Corporate social reponsibility, corporate reputation, customer satisfaction and firms' market value: an analysis and conclusions from the automobile industry

There has been a lot of discussion about corporate social responsibility (CSR) during these last decades. Neoclassical authors support the idea that CSR is not compatible with the objective of profit maximization, and defenders of CSR argue that, in these times of globalization and network economies, the idea of a company managed just to meet shareholders’ interests does not support itself. However, beyond this discussion, how can CSR affect firms’ market value? If a positive relationship were found between these variables, it could be concluded that the two theories are reconcilable and the objective of profit maximization, perhaps, should satisfy not only shareholders’ interests, but also stakeholders’. This relationship between CSR and firmś Market Value (MV), in accordance with theory, uses to be not direct, but indirect, and mediated through other variables. In this research it is posited that CSR might affect MV through Corporate Reputation (CR) and Customer Satisfaction (CS). Taking into account previous literature, there are besides control variables as industry, corporate abilities, stakeholderś awareness or even the size of the company which can bias results, misleading both academics and managers. As a consequence of this, it is proposed that those CSR initiatives which could work in an industry might not work in others. From this point of view, a new approach is proposed, focusing our research in a single industry: automotive. Automobile Industry has a huge economic, social and environmental impact. In addition, it is a concentrated industry where 14 companies share out 80 per cent of the global market, firms have similar size (or at least they compete globally) and which invest important quantities every year both in R&D and marketing (what it should impact on awareness)..