which found that the absolute values of skewness and kurtosis were less than 2.0 and 3.0,
thus establishing that the data were normally distributed (Kline, 1998).
The researchers followed the suggestions of Podsakoff et al. (2003), randomly arranging
the items, reverse coding of items as well as concealing the purpose and relationship
between constructs, in order to minimize the CMB. Secondly, researchers also conducted
Harman’s (1967) single-factor method to deal with the problem of common method
variance. The first factor explained 31.7% variance, which is below the threshold of 50%;
hence, common method variance was ruled out (Chang et al., 2010).
Table 4 lists the values of the measurement model. It can be observed that the values of
Cronbach’s alpha are above 0.7, hence considered as adequate (Hair et al., 2011). AVE value
of each construct is higher than 0.5 and CR values of all variables are higher than the
threshold of 0.7 (Fornell & Larcker, 1981), thus confirming convergent validity.
Table 5 reflects the values of discriminant validity of the scales which was verified using
Sweeney and Sweeney and Soutar (2001) criteria that correlations between constructs
should be significantly below 1, which was satisfied as shown by the correlation values.
Secondly, as the AVE value of every single construct was found to be greater than the
squared correlation coefficient between the constructs, discriminant validity has also been
achieved (Hair et al., 2011).
GFI – Goodness of fit index; NFI – normed fit index; CFI – comparative goodness of fit;
RMSEA – root-mean-square error of approximation.
Result analysis
The study adopted Macro PROCESS Hayes (2017) Model 4, to run mediational analysis to see
whether the indirect effect (a*b) was significantly different from zero. The indirect effect was
tested using a percentile bootstrap estimation approach with 10000 samples (Hair et al., 2011),
implemented with the PROCESS macro Version 3 (Hayes, 2017). As shown in Table 7, the
indirect effect of CSR on retention through CCI was statistically significant (.239; p = .000),
the 95% C.I. is [0.190, 0.290]. Similarly, the indirect effect of CSR on retention through
reputation was also statistically significant (.064; p = .000), the 95% C.I. is [.025,.108]. The
indirect effect of CSR on retention through satisfaction was statistically significant (.035;
p = .000), the 95% C.I. is [0.007, 0.068]. Lastly, the indirect effect of reputation on retention
through satisfaction was also statistically significant (.035; p = .000), the 95% C.I. is [.015,
0.062]. However, based on the results supported in Table 6, we can see that Hypotheses 1–4
were partially supported. The reason for partial support was due to the significant direct effect
of the predictor variable (CSR) on the criterion variable (retention), as observed in Table 6.
Figure 2 explains the hypothesized results.
14
Table 4. Analysis of measurement model.

