“Effect of CSR activities on customers’ purchase intention: The mediating role of

trust”

Imran Ali
AUTHORS Mohammad Naushad
Hadeel Jaafar Alasmri

Imran Ali, Mohammad Naushad and Hadeel Jaafar Alasmri (2023). Effect of CSR
ARTICLE INFO activities on customers’ purchase intention: The mediating role of trust. Innovative
Marketing , 19(2), 155-169. doi:10.21511/im.19(2).2023.13

DOI http://dx.doi.org/10.21511/im.19(2).2023.13

RELEASED ON Tuesday, 30 May 2023

RECEIVED ON Thursday, 22 December 2022

ACCEPTED ON Sunday, 14 May 2023

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JOURNAL "Innovative Marketing "

ISSN PRINT 1814-2427

ISSN ONLINE 1816-6326

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© The author(s) 2023. This publication is an open access article.

businessperspectives.org
 Innovative Marketing, Volume 19, Issue 2, 2023

Imran Ali (India), Mohammad Naushad (Saudi Arabia),

Hadeel Jaafar Alasmri (Saudi Arabia)

BUSINESS PERSPECTIVES
Effect of CSR activities
LLC “СPС “Business Perspectives”
Hryhorii Skovoroda lane, 10,
on customers’ purchase
Sumy, 40022, Ukraine
www.businessperspectives.org
intention: The mediating
role of trust
Abstract
Corporate social responsibility (CSR) is the belief that businesses must consider ethical,
social, and environmental issues when making decisions. Several studies have found
that CSR improves corporate performance. Moreover, CSR is thought to increase con-
sumer trust and purchase intention. This study investigates the effect of CSR activities
on customers’ purchase intentions and the mediating role of trust. It draws linkages
and establishes that businesses can improve their bottom lines while positively affect-
ing society by acting responsibly.
Received on: 22nd of December, 2022 The present study selected two independent variables (ethical corporate social respon-
Accepted on: 14th of May, 2023 sibility and legal corporate social responsibility) alongside one dependent variable (pur-
Published on: 30th of May, 2023 chase intention) and one intervening variable (trust). The sample comprises two hundred
and thirty respondents from India’s National Capital Region (NCR), Delhi, and nearby
© Imran Ali, Mohammad Naushad, regions. The data were examined using structural equation modeling (SEM). The results
Hadeel Jaafar Alasmri, 2023 showed that CSR activities significantly positively affected customers’ purchase inten-
tion. Furthermore, trust mediated the linkages between CSR activities and customers’
purchase intention. The findings suggest that CSR activities can increase customers’ pur-
Imran Ali, Ph.D., Assistant Professor, chase intention by fostering trust. In other words, when customers trust a firm, they are
Department of Business Management, more likely to intend to purchase its products or services. CSR managers should there-
NOIDA Institute of Engineering and fore focus on creating and maintaining trust with their customers. In addition, findings
Technology, India. suggest that firms should be conscious of their social image. This study offers significant
Mohammad Naushad, Ph.D., Associate insights because they show that any business can be successful and socially responsible.
Professor, College of Business
Administration, Prince Sattam Bin
Abdulaziz University, Saudi Arabia. Keywords corporate social responsibility, trust, purchase intention,
(Corresponding author) ethical CSR activities, legal CSR activities
Hadeel Jaafar Alasmri, Teaching JEL Classification M14, M31, M38
Assistant, College of Business
Administration, Prince Sattam Bin
Abdulaziz University, Saudi Arabia. INTRODUCTION
Corporate social responsibility (CSR) activities have become increas-
ingly important to businesses. It refers to how businesses can posi-
tively influence society through their actions. CSR activities include
environmental sustainability initiatives, charitable donations, com-
munity development, and volunteering programs for sustainable busi-
ness practices (Peloza & Shang, 2011). While CSR activities benefit so-
ciety, they can also positively affect businesses (Peloza & Shang, 2011).
Customers who perceive a business to be engaged in CSR are more
likely to trust the business and feel optimistic about it (Ali et al., 2020;
Green & Peloza, 2014). Moreover, people are often willing to pay more
This is an Open Access article, for products and services from companies that engage in CSR activi-
distributed under the terms of the ties, as they perceive these businesses to be more trustworthy and de-
Creative Commons Attribution 4.0
International license, which permits pendable (Hur et al., 2020). In other words, CSR activities can help
unrestricted re-use, distribution, and businesses to increase sales and boost profitability, maintaining trust.
reproduction in any medium, provided
the original work is properly cited.
Conflict of interest statement: There are many reasons businesses should engage in CSR. Poddar et
Author(s) reported no conflict of interest al. (2019) demonstrate how CSR can significantly contribute to sus-

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Innovative Marketing, Volume 19, Issue 2, 2023

tainable development by addressing social inequalities and eradicating poverty. However, the potential
financial benefits are certainly one of the most persuasive. In contrast, CSR may or may not be a factor
in all customers’ decision-making processes (Green & Peloza, 2014). Customers are more concerned
with their economic well-being than with social progress. Their primary goal is to maximize benefits
at the lowest possible cost. Clients value customized services and benefit more than social development
and equitable growth.

Moreover, they likely desire an affordable product that provides high-quality services that are somewhat
socially responsible (Carrigan & Attalla, 2001). Customers sometimes are willing to accept the socially
irresponsible firm to fulfill their financial motives (Green & Peloza, 2014). However, people are usually
unaware of firms’ CSR activities. The relationship between CSR and customers’ buying behavior does
not portray a linear cause-and-effect relationship; other factors also play a vital role.

