Retailers' CSR: the effects of legitimacy and social capital

Abstract

Purpose – This study aims to investigate consumer perception of community and employee oriented CSR program, and examine how retailers' CSR activities lead to social (i.e. legitimization) and financial support. Further, by taking the social context into account, this research examine the moderating effect of consumer engagement in community social capital on the relationship between perceived retailers' CSR action and retailer legitimization. Design/methodology/approach – Pre-test was conducted with 144 students to validate the measurement model. A total of 220 responses from US consumers were used for the main-test, and multiple group analysis in structural equation modeling (SEM) was employed in order to test the structural model. Findings – The result indicates that when retailers are perceived as adhering to social norms through their CSR actions, they gain legitimacy and support from the consumers within the community. Further, consumer social capital moderates the relationship between perceived CSR and retailer legitimacy. Practical implications – Findings of this research can provide retail marketers with practical implication in developing their CSR strategy catering to the community members. Understanding consumers with higher level of social capital investment will increase the capability and effectiveness of the retailers' CSR activities. Originality/value – This research offers theoretical contributions to the current research stream of CSR studies by testing the moderating effect of consumers' engagement in the social environment on consumers' legitimization and support toward retailers that perform CSR activities. This study also provides new perspective on assessing the outcome of retailers' CSR actions by focusing on both social and financial dimensions.