Abstract
Orientation: Given the growing importance of sound corporate social responsibility (CSR) and considerable corporate investment in such activities, it is essential to understand the perceived impact thereof on stakeholder behaviour.Research purpose: As young individuals are particularly passionate about social responsibility, the effect of their perception of corporate identity (corporate values and corporate expertise) and CSR practices (relational, moral and discretionary actions) on their investment intention was investigated within an emerging market context.Motivation for the study: Previous researchers mainly focused on the effects of CSR on consumers’ intention to purchase products. Limited research has been conducted to understand the effect of CSR on decisions made by other key stakeholders, including investors.Research approach/design and method: Based on the theory of planned behaviour, a consumer behaviour-based dual-process model was adapted and tested in the investment context. An electronic questionnaire was distributed to potential young investors in the country to determine the effect of their perceptions of the CSR practices of a well-known South African financial company (Nedbank) on their intention to invest. The 1 649 responses were assessed through partial least squares structural equation modelling.Main findings: The adapted model was deemed reliable and valid in the investment context. Discretionary and relational CSR practices had more predictive relevance towards the corporate values dimension than the corporate expertise dimension of corporate identity. Moral CSR practices predicted the perception of both dimensions, which, in turn, influenced investment intention.Practical/managerial implications: Focus should be placed on communicating moral CSR practices, as it had a stronger prediction value (than discretionary and relational CSR practices) towards potential investors’ perceptions of the corporate expertise and values dimension of corporate identity which, in turn, strongly predicted investment intention.Contribution/value-add: This study makes a methodological contribution, as a dual-process model accounting for corporate identity and a range of CSR practices, based on consumer behavioural constructs, was applied in the context of investment decision-making within an emerging market.
Highlights
According to Porter and Kramer (2006): [I]f corporations were to analyse their prospects for social responsibility using the same framework that guide their core business choices, they would discover that it can be much more than a cost, a constraint, or a charitable deed – it can be a source of opportunity, innovation, and competitive advantage. (p. 80)
The theory of planned behaviour was used to investigate the impact of corporate social responsibility (CSR) perception on investor intention in South Africa
David et al (2005) developed a dual-process model to investigate the effect of perception of tangible and intangible dimensions of corporate identity and CSR practices on purchasing intention
Summary
According to Porter and Kramer (2006): [I]f corporations were to analyse their prospects for social responsibility using the same framework that guide their core business choices, they would discover that it can be much more than a cost, a constraint, or a charitable deed – it can be a source of opportunity, innovation, and competitive advantage. (p. 80). The rational choice theory states that individuals are likely to calculate the costs and benefits of planned actions before they make a selection (Scott 2000) Based on this theory, researchers have shown that when individuals evaluate their behavioural intentions, for example by purchasing products from a company, their perceptions of the company’s identity are likely to influence their decision-making processes (David et al 2005). Prior authors have applied the theory of planned behaviour in the investment context, to assess socially responsible investment decisionmaking (Adam & Shuaki 2014; Alleyne & Broom 2011; East 1993) As such, this theory was selected to examine investment intention in South Africa based on CSR perceptions
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