Descriptive
statistics Cronbach
Measurement item
Research constructs Items statements Mean SD Inter-item α value CR AVE loadings
Company Reputation (CR) CR1 Customers’ comprehensive sense of total experience in the hotel is 4.14 .64 .74 0.87** 0.90 0.80 0.89
S. SRIVASTAVA AND N. SINGH
excellent.
CR2 Customers are optimistic about long-term future of this hotel. .80 0.88
CR3 The hotel is characterized with honesty. .52 0.87
CR4 The hotel is characterized with credibility. .76 0.74
CR5 The hotel is characterized with dependability. .64 0.66
Satisfaction (SAT) SAT1 I am satisfied with the services provided. 3.96 .74 .42 0.84** 0.82 0.73 0.76
SAT2 This hotel is good to do business with. .35 0.75
SAT3 Services of this hotel meet my expectations. .44 0.74
SAT4 Overall, I am satisfied with the services provided by this hotel. .66 0.70
Customer-Company CCI1 This hotel represents who I am. 4 .48 .72 0.71** 0.83 0.79 0.92
Identification (CCI) CCI2 This hotel is part of my sense of who I am. .66 0.68
CCI3 This hotel helps me express my identity and I feel personally connected .64 0.77
to this hotel.
Customer Retention (CR) CR1 If I needed services now, this would be my first choice. 3.12 .76 .66 0.91** 0.91 0.88 0.88
CR2 I will continue to associate with this hotel. .74 0.91
CR3 I would encourage friends and relatives to get associated with this hotel. .72 0.87
CSR CSR1 This hotel supports good causes. 3.88 .68 .68 0.81** 0.84 0.75 0.84
CSR2 This hotel sponsors worthy social activities. .78 0.86
CSR3 The hotel is doing a lot of things for the welfare of society and .74 0.66
community.
CSR4 This hotel provides ethical and quality services. .70 0.65
Author’s survey. Notes = 384, *p <.05; **p <.01
Table 5. Fornell-Larcker criterion: Mean, Standard Deviation (SD), Correlations, and discriminant validity.
S. no. Construct 1 2 3 4 5 6 7 8 9 10 11
1 Age 1
2 Gender .05 1
3 Tenure .18** .01 1
4 Marital Status −.31 .04 −.25** 1
5 Company Reputation −.00 −.11 −.01 .11 .89
6 Customer Satisfaction .15* .09 .14* −.13* .25** .85
7 Customer-Company −.03 .01 −.05 −.12* .32** .31** .88
Identification
8 CSR −.00 −.01 −.02 −.05 .50** .37** .44** .86
9 Customer Retention −.01 .05 .02 −.14* .40** .31** .49** .60** .93
10 Mean 1.76 1.42 1.77 1.55 15.80 10.66 6.89 10.92 6.80 -
11 SD .88 .49 .67 .50 4.02 2.86 2.55 2.71 2.57 -
Author’s survey. Note: N = 384; **correlation significant at.01 level; **correlation significant at.05 level values of discriminant
validity (square root of AVE) is represented diagonally.
Table 6. Estimated coefficients for the structural model and its confidence intervals of Company
Social Responsibility (CSR), Company Reputation (CR), Customer Satisfaction (CS), Customer
Retention (CRR), and C-C Identification.
Variables Estimate SE t p LL 95 CI UL 95 CI
CSR CS .38 .05 7.68 .000 .2878 .4856
CSR CR .53 .04 12.76 .000 .4500 .6138
CS CRR .09 .04 2.30 .000 .0134 .1685
CR CRR .08 .03 2.87 .004 .0273 .1460
CSR CCI .59 .05 10.96 .000 .4876 .7006
CR CCI .12 .05 6.25 .000 .5126 .7254
Author’s survey
Table 7. Mediation analysis.

Mediation paths Mediation Indirect Effect LLCI ULCI p value
H1 CSR Satisfaction Retention Partial .035 .007 .068 .000
H2 CSR Reputation Retention Partial .064 .025 .108 .000
H3 CSR CCI Retention Partial .239 .190 .290 .000
H4 Reputation Satisfaction Retention Partial .035 .015 .062 .000
Table 8 of the study explains the role of C-C identification as a moderator between company
reputation and customer retention. In step 1, the control variables were entered and Adj R2 was
found to be .02. In step 2, company reputation was entered and Adj R2 value was found to be
.15, but in step 3, when the moderating variable C-C identification was entered, Adj R2
increased to .64, and the interaction between C-C identification and company reputation
changed Adj R2 to .67. The results thereby prove hypothesis H5 of the study that
C-C identification acts as a significant moderator between company reputation and customer
retention relationship. Figure 3 explains the interaction graph about the relationship.
In order to test the H6 of the study that the indirect effect of CSR on customer retention via
company reputation is conditional upon customer-company identification, Model 14 of Hayes
(2017) PROCESS Macro was used to study the moderated mediation effect. The condition of
moderated mediation is achieved when the conditional indirect effect of CSR on customer
retention through company reputation differs in C-C Identification. The researchers operatio
nalized high and low levels of C-C-Identification as one SD above and below its mean score. As
observed in Table 9, the indirect effect of CSR on customer retention was strongest at the
Figure 2. Hypothesized results.
Table 8. Regression result for the moderating role of customer-company identifica

tion in the relationship between company reputation and customer retention.
Independent Variable Dependent Variable
Variables and Steps B Adj R2
Step 1: Controls .02
Age −.02
Gender .10
Tenure .13*
Marital Status −.04
Step 2: Main effects of Predictor variable
Company Reputation .15** .15
Step 3. Moderating Variables
Customer Company Identification .73** .64
Step 4: Interaction
Company Reputation * Company Identification .06** .67
Notes = 384, *p < .05; **p < .01
Author’s survey
highest level (+1 SD) of C-C Identification and weakest at the lowest level (−1 SD) of
C-C Identification. The findings suggest that CSR is linked to greater company reputation,
which contributes to customer retention among those who report a high level of
C-C Identification, thereby proving H6 that states that the indirect effect of CSR on customer
retention via company reputation is conditional on C-C Identification. The indirect effect is
stronger for customers who report high levels of C-C Identification.
Discussion and implications

