Generating Global Brand Equity through Corporate Social Responsibility to Key Stakeholders

Abstract

In this paper we argue that socially responsible policies have positive short-term and long-term impact on equity of global brands. We find that corporate social responsibility towards all stakeholders, whether primary (customers, shareholders, employees and suppliers) or secondary (community), have positive effects on brand equity value, where the secondary stakeholders are even more important than primary stakeholders. In addition, policies aimed at satisfying community interests act as a mechanism to reinforce trust that gives further credibility to social responsible polices with other stakeholders. The result is a decrease in conflicts among stakeholders and greater stakeholder willingness to provide intangible resources that enhance brand equity. We provide support of our theoretical contentions using a panel data composed of 57 global brands, originating from 10 countries (USA, Japan, South Korea, France, the UK, Italy, Germany, Finland, Switzerland and the Netherlands) for the period 2002 to 2007. We use detailed information on brand equity obtained from Interbrand and on corporate social responsibility provided by the Sustainalytics Global Profile (SGB) database, as compiled by Sustainalytics.