It is necessary to confirm whether trust engendered by CSR led to purchase intentions and actual pur-
chases. There are shreds of evidence available in the literature (Zhang & Ahmad, 2021; Ali & Naushad,
2021; Hur et al., 2020; Ali et al., 2020; Sharma et al., 2018) indicating how CSR influences the various
aspects of customers perception and behavior including trust, which helps ultimately to make purchase
intention. Conversely, a limited number of research studies have been undertaken in India to scrutinize
the impact of corporate social responsibility on customer purchase intentions. Therefore, this study
seeks to close that chasm.

1. LITERATURE REVIEW Ethical CSR activities, such as environmental pro-

tection and workplace safety, exceed what the law
Corporate social responsibility (CSR) is a com- mandates. On the other hand, legal CSR activities,
pany’s commitment to conduct business morally such as equal employment opportunity policies,
and promote economic growth while enhancing are mandated by law. Numerous organizations
the lives of its employees, their families, the neigh- have adopted CSR policies to enhance their repu-
borhoods, and the broader community (Carroll, tation and gain a competitive advantage.
1991b). Many businesses adopt this self-regulatory
policy. Initially, for CSR, Milton Friedman’s tra- CSR can help businesses build trust with their
ditional view regarding the responsibility of busi- stakeholders, improve employee morale, and at-
ness was in practice. Friedman (1963) believed tract and retain customers. Additionally, the gov-
that the sole purpose of a business should be to ernment believes it is critical to engage businesses
make money for its shareholders. This perspective in CSR activities that contribute significantly to
changed in the 1970s when CSR became popular social development (Kilcullen & Kooistra, 1999).
(Mohr et al., 2001). Later, society began to demand Business organizations are concerned with CSR
that businesses be profitable but also ethical and activities because they want to place equal empha-
responsible. sis on economic and social development (Kotler &
Lee, 2005). Hence, it is imperative to provide back-
In the last decade of the twentieth century, the ing to the theoretical underpinnings of the topics
more comprehensive classifications of CSR (eco- to formulate the present issue and discern the gap
nomic, legal, ethical, and philanthropic) by in the literature. This study examines the focused
Carroll (1991b), the societal marketing concepts aspects of CSR discussed in the literature. Before
of Kotler et al. (1991), and the avoiding harm and delving into the CSR concept, this study examines
doing good concepts of Petkus and Woodruff other dependent constructs in light of CSR.
(1992) were used to define the CSR of businesses.
Nowadays, it is adopted in various meanings and The foremost and vital construct for the study is
terms. However, the focus of the current study, purchase intention. Purchase intention is “the
specifically in terms of definition, is the twofold decision-making process that precedes an actual
concept of CSR, i.e., ethical CSR and legal CSR. purchase.” It is “the consumer’s desire to purchase

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 Innovative Marketing, Volume 19, Issue 2, 2023

a particular product or service shortly.” In other tinct characteristics, they frequently need clarifi-
words, it is the consumer’s interest in buying a cation. The subfield of business ethics pertains to
product or service (Naushad, 2018; Peña-García et the examination of moral and ethical issues that
al., 2020). Several factors can influence purchase may arise from commercial transactions. Ethical
intention, such as a product’s quality, price, celeb- CSR activities reflect the company’s values and re-
rity endorsement, sales promotion, perceived risks spect the rights of all stakeholders (Carroll, 1991b).
and benefits, brand image, previous purchase ex- This includes ensuring that employees are treated
perience, and the company’s social conscience fairly, customers are given accurate information,
(Faridi & Naushad, 2021; Herjanto et al., 2020; Ali and suppliers are paid on time (Carroll, 1991b;
et al., 2020). A correlation exists between corpo- Carroll & Shabana, 2010).
rate social responsibility (CSR) and the intention
to purchase (Ali et al., 2020). Research has indicat- Ethical CSR also involves reducing the company’s
ed that engaging in corporate social responsibility environmental impact and ensuring its products
(CSR) initiatives can positively affect consumers’ are safe for consumers (Ali et al., 2020; Brunk,
inclination to purchase (Ali et al., 2020). For ex- 2010). By adhering to these principles, companies
ample, when consumers are aware of a company’s can show they are responsible and good corporate
CSR activities, they are more likely to have a pos- citizens (Brunk, 2010). Ethical CSR is about do-
itive attitude toward the company and its prod- ing the right thing and building trust and credi-
ucts, boosting their purchase intention (Ali et al., bility with stakeholders (Carroll & Shabana, 2010;
2020; J. Lee & Y. Lee, 2018). CSR activities can also Mohr et al., 2001). When consumers see a com-
build brand equity and customer loyalty, leading pany behaving ethically, they are more likely to
to higher purchase intention (Faridi & Naushad, trust and continue doing business with it (Abdeen
2021; Wang et al., 2021). CSR is incredibly impact- et al., 2016; Sharma et al., 2018). Ethical CSR ac-
ful when the respondent personally identifies with tivities can significantly affect consumer purchase
the social issue the company is trying to address. intention (Abdeen et al., 2016; Ali et al., 2020).
Customers will gravitate toward an organization Consumers are increasingly interested in support-
if they believe the CSR activities add value to their ing businesses that engage in ethically responsi-
lives. Value generation affects a customer’s pur- ble practices, such as environmental protection,
chase intention and attitude toward an organiza- social justice, and fair labor practices (Turcsanyi
tion (Gallarza & Saura, 2006). CSR initiatives help & Sisaye, 2013). When businesses demonstrate a
businesses improve their reputation, customer sat- commitment to these values, it creates a positive
isfaction, loyalty, and retention. association in the minds of consumers, which can
enhance their purchase intention (Ali et al., 2020;
Customers’ intentions to purchase a product are al- Sharma et al., 2018; Turcsanyi & Sisaye, 2013).
so influenced by economic, legal, and ethical CSR Ethical CSR activities can also create a sense of
activities (J. Lee & Y. Lee, 2015). Companies have community and loyalty among customers, as they
developed a distinct image in customers’ minds feel they support a business that shares their val-
through CSR activities that increase customer ues (Faridi & Naushad, 2021; Goel & Ramanathan,
satisfaction and loyalty (Ali et al., 2020; Faridi & 2014). Ethical CSR activities in today’s competi-
Naushad, 2021). As a result, organizations should tive marketplace can give businesses a significant
invest in CSR activities and work to establish a advantage in attracting and retaining customers
reputation as socially responsible organizations. (Turcsanyi & Sisaye, 2013). Ethical CSR is, there-
fore, essential for any company that wants to build
The following construct for the study is ethical CSR a strong reputation and create long-term relation-
activities. The term “ethical practices” refers to the ships with its stakeholders. Moreover, companies
moral science that governs an organization’s and that want to increase sales should focus on ethical
individual’s behavior (Daft, 2015). Organizations CSR activities (Turcsanyi & Sisaye, 2013).
that behave in a socially acceptable manner are
considered ethical, resulting in a favorable atti- The next construct, an integral part of CSR, is the
tude among customers (Abuznaid, 2009). While legal CSR activities. Legal CSR activities are those
corporate social responsibility and ethics are dis- actions a company takes to be socially responsible

