The Sustainable Competitive Advantage of Corporate Social Responsibility: The Mediating Role of Brand Equity

Abstract

Corporate Social Responsibility (CSR) is more than just a mere
instrument for companies to present themselves as socially responsible. On top
of everything, if executed properly, CSR enhances a firm’s chance of gaining a
competitive edge over the competitors. The purpose of this study is to verify the
relationship between CSR and Sustainable Competitive Advantage (SCA). This
study proposes a mediation model that links CSR to competitive advantage
through Brand Equity. To achieve the study’s objectives, data were collected
through judgmental sampling technique from 267 customers of different banks
of Bangladesh who are well-known for their CSR activities. Ten private banks of
Bangladesh were selected as sources of sample respondents. The collected data
were analyzed by structural equation modeling (SEM) so that all the
relationship among constructs can be examined empirically. The result of this
study represents the reliability and validity of CSR-BE-SCA model. The results
also support the proposed hypotheses. The outcome reflects that CSR activities
pave the way to develop sustainable competitive advantage where brand equity
plays the mediating role between CSR and SCA. The practical implication of
this study about the banks is that, through CSR programs, banks should focus on
improving the brand equity. If the facets of brand equity (brand awareness,
association, perceived quality and loyalty) can be enhanced through CSR then a
bank will be able to capture the maximum outcome of any CSR program. Thus, a
bank will be able to achieve tenable competitive edge over its competitors.