Theoretical discussion
How are CSR practices related with customer’s retention in the hospitality industry? The
present study suggests the answer to this question in two ways: first, CSR practices influence
4.5
Low Customer Company
4 Identification
Customer Retention
High Customer Company

Identification
3.5
2.5
1.5
1
Low Company Reputation High Company Reputation
Figure 3. Moderating role of customer-company identification, company reputation, and customer

retention relationship.
Table 9. Moderated Mediation Result for CSR across levels of Company

Identification.
Values of Moderator Conditional Indirect Effect SE Lower CI Upper CI
Company Identification
−1 SD 0.03 0.014 0.061 0.002
M 0.05 0.018 0.029 0.092
+1 SD 0.14 0.031 0.084 0.207
Number of bootstrap samples = 5,000; level of confidence = 95%, SE = Standard Error,
Criterion Variable: Customer Retention; CI = Confidence Interval; Predictor variable =
CSR; Mediator = Customer Reputation; Moderator = Company Identification
customer’s retention partially through the mediating impact of customer-company identi

fication (C-C identification), company reputation, and customer’s satisfaction. Second, the
mediating impact of company reputation on customer’s retention is dependent on the level
of C-C identification. The study used a moderated mediation approach, using Hayes model
14 in the SPSS process, to analyze the above-mentioned relationships. The study analyzed
a sample of customers of luxury hotels with more than or equal to a three-star rating.
Large extensive academic work is available on the direct influence of CSR practices on
customer’s reactions and behavior, in the context of the hospitality industry (Famiyeh et al.,
2016; Gao & Mattila, 2014; González-Rodríguez et al., 2019; Theodoulidis et al., 2017;
Tuškej et al., 2013). These studies largely discussed the importance of CSR in the hospitality
sector and the crucial role it plays in improving a firm’s image and meeting stakeholder’s
expectations (Famiyeh et al., 2016; Rahimi & Kozak, 2017). Some studies found a positive
association (Alamgir & Nasir Uddin, 2017; Ghaderi et al., 2019; Jamali) but others found
a negative or no relationship between the variables (Kang et al., 2010; Saeidi et al., 2015;
Wang, 2020). There has been much debate about whether CSR practices have direct (Liu
et al., 2010; Marin et al., 2009) or indirect effect (Saeidi et al., 2015; Yang et al., 2017) on
stakeholder’s perception, including employees, community, customers, investors, etc.
(Rhou & Singal, 2020). The present work is aligned with the analysis which indicates the
indirect impact of CSR on stakeholders and the firm’s value (Antón et al., 2007; Saeidi et al.,
2015; Yang et al., 2017). Luo and Bhattacharya (2006) used customer satisfaction as
a mediator between CSR and market value. In later years, various authors have extended
their work by including company reputation, competitive advantages, corporate ability,
C-C identification, etc., as mediators to measure the indirect effect of CSR (Alamgir & Nasir
Uddin, 2017; Antón et al., 2007; Fatma et al., 2018; Hur et al., 2020; Servera-Francés &
Piqueras-Tomás, 2019). However, most of these studies discussed the indirect relationship
between CSR and a firm’s performance. Very limited work is available where the effect of
CSR on customer’s reactions (retention) is assessed (Cheon & Cheon, 2016; Farrington
et al., 2017; Hur et al., 2020). The present study explores this gap and used company
reputation, customer’s satisfaction, and C-C identification, as consequences of customer’s
retention after practicing CSR.
Although CSR positively influences customer’s perception about the firm, several studies
confirmed that proper communication of CSR practices is important to derive stakeholder-
related benefits and outcomes (retention, loyalty, intention) (Zhang et al., 2020). Not all CSR
practices are equally influential and important to customers (De Freitas Netto et al., 2020), but
when CSR activities enhance a firm’s reputation, match with customer’s self-values and meet
stakeholder’s expectations, CSR increases loyalty among customers (Kim & Kim, 2017; Rhou
& Singal, 2020). In the context of hotels, stakeholder focused CSR practices such as green
initiatives programs, high service quality, ethical products/services, community development,
etc., are found to have a strong positive impact on hotel’s reputation (Theodoulidis et al.,
2017), C-C identification (Hur et al., 2020) and customer’s satisfaction (Cheng et al., 2019;
Jayasundara et al., 2009). Several studies confirmed that reputation plays a major role in
attracting new customers or retaining existing customers (Lai et al., 2015; Luu, 2017; Mir &
Shah, 2018; Su et al., 2017). Customers seek opinion from social platforms, websites, etc.,
about the reputation of the hotel before making a hotel booking (Jayasundara et al., 2009).
There are hospitality studies that confirmed the effect of CSR on customer’s loyalty (retention)
through company reputation (Farmaki, 2019; González-Rodríguez et al., 2019; Rhou & Singal,
2020; Theodoulidis et al., 2017). Findings demonstrated that high reputation is the driver of
high customer loyalty (retention) after engaging in CSR (Saeidi et al., 2015).
Customer’s satisfaction is extensively used as a mediator and linked with CSR in several
studies (Cheon & Cheon, 2016; Luo & Bhattacharya, 2006; Rivera et al., 2016). In the context of
hospitality, it is confirmed that hotels engaged in CSR programs provide several intangible
benefits to customers including customer’s satisfaction, and thus leading to high customer
retention (Kang et al., 2010; Yang et al., 2017). According to social exchange theory, customers
provide support to the organization (satisfaction and trust) in exchange of social (CSR) or
economic (profitability) benefits received from the organization (Famiyeh et al., 2016). In
a similar study by Saeidi et al. (2015) it is suggested that the relationship between CSR and
stakeholder’s value are fully mediated through satisfaction.
However, these studies discussed a few intangible benefits such as satisfaction, reputation,
corporate ability, etc., and ignored C-C identification which is closely associated with CSR
practices (García de Leaniz & Rodríguez Del Bosque Rodríguez, 2015; Wang, 2020). There are
a large number of studies where C-C identification is used as a mediator to measure customer’s
loyalty (Marín & de Maya, 2013; Tuškej et al., 2013; Wang, 2020; Yang et al., 2017), but largely in
the context of service marketing (Fatma & Rahman, 2016; Sharma & Mishra, 2018). There are
some significant hospitality studies which confirmed that CSR positively impacts C-C identifica
tion because it is used to develop a sense of identification and belongingness among consumers
toward the hotel (Martínez & Del Bosque, 2013; Rather, 2018; Su et al., 2017; Theodoulidis et al.,
2017). For this reason, when engaged in CSR, hotels reflect their sensitivity toward social needs,
and that is used by customers to develop a connection with the company (González-Rodríguez
et al., 2019). Moreover, customers are more likely to get associated with hotels with a high level of
CSR to denote their social image and satisfy their self-esteem (Martínez & Del Bosque, 2013).