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Innovative Marketing, Volume 19, Issue 2, 2023

and comply with the law. The legal definition of consciousness affects purchase intention (J. Lee
CSR activities may vary from country to country. & Y. Lee, 2015), developing a solid brand image.
However, some general principles can be applied. Economic objectives based on the legal frame-
Legal CSR activities can be broadly defined as work will positively affect customer satisfaction
those actions taken by a company to improve the and loyalty (J. Lee & Y. Lee, 2015; Mulaessa &
lives of employees, customers, or other stakehold- Wang, 2017). Consequently, enterprises that
ers (Carroll, 1991b). This can include providing comply with legal regulations establish a favora-
fair wages and benefits to promote workplace safe- ble perception among their clientele and exert an
ty. It can also involve protecting the environment impact on their buying behavior.
or supporting local communities through chari-
table giving. In the end, legal CSR activities meet After establishing the concepts of the major con-
a company’s legal requirements and help improve structs from the literature, the current study
society (Mohr et al., 2001). looks into their interrelationships and impacts
on each other. Among others, CSR is the prac-
In recent years, there has been a great deal of de- tice of businesses giving back to society. CSR is
bate about the role of legal CSR activities in influ- important because it can build trust between a
encing consumer purchase intention. Abdeen et al. company and its customers. When customers
(2016), Ali et al. (2020), Sharma et al. (2018), and see a business acting ethically and responsibly,
Turcsanyi and Sisaye (2013) argue that legal CSR they are more likely to have positive feelings.
activities are essential in building trust and good- This, in turn, can lead to increased sales and
will with consumers, which can lead to increased loyalty. Numerous studies have shown that CSR
sales. In contrast, Carrigan and Attalla (2001), increases customer trust, promoting sales and
Mohr et al. (2001), Öberseder et al. (2011), and profitability (Abdeen et al., 2016; Martínez & del
Vera-Martínez et al. (2022) observed that legal Bosque, 2013; Oney et al., 2017; Yu et al., 2021).
CSR activities are often ineffective and may even Trust is critical in determining a customer’s pur-
backfire, making customers doubt a company’s in- chase intention (Oney et al., 2017). Businesses
tentions or feel like they have been tricked. that have earned their customers’ trust can eas-
ily weather financial crises and economic reces-
However, Ng (2022) and Vu et al. (2022) provide sions because their customers are loyal and do
fascinating insights into the relationship be- not switch to competitors (Mulaessa & Wang,
tween legal CSR activities and purchase inten- 2017). In the industry, trusted organizations are
tion. These studies found that legal CSR activi- more competitive and financially stable.
ties were indeed associated with increased pur-
chase intention, but only when those activities By disclosing all material information, businesses
were perceived as genuine. If consumers felt that must earn customers’ complete trust in their prod-
a company was engaging in legal CSR activities ucts, services, and processes. Trust is more likely
to gain favor or avoid negative publicity, they to develop when one of the parties to the transac-
were less likely to buy from it (Ng, 2022; Vu et tion is aware of the second party’s dependability
al., 2022; Zhuang et al., 2022). Voluntary com- and moral fabric. Trust also depends on the cus-
pliance with all applicable rules and regulations tomers’ beliefs, feelings, and expectations. CSR ac-
enhances the organization’s image in custom- tivities are sufficiently practical to foster the devel-
ers’ minds (Carroll, 1991b). Customers are in- opment of a positive brand image.
terested in purchasing products from business-
es that adhere to all applicable laws and conduct Numerous research studies confirm that CSR ac-
business following those laws (Ali et al., 2020). tivities increase trust, which results in a positive
Customers take pride in their associations with brand image (Choi & La, 2013). When businesses
socially responsible businesses (Servera-Francés focus on creating an atmosphere of trust, they are
& Arteaga-Moreno, 2015). Legal CSR activities more likely to see increased customer purchase in-
demonstrate an organization’s commitment tention. A growing body of research suggests that
to adhering to existing rules and regulations. customer trust significantly predicts purchase in-
Numerous studies have confirmed that legal tention. For example, Bruhn et al. (2012) found

