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The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of Reputation in Cooperative Banks Versus Commercial Banks in the Basque Country

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Abstract

The marketplace has seen significant growth in the demand for ‘ethical’ behavior, and banks are seeking to leverage customers’ perception in order to build a sustainable competitive advantage. In consequence, the concepts of corporate social responsibility and corporate reputation are of vital concern for academics and managers in terms of their potential impact on customers. This study seeks to contribute to the literature by examining the mediating role of corporate reputation on the relationship between perceived corporate social responsibility (conceptualized as a formative second-order formative construct) and customer loyalty. The study also takes into consideration the role played by bank type in the mediation effect. To achieve this aim, a study was performed comprising 572 personal surveys in the Basque Country. The results showed that corporate reputation partially mediated the relation between corporate social responsibility and customer loyalty. On the other hand, bank type is shown not to moderate the mediation effect. The results have important implications for practitioners wishing to manage their relations with customers.

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Notes

  1. Welch–Satterthwaite test.

  2. Running MICOM in SMARTPLS usually automatically establishes configural invariance. The statistical output does not apply to this step and is not shown.

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Author information

Authors and Affiliations

  1. Faculty of Business Studies, Mondragon Unibertsitatea, Oñati, Spain

    Izaskun Agirre Aramburu

  2. Mondragon Innovation and Knowledge (MIK), Oñati, Spain

    Izaskun Agirre Aramburu

  3. Faculty of Engineering, Mondragon Unibertsitatea, Arrasate, Spain

    Irune Gómez Pescador

Authors
  1. Izaskun Agirre Aramburu
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  2. Irune Gómez Pescador
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Correspondence to Izaskun Agirre Aramburu.

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Conflict of interest

The authors declare no potential conflict of interest with respect to the research, authorship and/or publication of this article.

Ethical Approval

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards.

Informed Consent

Informed consent was obtained from all individual participants included in the study.

Appendices

Appendix 1: First-order measurement model validity and reliability

Factor

Item

Factor loadings

CR

α

AVE

Social dimension

With regard to society, I think that the financial institution I habitually use does…

    
 

DS1: Try to sponsor socio-educational activities

Removed

 

DS3: Try to sponsor public health activities

Removed

 

DS6: Try to sponsor cultural activities

Removed

 

DS2: Try to treat its employees fairly

0.807***

0.934

0.914

0.705

 

DS4: Try to have an ethical code of conduct and respect it

0.888***

 

DS5: Try to make sure that it respects human rights

0.868***

 

DS7: Try to make economic donations to social causes

0.752***

 

DS8: Try to improve the quality of life of the local communities in which it operates

0.850***

 

DS9: Try to have a non-discriminatory recruitment policy

0.854***

Environmental dimension

With regard to the environment, I think that the financial institution I habitually use does….

    
 

DM1: Try to sponsor activities that favor the environment

0.858***

0.960

0.951

0.775

 

DM2: Try to earmark resources for providing an environmentally compatible service

0.878***

 

DM3: Try to give an account of its environmental actions on a regular basis

0.869***

 

DM4: Try to carry out activities to reduce pollution

0.908***

 

DM5: Try to protect the environment

0.923***

 

DM6: Try to recycle its waste properly

0.819***

 

DM7: Try to make rational use of its natural resources

0.901***

Economic dimension

With regard to business strategy, I think that the financial institution I habitually use does….

    
 

DE1: Try to control production costs

Removed

 

DE2: Try to obtain the greatest possible economic profits to ensure its continuity

Removed

 

DE3: Try to encourage customer loyalty to ensure its long-term economic success

0.768***

0.872

0.849

0.537

 

DE4: Try to improve the quality of the services it offers on a constant basis

0.838***

 

DE5: Try to ensure long-term economic success

0.599***

 

DE6: Try to have a competitive pricing policy

0.833***

 

DE7: Try to improve its economic performance

0.661***

 

DE8: Try to do everything possible to be more productive

0.661***

Corporate reputation

Based on my experience, the financial institution I habitually use really,…

    
 

REPU1: is an institution I trust

Removed

 

REPU4: is an institution that transmits good sensations

Removed

 

REPU2: is an institution I admire

0.948***

0.950

0.896

0.905

 

REPU3: is an institution I respect

0.954***

Recommendation intention

Based on my experience of the financial institution I habitually use, I think I really

    
 

INTR1: could say positive things about this bank/savings bank

Removed

 

INTR2: would recommend this bank to anyone asking me for advice

0.974***

0.974

0.946

0.949

 

INTR3: would encourage friends and relatives to acquire a product or service from this bank /savings bank

0.974***

  1. *** p < 0.001

Appendix 2: The questionnaire

figure a

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Aramburu, I.A., Pescador, I.G. The Effects of Corporate Social Responsibility on Customer Loyalty: The Mediating Effect of Reputation in Cooperative Banks Versus Commercial Banks in the Basque Country. J Bus Ethics 154, 701–719 (2019). https://doi.org/10.1007/s10551-017-3438-1

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