This positively enhances customer loyalty and revisit intention to the hotel (Cheng et al., 2019;
Rather, 2018; Yang et al., 2017), which is supported in the present work.
Theoretical implications
The present study has attempted to make some important contribution to the literature of
CSR and customer retention in the hospitality sector. A large number of previous studies
have discussed the role and impact of CSR in the hospitality context (Dewnarain et al., 2019;
Martínez & Del Bosque, 2013; Su et al., 2017; Tuškej et al., 2013; Wang, 2020; Yang et al.,
2017). From the theoretical perspective, the research contributes to existing literature on
stakeholder’s approach to CSR. In addition, the present study effectively integrates stake
holder theory with three distinct theories, namely, social identity theory, social exchange
theory, and signaling theory, to measure the association between CSR practices and
customer retention in hotels. These theories are widely discussed in consumer behavior
and marketing contexts. Moreover, the role of social identity and social exchange theory is
assessed for CSR (Abdullah et al., 2017) and for the hospitality sector (Farmaki, 2019;
Rather, 2018; Su et al., 2017), but majorly in the context of formal employees and share
holders, while assessing the impact on financial performance (Rhou & Singal, 2020; Saeidi
et al., 2015). Based on our understanding, no known studies have engaged researchers’
attention where the combined use of these theories was done in assessing the impact of CSR
practices in the hospitality sector. Moreover, for the customer, high use of theories is seen,
such as the theory of planned behavior, expectation-confirmation model, signaling theory,
the theory of reasoned action (Rhou & Singal, 2020). The present study understands this gap
and explains the applicability of social identity theory and social exchange theory on
customers under the stakeholder approach of CSR.
Another contribution of the study is that it explains the moderating effect of C-C identifica
tion on customer’s retention via a firm’s reputation when engaged in CSR. The study validates
the findings of existing literature which supports not only a direct but the mediating relationship
between CSR and customer’s loyalty (retention) for the hospitality sector (Gupta, 2017; Wang,
2020). In recent times, social identification theory has grabbed a lot of attention to customer
retention (Bhattacharya & Sen, 2003; He & Li, 2011). Although studies done in the past have
limited their research on the mediating effect of C-C identification on customer retention
(Bhattacharya & Sen, 2003; Lee, 2008), very few had tried to explore its moderating effect (I.
Ali et al., 2019; Davvetas & Diamantopoulos, 2017). These studies confirmed that different levels
of C-C identification may influence customer’s perception toward a firm’s actions and reputa
tions (Liu et al., 2010). This states that the effect of CSR on customer’s retention is positive for
hotels with reputation values (González-Rodríguez et al., 2019; Kim & Kim, 2017) and a high
level of C-C identification (Zhang et al., 2020). Existing hospitality researches largely limited their
findings to the direct association between CSR and customer retention, which ignored the impact
of some influential factors such as C-C identification, company reputation, and customer’s
satisfaction, in the process to enhance applicability (Hur et al., 2020; Jang et al., 2017). The
present work adds to the growing body of research on the identity-defining and benefit-
exchanging nature of a company’s CSR initiatives (Rhou & Singal, 2020). Furthermore, the
present study can be considered comprehensive in terms of explaining all the direct and indirect
linkages among the aforementioned variables with the help of MACRO PROCESS. PROCESS is
used effectively to determine single or multiple mediation or moderation models, more than one
interaction, several conditional indirect effects, in various social and human science studies.4
Managerial implications
India’s hospitality sector is witnessing rapid growth in the last few years; a number of new
hotels have come up and the use of technology has advanced in recent years, resulting in
stiff competition in the sector. Firm’s management and marketing managers need to create
a competitive edge and build a high reputation of their hotels to gain attention among
customers. The present study is relevant in this context as it portrays CSR as a strategic
marketing tool that will attract customers who share the same values. The study confirms its
validity and applicability by suggesting to hotels why they should pay attention to CSR
practices to improve customer retention.
The present study suggests the strong mediating effect of a hotel’s reputation on customer’s
retention when engaging in CSR. Marketers who design CSR programs for hotels need to
consider CSR as a reputation tool and try to link it with company image. Effective reporting and
promotion of CSR activities give a positive signal to customers. Customers value hotels which
are highly recognized and praised for their CSR efforts in society, and this leads to high
retention. The study suggests that hotels must select specific CSR objectives, communicate
these objectives to customers and use it in the reputation building process. A large number of
hotels are using reputation management tools to track the impact of various new plans or
activities on their image or reputation, which may be used for customer relationship manage
ment. Customer satisfaction is another crucial variable in the present study. The study confirms
the strong mediating effect of customer’s satisfaction between CSR and retention. The findings
suggest that hotels need to focus on CSR initiatives that enhance both rational and emotional
aspects of customer satisfaction. This states that when a hotel’s services match with customer’s
expectations and promise to offer long-term mutual benefits (monetary and nonmonetary), it
results into high customer satisfaction (He & Li, 2011). Customer-focused CSR practices
including high service quality, better hotel operations, community development, etc., are
favored by customers and they show support by revisiting the hotel (Wolter et al., 2017; Yang
et al., 2017). Therefore, hotels and their marketing practitioners should assess the influence of
customer satisfaction on retention. The marketing program of hotels must focus on the
attributes of customer satisfaction related to hotel services.
Based on the results of mediating and moderating effect of C-C identification, the study
suggests the high importance of social identity theory to leverage the impact of CSR on
customers. Hotels need to create and design CSR strategies with the aim of promoting social
identity among customers. For example, the “P&G Shiksha” CSR program of Procter and
Gamble creates a social identity for their consumers as a joint CSR program, and collects
contributions from consumers toward girls’ education.5 The marketing team of hotels needs to
focus on creating social or self-identities for consumers while designing CSR programs. A high
level of self-identity enhances the commitment and favorable attitude of customers toward the
hotel’s activities (Rather, 2018).
Limitations and direction for future research