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 Innovative Marketing, Volume 19, Issue 2, 2023

that customer trust positively and significantly H3: There is a significant association between
affected purchase intention in online banking. Li ethical CSR activities and trust.
et al. (2007) found that customer trust was a sig-
nificant predictor of purchase intention in e-com- H4: There is a significant association between le-
merce. These studies suggest that increasing cus- gal CSR activities and trust.
tomer trust could lead to improved purchase in-
tention. However, more research is needed to un- H5: There is a significant association between
derstand the specific mechanisms through which trust and purchase intention.
customer trust influences purchase intention.
H6: Trust has a mediating impact on the rela-
tionship between ethical CSR activities and
2. AIMS AND HYPOTHESES purchase intention.

The primary aim of this study is to examine the H7: Trust has a mediating impact on the rela-
effect of CSR activities on customers’ purchase in- tionship between legal CSR activities and
tentions and the mediating role of trust. Moreover, purchase intention.
it seeks to understand how corporate social re-
sponsibility influences customers’ purchasing de- Consequently, this study aims to test the above hy-
cisions. The paper highlights the importance of potheses and fill the research gap. Very few studies
CSR activities in directly affecting customers and examine the effects of CSR activities on customers’
their buying decisions. This study’s distinctive fea- purchase intentions with trust as a mediating fac-
ture is that it measures the impact of CSR activi- tor, which is one of the primary foci of this study.
ties on purchase intention. It allows businesses to Furthermore, there is a dearth of research about
design marketing strategies with CSR, as custom- the current topic within the Indian context. Figure
ers prefer to purchase products from socially con- 1 depicts the hypothesized model of the study.
scious businesses.

As a result of the preceding discussion, it is hy- 3. METHODOLOGY

pothesized that:
Companies are gradually shifting their focus on
H1: Ethical CSR activities positively and signifi- CSR practices to attract customers to the organ-
cantly affect customer purchase intention. ization and develop a positive attitude and trust
among their customers. Numerous studies have
H2: Legal CSR activities positively and signifi- investigated the variables that influence the pur-
cantly affect customer purchase intention. chase intention of customers. This study investi-
Source: Authors’ elaboration.

H1+

Ethical CSR H3+

Activities

H6+ H6+
H5+ Purchase
Trust
Intention
H7+ H7+

Legal CSR
Activities H4+

H2+
Figure 1. Proposed research model

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Innovative Marketing, Volume 19, Issue 2, 2023

gates how CSR practices influence the purchase in- and Wang (2017). At the same time, the trust and
tention of customers. Data for the present study were purchase intention constructs were adopted from
gathered in Delhi and the National Capital Region Mulaessa and Wang (2017).
(NCR). Customers in the nation’s capital are expect-
ed to reasonably understand CSR initiatives. This The survey method was used for data collection since
makes the population more suitable for the data col- it can be administered remotely via online, mobile
lection. Feedback from these respondents is based devices, email, and social media platforms. Many
on personal experience and observations. Delhi and questionnaires were sent to the targeted respondents
National Capital Region’s total population is approx- because a large sample size helps to fetch meaning-
imately 20 million, of which 1.5 million people are ful insights about the population and draw practical
above 18 years of age. All the respondents are above conclusions. Therefore, snowball and convenience
18. The collection of data was conducted through sampling was used in this study to recruit respond-
the utilization of a structured questionnaire that ents. Data were collected between July 2022 and
was bifurcated into two distinct sections. The initial September 2022. Initially, a large number of ques-
section of the survey comprises inquiries about the tionnaires were sent via online and offline channels
participants’ demographic attributes, encompassing to be filled out by the targeted respondents. However,
factors such as age, gender, education, and income. some of the questionnaires were not filled out cor-
rectly. Thus, these questionnaires were excluded
The subsequent section of the survey comprises data from the current study. Some responses were exclud-
on the research constructs: ethical and legal CSR ac- ed during the data cleaning process (like missing re-
tivities, trust, and purchase intention. There are four sponses or outliers). Finally, there were only 230 re-
constructs; two are independent, one is dependent, sponses left for the final analysis. The data analysis
and one is a mediating variable. There were overall process involved suitable statistical techniques such
20 items in the questionnaire. as correlation, regression, exploratory factor analy-
sis, and confirmatory factor analysis. The paper em-
There are exhaustive CSR classifications available in ployed structural equation modeling (SEM) to estab-
the literature. For example, Caroll’s (1991) econom- lish the interrelationships among the variables.
ic, legal, ethical, and philanthropic concepts of CSR,
Kotler’s (1991) socio-marketing concepts, and Petkus Structural equation modeling allows testing for cau-
and Woodruff’s (1992) avoiding harm and doing sality and estimating the strength of relationships be-
good are the most prevalent CSR concepts among tween the variables. It is well suited for studying the
the scientific community and practitioners. The causality between interrelated or discriminant con-
current study, however, focuses on the two primary structs. SEM facilitates a more nuanced understand-
components of CSR, namely ethical CSR activities ing of the relationships between these variables. In
and legal CSR activities. This choice was made for the current study, these variables are CSR activities,
two primary reasons. From the company’s perspec- trust, and purchase intention. Using SEM, one can
tive, ethical CSR is essential for brand equity and get a more nuanced understanding of these complex
competitive advantage. In addition, the study is con- relationships. By understanding these relationships
ducted in India. The Companies Act was amended better, one can develop more effective interventions
in April 2014 to make CSR activities mandatory in to increase customer trust and reduce perceived risks.
India. The New Companies Act of 2013 defines a new This could lead to increased purchase intention and
company as one with a turnover of Rs. 500 crores or greater customer satisfaction.
more, a total turnover of Rs. 1000 crore or more, or a
net profit of Rs. The data analysis for the study was done using IBM-
SPSS, IBM-AMOS, and Microsoft Excel software.
Furthermore, the Companies Act of 2013 mandated Moreover, Microsoft Excel and IBM-SPSS were uti-
businesses augment their outlays toward rural edu- lized to analyze and understand the demographic
cation, healthcare, training, women’s empowerment, profiles of respondents. In addition, structural equa-
and rural development. The constructs of CSR ac- tion modeling was utilized to validate both the meas-
tivities were adapted from Maignan (2001) and lat- urement and structural models. There are two steps
er tested by J. Lee and Y. Lee (2015) and Mulaessa to structural equation modeling. The first step of

