Exploring corporate citizenship and purchase intention: mediating effects of brand trust and corporate identification

• Author: Yuan Hui Tsai,Chieh‐Peng Lin,Chou‐Kang Chiu,Kuei‐Tzu Shen,Sheng‐Wuu Joe
• Date: 01 October 2015
• DOI: http://doi.org/10.1111/beer.12073
• Published date: 01 October 2015

Exploring corporate citizenship

and purchase intention:

mediating effects of brand trust

and corporate identification

Yuan Hui Tsai1, Sheng-Wuu Joe2,

Chieh-Peng Lin3, Chou-Kang Chiu*,4 and

Kuei-Tzu Shen3

1. Department of Finance, Chihlee Institute of Technology, New Taipei City, Taiwan

2. Department of Business Administration, Vanung University, Chung-Li City, Taiwan

3. Institute of Business & Management, National Chiao Tung University, Taipei, Taiwan

4. Master Program of Business Administration, National Taichung University of Education, Taichung City, Taiwan

Corporate citizenship represents various organizational activities and status related to the organization’s

societal and stakeholder obligations. This study develops five different dimensions of corporate citizenship and

examines the relationship between the five dimensions and purchase intention by including two key mediators.

In the proposed model of this study, purchase intention is indirectly affected by economic, legal, ethical,

general philanthropic, and strategic philanthropic citizenship via the mediation of corporate identification and

brand trust. Empirical testing using a survey of 353 consumers from various industries confirms most of our

hypothesized effects. Last, managerial implications for corporate leaders and limitations of our findings are

discussed in depth.

Introduction

A growing interest for corporate citizenship is appar-

ent in both practice and research, discussing how

business corporations integrate social demands into

their operations to lift consumers’ purchase inten-

tion. It is important to assess consumers’ purchase

intention from a perspective of corporate citizenship

because such citizenship contains most of the impor-

tant issues consumers always put emphasis on.

Corporate citizenship is defined as a company’s self-

regulated management of its business activities and

influences to advance a social agenda beyond that

required by law (Lin 2010; Lin et al. 2010). Although

corporate social responsibility (CSR), defined as a

firm’s obligation to respond to the externalities

created by market actions (Husted & Allen 2006), is

often regarded to have a similar meaning as that of

corporate citizenship (Valor 2005), they are different

in that corporate citizenship is a result of the inclu-

sion of CSR ideas into the global corporate strategy.

Following previous literature, this study focuses on

corporate citizenship that represents a descriptive

conceptualization of what does happen, rather than

a normative conceptualization of what should

happen (Matten & Crane 2005). Corporate citizen-

ship represents organizational activities and status

related to the organization’s societal and stakeholder

* Corresponding author

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Business Ethics: A European Review

Volume 24 Number 4 October 2015

© 2014 The Authors

Business Ethics: A European Review © 2014 John Wiley & Sons Ltd, 9600 Garsington Road,

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doi: 10.1111/beer.12073

361

(or consumer) obligations (Luo & Bhattacharya

2006).

A growing interest for corporate citizenship is

apparent in both practice and research, presenting

how business corporations incorporate social

demands into their operations, what benefits the cor-

porations may expect, and how the corporations

appropriately play the social role of business in a

long run (Maignan & Ferrell 2001; Matten & Crane

2005). Corporate citizenship entails a ‘negative

injunction’ to avoid potential harms (or social inju-

ries) and correct activities that might unexpectedly

injure others (Simon et al. 1983: p. 87). Corporate

citizenship is more than just raising customer value

from a marketing perspective, and such citizenship is

focused and obtained by many firms even if they

might not benefit from the citizenship (i.e. irrelevant

to customer value) (Lantos 2001). Examples of

selling or marketing benefits from corporate citizen-

ship for business organizations may result in the

ability to charge a premium price for a product, to

obtain a good business image, and to foster custom-

ers’ trust and identification (e.g. Maignan & Ferrell

2001; David et al. 2005; Carmeli et al. 2007; Vlachos

et al. 2009).

Corporate citizenship refers to the moral obliga-

tions that maximize the positive influence of the

organization on its social environment (e.g. environ-

mental protection, social charities, etc.) and mini-

mize the negative influence (Berens et al. 2005; de los

Salmones et al. 2005). Previous literature has indi-

cated that corporate citizenship perceived by con-

sumers is critical during the communication between

the customers and their product or service providers

(Sen & Bhattacharya 2001; Becker-Olsen et al. 2006).

When communicating with customers to boost their

purchase intention, business corporations apply dif-

ferent methods and strategies to present their

product or service by, for example, associating their

product or service with their particular corporate

citizenship image. This is understandable, because

customers’ different types of associations with a

company’s corporate citizenship often generate dif-

ferent influences on their evaluation (e.g. trust and

identification) (Sen & Bhattacharya 2001; Berens

et al. 2005, 2007), consequently influencing purchase

intention (e.g. Marin & Ruiz 2007; Vlachos et al.

2009). This study proposes and examines corporate

identification and brand trust as two key mediators

between corporate citizenship and purchase inten-

tion. In this study, brand trust refers to the willing-

ness of the consumers to rely on a brand in which

they have confidence toward the brand’s reliability,

honesty, and altruism (Wang 2002), whereas corpo-

rate identification of consumers is defined as the

extent to which the consumers use their relationship

with a service corporation to satisfy their important

self-definitional needs, such as identity similarity

(Bhattacharya et al. 1995; Grégoire & Fisher 2006).

Based on the preceding discussion, the research

objective of this study is to explore the salient influ-

ences that drive consumers’ purchase intention and

their mediating mechanisms. Although some studies

have proposed corporate trust as a key determinant

of consumers’ purchase intention (Sirdeshmukh

et al. 2002), this study complements previous studies

by examining brand trust that is actually more criti-

cal than corporate trust in affecting purchase inten-

tion for a particular product brand. Collectively,

brand trust and corporate identification are both

important for understanding consumers’ purchase

intention, because previous literature finds that com-

panies with favorable reputations benefit from build-

ing trust and identification among customers, which,

in turn, positively influence behavioral intentions

(Keh & Xie 2009).

According to a majority of previous studies, cor-

porate citizenship is considered to include four

dimensions: economic, legal, ethical, and philan-

thropic citizenship (Schwartz & Carroll 2003; Lin

2010; Lin et al. 2010, 2012a, 2012b). Unfortunately,

many academic studies have not sufficiently contrib-

uted to our understanding of how corporate citizen-

ship impacts consumers’ purchase intention from the

perspective of strategic corporate citizenship (e.g.

Lantos 2001; Husted & Allen 2007). Successful stra-

tegic management of corporate citizenship allows

business corporations to take into account legitimate

stakeholder claims, focusing and expanding work in

those areas where a business competitive advantage

can be created, while assigning an appropriate allo-

cation of resources to meet social needs (Husted &

Allen 2007). Another benefit of successful corporate

citizenship strategy is that it encourages business cor-

porations to seek effective ways in which social

action also leads to profit (Husted & Allen 2007). In

Business Ethics: A European Review

Volume 24 Number 4 October 2015

© 2014 The Authors

Business Ethics: A European Review © 2014 John Wiley & Sons Ltd

362