Although all the hypotheses are proven, yet there are certain limitations to the study. For
instance, the study has considered only the hospitality industry; hence, the findings cannot
be generalized. A comparative study between other industries could have given a better
understanding of the results. Hence, this aspect should be looked into in the future research.
In addition, data are collected from high rating hotels (3 or more-star rating); hence, it only
includes the perception of upscale hotels and their customers. Future studies may test the
model in other categories of the hospitality sector including restaurants, casinos, budget
hotels, etc. The study has collected data only from one part of the region; data collected from
south, west, and eastern parts of India could have afforded a better understanding of the
variables. Future research could also do a comparative study between public and private
sector organizations with respect to CSR initiatives. Finally, beyond company reputation
and customer-company identification, future research can incorporate other antecedents or
factors influencing customer retention (e.g. identity similarity and corporate innovative
ness). Moreover, to refine the results of C-C identification, both as a mediator and
moderator, a longitudinal study may be conducted to measure the change in the level of
C-C identification over a time period. Finally, the moderating effect of C-C identification is
measured between company reputation and retention only and found very significant.
Future studies may further explore on the moderating effect of C-C identification between
CSR and satisfaction, and between reputation and satisfaction.
Notes
1. https://www.thehindu.com/opinion/open-page/the-guest-as-god-no-less/article26830512.ece
2. https://www.entrepreneur.com/article/324089
3. https://www.itchotels.in/content/dam/projects/hotelswebsite/itc-hotels/luxurycollection/
Environment/ITC_GREEN.pdfhttps://www.ihcltata.com/responsibility/,http://leelaworldwide.
com/csr.html#accordion16,https://www.thelalit.com/management/,https://www.ibef.org/down
load/Tourism-and-Hospitality-October-2019.pdf, https://www.moneycontrol.com/, https://www.
trivago.in/, https://www.makemytrip.com/
4. https://processmacro.org/index.html
5. https://www.amchamindia.com/us-companies-partners-in-indias-inclusive-growth/pg-india/
ORCID
Shalini Srivastava http://orcid.org/0000-0002-5027-2851
Nidhi Singh http://orcid.org/0000-0003-3181-4077
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Do Corporate Social Responsibility (CSR) Initiatives Boost Customer Retention in The Hotel Industry? A Moderation-Mediation Approach