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 Innovative Marketing, Volume 19, Issue 2, 2023

structural equation modeling verifies the measure- The subsequent data analysis phase involves explora-
ment model, whereas the second verifies the struc- tory factor analysis (EFA), confirmatory factor anal-
tural model. A structural model validates the nature ysis (CFA), structural model assessment, and media-
and strength of the relationship between independ- tion analysis. The initial step of structural equation
ent and dependent variables. IBM-AMOS was used modeling is to explore the data for the best fit of con-
to conduct a bootstrapping-based examination of structs. In this regard, exploratory factor analysis
mediation analysis. (EFA) was performed. Exploratory analysis, a mul-
tivariate method for reducing data, helps to identi-
fy underlying variables. It permits the investigation
4. RESULTS of the most pertinent variables for the current study.
Table 1. Demographics However, before delving into the EFA and other pro-
cedures, the primary check and balances were estab-
Particulars Frequency Percentage lished, like data were validated by removing missing
Gender data and outliers.
Female 110 47.80
Male 120 52.20
Table 2 exhibits the value of the Kaiser-Meyer-Olkin
Total 230 100.00
(KMO) measure and Bartlett’s test. KMO value indi-
Age
18-25 24 10.40
cates the adequacy of data. The KMO value for the
25-30 121 52.60 present study is 0.816, which is good and acceptable.
30-35 53 23.00 Table 2 also exhibits the value of Bartlett’s test of
35 and above 32 13.90 sphericity, which is significant at the level of 0.000.
Total 230 100.00 The significant value of Bartlett’s test of sphericity
Qualification indicates that data are sufficient for further analysis.
Undergraduate 2 00.90
Graduate 112 48.70 Table 2. KMO and Bartlett’s test
Postgraduate 116 50.40
Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.816
Total 230 100.00
Approx. Chi-Square 1190.716
Monthly Income (INR)
Bartlett’s Test of Sphericity df 91
0-25000 89 38.70
Sig. .000
25000-50000 72 31.30
50000-75000 51 22.20
75000 and above 18 The final EFA values (i.e., factor loadings) are report-
7.80
Total 230 100.00
ed in Table 3. Initially, the questionnaire adminis-
tered had twenty items under the four constructs
This study’s data analysis begins with an SPSS- adopted for the study. Then, based on the explora-
based analysis of respondent demographics. Table tory factor analysis, six items were dropped due to
1 shows the demographic profile of the respond- poor factor loadings, where factor loadings were less-
ents. 52.2% of males and 47.8% of females were er than 0.50 (n < 0.50) or the factor loaded heavily on
among the respondents. Furthermore, 10.4% of other constructs. Finally, only fourteen items were
respondents were in the age group of 18-25, and left for the study’s confirmatory and final analyses.
52.6% were in the age group of 25-30. While 23%
of respondents were in the age group of 30-35, and Measuring the quality of the measurement instru-
13.9% were in the age group of 35 and above. As ment/scale (research questionnaire) used for the
far as the respondents’ educational qualifications study is essential. The reliability and validity checks
were concerned, most respondents were graduates are established. Reliability checks whether a scale
and postgraduates. More importantly, only less can measure what it is intended to measure. The
than 1% of respondents were undergraduates. The scale’s reliability indicates that it can produce con-
fourth and last variable was the monthly income sistent results, and internal consistency checks re-
of the respondents. The majority of respondents liability. Internal consistency is measured through
earned less than INR 50,000 monthly income. Cronbach’s alpha. Cronbach’s alpha value of greater
However, a quarter of the respondents were in the than 0.70 is considered good to check the reliability
high-income group. of a scale. Cronbach’s alpha values for all four con-

