Index of Paper Presentations for the Parallel Sessions - Academy of ...

HypothesesCSP and Brand Equity: Institutional theory (Scott 1987) and stakeholder theory (Maignan et al. 2005) indicate thatconsumers‘ interaction with companies extend beyond their individual needs to their identification with family,community, and country (Handelman and Arnold 1999). As such, ceteris-paribus, consumers would view brandsassociated with socially responsible firms as more favorable. Further, research indicates that CSR increasesconsumer identification with firms and helps enhance their evaluations and attitudes towards the firms (Brown andDacin 1997; Sen and Bhattacharya 2001), leading to increased brand equity.Therefore, we predict:H1: CSP of firms would be positively related to their brand equity.Brand Equity and Shareholder Value: Higher brand equity allows consumer recognition of products and services inthe crowded market place (Henderson and Cote 1998) and can serve as predictive cues of product performance toconsumers (Erdem and Swait 1998). This can help increase the level and timing of future cash flows of firms.Further, a more complex network of associations presupposing brand equity gives consumers greater confidence intheir attitudes towards brands (Pullig et al. 2006), making them less prone to attitude change (Pham andMuthukrishnan 2002), and attenuating the effect of competitors‘ persuasion attempts (Pechmann and Ratneshwar1991). This can help reduce the variation in the future cash flows of firms. Therefore, we predict:H2a: Brand Equity of firms would be positively related to their stock returns.H2b: Brand Equity of firms would be negatively related to their stock risks.CSP and Shareholder Value: Beyond its effect on consumers, CSP also has the potential to affect other stakeholdersof firms (Varadarajan and Menon 1988). Indeed, CSR initiatives generate ―moral capital‖ which can enhancecommitment among employees, recognition within communities and regulators, trust among partners, and higherattractiveness and dependability for investors (Luo and Bhattacharya 2009). As such, CSP can help enhance the leveland timing of future cash flows of the firms (Luo and Bhattacharya 2006). Further, moral capital generated by CSP