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Do Corporate Social Responsibility (CSR) initiatives

Shalini Srivastava & Nidhi Singh

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Do Corporate Social Responsibility (CSR) initiatives boost

Table 1. Overview of the top five hotel companies in India.

Conceptual framework and hypotheses development

Mediating effect of C-C-identification, company reputation and customer satisfaction

Figure 1. Conceptual framework.

a positive relationship between reputation and customer loyalty (retention) (Farrington

Moderating role of customer-company identification (C-C identification)

Table 2. Demographic details.

Reliability and validity analysis

Table 3. Fit indices of the structural model.

In order to verify the SEM assumptions, researchers conducted a multivariate normality

Table 4. Analysis of measurement model.

Table 7. Mediation analysis.

Figure 2. Hypothesized results.

Table 8. Regression result for the moderating role of customer-company identifica­

Discussion and implications

High Customer Company

Figure 3. Moderating role of customer-company identification, company reputation, and customer

Table 9. Moderated Mediation Result for CSR across levels of Company

customer’s retention partially through the mediating impact of customer-company identi­

Limitations and direction for future research

Journal of Business and Development Studies, 9(1), 91–111.https://doi.org/10.22111/IJBDS.2017.

Gupta, M. (2017). Corporate social responsibility, employee–company identification, and organiza­

Raj, A. (2016). Managerial perception of the impact of corporate social responsibility on

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Table 8. Regression result for the moderating role of customer-company identifica

customer’s retention partially through the mediating impact of customer-company identi

Gupta, M. (2017). Corporate social responsibility, employee–company identification, and organiza