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Innovative Marketing, Volume 19, Issue 2, 2023

structs, namely legal CSR activities, ethical CSR ac- tiveness of each construct (Hair et al., 2016; Hulland,
tivities, purchase intention, and trust, taken for the 1999). The criteria developed by Fornell and Larcker
study are 0.759, 0.845, 0.723, and 0.552, respective- (1981) to determine the constructs’ discriminant va-
ly. The Cronbach’s alpha value for all the constructs lidity are considered one of the most trusted in the
except one is greater than the threshold value, i.e., scientific literature. As per Fornell and Larcker (1981),
0.70 (α > 0.70). However, only for trust constructs the the square root of average variance extracted (AVE)
threshold limit is lesser than the recommended val- is compared to the correlation between latent varia-
ue, which can be tested strictly on other parameters. bles. As a general rule of thumb, the square root val-
Therefore, all the study constructs face no internal ues of AVE must exceed the correlation value. Table
consistency issue. 4 demonstrates that all four constructs’ AVE square
root values are more significant than their correla-
On the other hand, the constructs’ validity is the tion values. Thus, it confirms that all the study con-
ability of a scale to produce an accurate result. In or- structs have discriminant validity.
der to measure the validity of a scale, average vari-
Table 4. Discriminant validity
ance extracted (AVE) is used. An AVE value of great- (Fornell-Larcker criterion)
er than 0.5 is considered good and acceptable. Table 3
exhibits that the AVE values of all four constructs are S.N. Constructs 1 2 3 4
0.59, 0.53, 0.58, and 0.56, respectively. The AVE val- 1 Legal CSR 0.77
ues of all four constructs are more significant than 2 Ethical CSR 0.75 0.73
3 Purchase Intention 0.36 0.36 0.76
the targeted value of 0.50 (AVE > 0.50), which indi-
4 Trust 0.45 0.45 0.37 0.75
cates that constructs have no variance issue. The fol-
lowing parameter is the value of composite reliability
(CR). Table 3 also exhibits each construct’s compos- After establishing the constructs’ reliability and
ite reliability value (CR). The value of C.R. for all the validity measurement, the next step in structural
constructs is fairly above the threshold value of 0.70 equation modeling is to validate the overall meas-
(CR > 0.70), where CR value for legal CSR activities, urement model. The measurement model checks
ethical CSR activities, purchase intention, and trust the relationship between observed and latent var-
are 0.80, 0.84, 0.81, and 0.70. Thus, all four constructs iables. However, the measurement indices to vali-
taken for the study have no validity and reliability is- date the measurement model varies in the litera-
sues and can be considered for further analysis. ture. Nevertheless, the most common parameters/
indices are CMIN/df, Comparative Fit Index (CFI),
Table 3. Construct reliability and validity
Goodness of Fit Index (GFI), Adjusted Goodness
Cronbach’s of Fit Index (AGFI), Parsimonious Normal Fit
Variables Indicators Loadings AVE CR
alpha (PNFI), and Parsimonious Normal Fit (PNFI). The
Leg1 0.809 confirmatory factor analysis (CFA) was carried
Legal CSR Leg2 0.819 0.759 0.59 0.80
out. The results of CFA are depicted in Figure 2,
Leg3 0.659
Ethic1 0.546
and the significant indices are reported in Table 5.
Ethic2 0.664 Table 5. Fit indices of confirmatory factor
Ethical CSR Ethic3 0.895 0.845 0.53 0.84 analysis
Ethic5 0.812
Ethic6 0.674 Recommended Observed
Fit Indices Results
PI2 0.794 Values Values
Purchase
PI3 0.774 0.723 0.58 0.81 CMIN/df Less than 5 1.755 Acceptable
Intention
PI4 0.720 CFI 0.80 - 0.90 0.950 Acceptable
Trust2 0.496 GFI ≥ 0.90 0.916 Acceptable
Trust Trust3 0.737 0.552 0.56 0.70 AGFA ≥ 0.80 0.883 Acceptable
Trust4 0.742 PDF > 0.50 0.729 Acceptable
RMS Less than 0.08 0.057 Acceptable
In order to determine how distinct the constructs
Note: CFI = Comparative Fit Index, GFI = Goodness of
are, discriminant validity is frequently employed Fit Index, AGFI = Adjusted Goodness of Fit Index, PNFI =
in scientific research. Measurement of discriminant Parsimonious Normal Fit, RMSEA = Root Mean Square Error
validity is essential because it highlights the distinc- of Approximation.

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 Innovative Marketing, Volume 19, Issue 2, 2023

0.50 1
e1 Ethic1
1.00
1
0.48 e2 Ethic2 1.06 0.35
1 1.29
0.29 e3 Ethic3 Eth
1.40
1
0.23 e4 Ethic4 0.98
1
0.51 e5 Ethic5 0.24

0.48 e6 1 Leg1 1.00 0.47 0.16

0.08 1 1.41
e7 Leg2 Leg
0.70
1
0.54 e8 Leg3 0.18
1 0.21
0.51 e9 PI2 1.00 0.37
1 0.93 0.18
0.42 e10 PI3 PI
1.18
1 0.49
0.43 e11 PI4
0.19
1
0.63 e12 Trust2 1.00 0.28
1 0.97
0.59 e13 Trust3 Trust
0.79
e14 1 Trust4
0.52

Figure 2. Model fit

Structural equation modeling (SEM) allows cau- icant relationship between ethical CSR activities
sality testing and estimating the relationship and trust because the C.R. value is 4.08 ≥ 1.96, and
strength between variables. It is well suited for the P-value is 0.00 < 0.05. Also, there is a signifi-
studying the causality between interrelated or cant relationship between legal CSR activities and
discriminant constructs. SEM is a helpful tool for trust because the C.R. value is 3.23 ≥ 1.96, and the
small sample sizes in complex relationships of two P value is 0.00 < 0.05. However, there is a signifi-
or more dependent variables (Sarstedt et al., 2019; cant relationship between trust and purchase in-
Shiau & Chau, 2016). The results of the path coef- tention because the C.R. value is 2.69 ≥ 1.96, and
ficients of the SEM model and hypothesis are re- the P value is .000 < 0.01.
ported in Table 6.
Mediation analysis examines how much a medi-
Table 6. Hypotheses conclusions
ating factor affects the relationship between de-
Path Coefficients Estimates S.E. C.R. P Status pendent and independent variables. A minimum
Ethical CSR → PI 0.10 0.11 0.92 0.36 Rejected of three variables must be identified as the de-
Legal CSR → PI 0.22 0.09 2.59 0.01 Accepted pendent variable, the independent variable, and
Ethical CSR → Trust 0.40 0.10 4.08 0.00 Accepted the mediating variable in order to conduct a medi-
Legal CSR → Trust 0.25 0.08 3.23 0.00 Accepted
ation analysis. As in this study, purchase intention
Trust → PI 0.49 0.18 2.69 0.01 Accepted
is the dependent variable, ethical and legal CSR
Note: S.E. = Standard Error of the estimates, C.R. = Critical activities are independent, and trust is the medi-
Ratio.
ating variable. Table 7 demonstrates a significant
The results reported in Table 6 show no significant indirect relationship between legal CSR activities
relationship between ethical CSR activities and and purchase intention via trust since the low-
purchase intention because the critical ratio (C.R.) er bound value is 0.30, the upper bound value is
value is 0.92 ≤ 1.96, and the P value is 0.36 > 0.05. 0.408, and there is no zero in-between. Since both
Furthermore, there is a significant relationship direct and indirect relationships are significant,
between legal CSR activities and purchase inten- trust partially mediates legal CSR activities and
tion because the C.R. value is 2.59 ≥ 1.96, and the purchase intention. In addition, there is a signif-
P-value is 0.01 < 0.05. Moreover, there is a signif- icant indirect relationship between ethical CSR

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Innovative Marketing, Volume 19, Issue 2, 2023

1
0.52 e1 Ethic1
1.00
1 0.22
0.49 e2 Ethic2 1.08 0.33
1 e15
1.36
0.26 e3 Ethic3 Eth
1.43 1 1
1 0.10 1.19 PI4 e11 0.42
0.24 e4 Ethic4 1.01
0.93 1
1 PI PI3 e10 0.43
0.51 e5 Ethic5 1.00
0.40 1
0.22 PI2 e9 0.51
1
0.48 e6 Leg1 1.00
0.40 0.49
1 1.41
0.08 e7 Leg2 Leg
1 0.70
0.54 e8 Leg3 0.25
1
Trust e16

1.00 0.97 0.78

Trust 21 ATT2 ATT4

1 1 1

e12 e13 e14

1.63 0.59 0.52

Figure 3. Structural model

Table 7. Mediation analysis
Confidence Interval
Relationship Direct Effect Indirect Effect P Value Conclusions
LB UB
0.25
Legal → Trust → PI 0.125 0.30 0.408 0.014 Partial Mediation
(0.000)
0.40
Ethical → Trust → PI 0.198 0.07 0.623 0.003 Full Mediation
(0.000)

Note: LB = Lower Bound, UB = Upper Bound.

activities and purchase intention via trust, as the CSR, and purchase intention. Customer trust has
lower bound value is.079 and the upper bound val- always been an essential factor in influencing pur-
ue is .623, and there is no zero in-between. Due chase intention. High customer trust levels may lead
to the insignificance of the direct relationship and to lower perceived risks and higher purchase inten-
the significance of the indirect relationship, there tion. In this regard, CSR is considered one of the crit-
is a full mediation between ethical CSR activities ical forces in building customer trust. This is because
and purchase intention through trust (Figure 3). customers who perceive a business to be engaged in
CSR are more likely to trust the business and feel
positive toward it (Green & Peloza, 2014). Also, cus-
5. DISCUSSION tomers are often willing to pay more for products
and services from companies that do CSR (Hur et
This study investigates the effect of CSR activities on al., 2020). This is because they see these businesses as
customers’ purchase intentions and the mediating more trustworthy and reliable. Therefore, to inves-
role of trust. Moreover, the study endeavored to es- tigate this nexus, the study is set up with seven hy-
timate whether CSR helps to build trust, which helps potheses to understand the research problem com-
in framing the intention that later converts into an prehensively. Out of a total of seven hypotheses, only
actual purchase. In other words, the study aims to one was rejected. However, the rest of the hypotheses
portray the relationships between customer trust, were significant, so they were accepted.

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 Innovative Marketing, Volume 19, Issue 2, 2023

The first finding highlights that ethical CSR ac- aligns with the earlier findings, which viewed
tivities and customers’ purchase intentions do not trust as an essential factor that affects the cus-
have significant relationships. The results resemble tomers’ purchase intention significantly (Oney
earlier findings (Carrigan & Attalla, 2001; Mohr et et al., 2017). Firms enjoying customers’ trust
al., 2001; Öberseder et al., 2011; Vera-Martínez et can earn a profit and command a high market
al., 2022), which did not cite any significant con- share. Trusted organizations are more compet-
nection between ethical CSR activities and pur- itive, financially sound, and socially responsive.
chase intention. This may be for some probable rea- These organizations can attract more customers,
sons, like customers being unaware of the ethical and their customers are less likely to switch to
underpinnings of the firms. Another reason could competitors due to the high trust. Therefore, the
be that customers generally emphasize purchasing study’s findings aligned with the earlier studies,
economically viable products more than ethically establishing a link between trust and a custom-
sound expensive products. Specifically, this trend is er’s intention to buy.
more common among middle-income, underdevel-
oped, and economically poor markets. In contrast, The study offers several implications for firms and
ethical CSR activities determine an organization’s individuals. First, customers perceive CSR activ-
behavior, and customers choose firms that imple- ities as necessary. They prefer to purchase prod-
ment ethically correct and socially acceptable busi- ucts from firms that are sound in following the
ness practices (Carroll, 1991a; Dimitriades, 2007; legal CSR requirement rather than merely social-
Goel & Ramanathan, 2014). ly responsible. Firms should invest more in CSR
activities that create a strong brand image among
The study’s second finding indicates that legal their customers. Furthermore, customers need to
CSR activities and purchase intention have a pos- learn more about CSR activities and their impor-
itive and significant relationship. The result is the tance for sustainable and inclusive growth. Firms
same as confirmed by Abdeen et al. (2016), Ali et should develop robust communication strategies
al. (2020), J. Lee and Y. Lee (2015), Sharma et al. to ensure proper communication between organ-
(2018), Turcsanyi and Sisaye (2013), and Zhang and izations and customers. Customers must be clear
Ahmad (2021). Therefore, customers want to do about the business and social objectives of CSR
business with organizations that are transparent in activities. CSR activities help firms to develop
their business practices and compliant with all leg- society and ensure equitable growth for every-
islation; they feel motivated to work with a socially one. Organizations spend a lot on advertising to
responsible company that follows all laws and rules increase sales and build a strong brand image
(Servera-Francés & Arteaga-Moreno, 2015). among customers.

The subsequent findings are about how trust On the other hand, CSR spending builds a strong
helps form an intention. The study suggests brand and a developed society. CSR activities al-
that trust affects the customers’ purchase in- so help businesses gain customers’ trust and make
tention. These results align with Abdeen et al. them happy with the company. Therefore, trust
(2016), Martínez and del Bosque (2013), Oney mediates a relationship between firms’ CSR activi-
et al. (2017), and Yu et al. (2021). Moreover, it ties and customers’ purchase intentions.

CONCLUSION
The purpose of the current study was to confirm the links between corporate social responsibility (CSR)
activities, specifically legal and ethical activities, and consumers’ purchase intentions. Moreover, it
sought to understand the mediation relationship of trust between CSR activities and purchase inten-
tion. Therefore, the study was devised with four variables. Out of four variables, two were independent
(ethical CSR and legal CSR), one was dependent (purchase intention), and one was a mediating variable
(trust). Seven hypotheses were developed to better understand the relationship between the paths de-
rived from these variables. Structural equation modeling was used to test these hypotheses.

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Innovative Marketing, Volume 19, Issue 2, 2023

The study results indicate that ethical CSR activities and customers’ purchase intentions do not have a
significant relationship. However, legal CSR activities and purchase intention have a positive and signif-
icant relationship. Furthermore, trust was discovered to be a mediator between ethical (partially) and
legal (fully) CSR activities and consumer purchase intention. The results imply that customers prefer to
purchase products from firms that are sound in following the legal CSR requirement rather than merely
socially responsible.

CSR activities also help businesses gain customers’ trust and make them happy with the company.
Therefore, business organizations must take CSR activities seriously because they help build customer
trust, which later translates into intention and, at last, an actual purchase. Firms enjoying customers’
trust can earn a profit and command a high market share.

As with any other research, the limitations of this study are time, resources, and data availability. The
study used a non-random sample of National Capital Region (NCR) customers. This indicates that the
data are representative only of a specific region. Therefore, the findings of this study cannot be general-
ized and cannot be applied across India. Moreover, the sample size for the study is too narrow. The final
data for analysis were only 230, insufficient to draw any general implications. This sample size was due
to the unwillingness of respondents to fill out the questionnaire. Some of the questionnaires were elim-
inated due to incomplete information. Moreover, many responses were excluded in the data cleaning
process (like outliers or missing data).

This study recommends a few areas for future research. Future researchers can investigate the impact
of CSR activities on the firm’s financial performance, customer retention, and customer satisfaction. In
future research, there can be more independent variables, and any other factor can be used as a medi-
ating variable.

AUTHOR CONTRIBUTIONS
Conceptualization: Mohammad Naushad, Hadeel Jaafar Alasmri.
Data curation: Imran Ali, Hadeel Jaafar Alasmri.
Formal analysis: Mohammad Naushad.
Funding acquisition: Mohammad Naushad.
Investigation: Imran Ali.
Methodology: Imran Ali.
Project administration: Mohammad Naushad.
Resources: Mohammad Naushad.
Software: Imran Ali.
Supervision: Mohammad Naushad.
Validation: Mohammad Naushad.
Visualization: Mohammad Naushad, Hadeel Jaafar Alasmri.
Writing – original draft: Imran Ali.
Writing – review & editing: Mohammad Naushad, Hadeel Jaafar Alasmri.

ACKNOWLEDGMENT
This study is supported via funding from Prince Sattam bin Abdulaziz University project number
(PSAU/2023/R/1444).

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 Innovative Marketing, Volume 19, Issue 2, 2023

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